Marketing during a recession
I read a number of articles lately on marketing in recession times. From the collective wisdom some actually make good sense. Here are five ideas that can guide you on how to handle your marketing in a time of recession.
People will look for a way out of the recession, and wouldn’t it be great if your product could offer them the solution? Try to bring an innovative product; it can be a radical, large or smart innovation. Research (by Market Strategy, over 30 years and 1000 companies) has shown that the ROI of those companies that invest in innovation was raised by 24% whereas those who lowered their investment rate dropped by 0,6%
Radical innovation creates a new market where previously was none. They are not hampered by the shortcomings and battle on existing markets, they define their own. Medical breakthroughs or revolutionary new green technology will make a viable market despite recession.
Less radical is large innovation, like the introduction of the iPod in the mp3 market. It was not new, but it was a large innovation, it now dominates the market. This has increased several times in volume because of it.
Then there are smart innovations. These are small innovations that give clear distinction between your product and that of your competitor. Like open sourcing your interfaces (which Linksys did.)
Make dust, or eat dust. You know that some of your competitors will fight you on price, unless you have a product that truly stands out (see innovate) your prices and margins will erode faster than a shoreline in a tsunami. What will be left after the recession? Will customers expect you to raise prices again, or have they grown accustomed to the lower levels?
Is it a question of holding your breath till you reach the end of the tunnel, or will the tunnel lead to another place? A place with different values and products, the question is not if you emerge from a crises, the question is how you emerge.
We talked about investing and innovation. These are times where you should focus on your creative minds. You need those that swim against the flow even more than before.
Steve Jobs once said: “it’s more fun to be a pirate, than to join the navy”. Why is it that everything he touches seems to turn to gold? (Apple, Pixar, Disney). It’s because he can see things differently, beyond the boundaries of today’s limitations. Endorse the Jobs like characters in your organization, challenge them. Use them to come up with that innovation that will change the course of the outcome.
Only dead fish swim with the flow. Take some time to assess what your customers are doing, start the innovation process internally, and think about how and where you want to address the market with your new innovations. There are only two positions of interest: either you are the market leader, or you are the challenger. If you are positioned (and comfortable) in the middle, you will most likely be crushed like a grape in a wine press.
In general markets behave in a U curve, which means there is a low price range and a high price range. People will buy your product if it is low cost, or if it is the best, there is no middle range in a recession. This prospective also provides a guideline for your innovations, when you target the lower price range your innovation could be in the production process, whereas a radical or large innovation allows you to set a higher price.
Leadership is about faith; it is about vision and will to achieve this vision. If you do not have faith in your vision, your products or the path you take, why expect it from your customers? If your company is bad weather, assemble a “war team” that is committed to your vision. Make them visible, let them illuminate the rest.
People rallied behind Obama, not because they thought he had the best product, but because they believed in him as a person. Steve Jobs is known for his reality distortion field, his sheer enthusiasm encourages those around him to believe in the impossible, and often achieve it.
The night before Waterloo, Wellington noticed a small number of people with torches going around the enemy ranks. Napoleon was visiting the troops. Wellington spoke the famous words: “I have no doubt that we will win tomorrow, but this circulation will cost us an additional 10,000 lives”