Marketing in a Recession with Ignition CBS
I’ve written about Ignition CBS’ seminar on digital marketing. Managing director Andy Chemney followed on with another seminar looking at how you market during a recession.
The Good News about Recession
1. Companies that make promises they can’t keep go under, removing competition and allowing the companies that can keep promises the opportunity to grow.
2. Recession removes a great deals of sales organisations that masquerade as marketing organisations
3. Lazy marketers give up and move on
4. Companies that focus on profit before customers are removed from the mix
Andy made some really interesting observations about how this recession is different from the last. Although the same thing has basically happened (and we are basically making the same mistakes over and over again), Andy stated that normal service will not be resumed.
The reasoning behind this is that old patterns and business models are fading, replaced by new emerging patterns as the old competitive advantages are getting weaker. The growth of a democratised web, the emergence of virtual/ mobile office space and new technological innovations such as 3D printing are revolutionising economies and the way people do business.
Levers for Business
It isn’t easy to adjust to these new conditions and the process of change isn’t necessarily quick. The primary goal of any business in this environment is to survive. The second goal is to try and take advantage of the crisis/ opportunity that exists in front of every business.
Andy pointed out that the last 10 years has featured a focus on price as the only lever for gaining business. He summarised the reasons why this is not an advisable strategy for a model to do business:
~ Price is not a detectable measure of quality
~ A low price positions a perception of low value and quality in customer’s minds
~ Price destroys differentiation and creates price wars affecting margins and stunting growth
~ Setting a low price is a self fulfilling prophecy
A very good point that was made to sum up the affect of positioning a business on price is to ask yourself, “If you had to increase your prices by 100% what would you have to do to survive?”
Functions of a business
“Price is what you pay, value is what you get” ~ Warren Buffett
Andy let the group answer this question; the natural (and arguably the only) response is to improve the service you provide. Andy expanded on this by stating that business has only 2 functions:
A business can be broken down into a marketing or sales driven business. A marketing business focuses on the buyer, forming a customer satisfying process rather than a goods producing business. For a marketing driven business the product or service becomes a consequence of marketing. A sales business focuses on the seller, exchanging cash for products or services. For a sales driven business marketing is viewed as as a consequence of a product/ service.
If you can find or add the value you bring to your customer you can:
~ Make it easy to choose other than on price
~ Treat your customers as individuals with needs to be met
~ Provide a strong reason to come back
The better you can do at adding value, the higher the price you can charge.
Marketing in a Recession Priorities
“Quick Hits” – these provide immediate results. Generally these will be your current clients or ‘hot prospects’ in your pipeline.
“Mid Terms” – these will happen in the next 3 – 6 months. These will be created through direct marketing, emails, forums, seminars, exhibitions and networking
“Long Terms” – these will happen in 12 months. These are created through PR and advertising campaigns that generally have to last at least 12 months to have an effect.
There is plenty more detail in the seminars and I would heartily recommend going. This is Andy Chemney’s specialist area and he delivers the information with passion and knowledge.