Monday, September 29, 2008

Being smart in a recession

It’s tough to write anything meaningful or entertaining after such a rough day for the US economy but sometimes daily swings at Wall Street do not reflect the reality. At least by now no one can deny that we are in recession, despite the fact that this not yet official for the statistician in the department of commerce. Give them another 10 or 12 months and they will confirm it. 

There have been quite a few articles from AdAge to the WSJ about the implications for marketers, mostly focused on the same two elements:

  • Keep spending, since brands who continue to spend can gain market share from weaker competitors
  • Include a strong value message in your communication, since consumers are much more price sensitive than before

I think most of these articles and discussions are missing a few critical insights that should drive marketing in a recession:

  •  Recession varies significantly by geography and by consumer segment. Marketers should use the recession to accelerate their insights about these differences and build more targeted and relevant marketing programs
  •  In times of recession smart, entertaining, and relevant marketing can become a refuge for the stress and nervousness of most consumers. It does not mean that every brand has to produce an escapist 90 minutes movie but a brand can become a relief point for all the bad news from the real world. It’s not a coincidence that the Olympics had some of its best TV ratings ever.
  • Most brands don’t adapt their websites and ecommerce offerings to reflect a recession mind set. This weeks New York Times magazine includes a simultaneously hilarious and sad article of how financial companies have not modified the communication from their web sites to reflect the current financial situation or their own perilous state.
  • There is not better time to diligently understand the impact of all marketing spend by a brand. It amazes me that so many brands are still clueless about the impact of their marketing dollars and the lack of any kind of intelligence of how to optimize their marketing investments. Only spending on SEM because it’s directly measurable does not mean it is the best investment strategy. 

Recession hurts and puts a lot of stress on most marketers but it should force us to be smarter and more insightful.

7 Comments:

Blogger Bhupendra said...

Micheal,
This is a good post. I am with you in your thoughts.

But for me and many others who are involved in Analytics profession (which is largely driven by Financial Clients), the time is very bad.

In this condition, can you suggest me three things to do to get Financial clients invest in our services in spite of their internal crises.

Thanks,
Bhupendra

2:07 AM  
Blogger Michael Fassnacht said...

Here are a few thoughts:
- It's more important than ever to figure out who are most vulnerable from your exiting member/consumer portofolio and at risk to leave. Understanding it will significantly enhance your retention rates
- It's critical to understand the share of financial services that your brand has with your consumers. Tough times will motivate consumers to consolidate their financial services providers with the most trusted brand. It's a huge opportunity to steal from other financial providers.
- It might be an opportunity to get outsource fees from your clients. Some clients might be under the pressure to reduce internal staff, so there is an opportunity to pitch a more efficient, smarter, and stronger partnership with a clearly data driven and analytical focused firm.

Just a few thoughts.

3:20 PM  
Blogger Bhupendra said...

These are great points. Thanks for pointing out.

Bhupendra

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