Top 10 Marketing Basics For Surviving A Recession

The Time To Act Is Now

By David Miranda

To survive a recession (they historically last 10 to 12 months), marketers must be assertive, timely, and transparent. Assertiveness demonstrates confidence; timeliness demonstrates proactivity; and transparency demonstrates open and honest communication. This is not a time for the timid, the procrastinator, or the indecisive.

The following are 10 marketing basics for surviving a recession:

1. Don't panic. A recession is exascerbated by fear. Avoid knee-jerk reactions that appear to be desparate measures.


2. Over-communicate to stakeholders. Silence can cause anxiety among the faithful.


3. Be and stay aggressive. More aggressive competitors will seek to take advantage in a down market by stealing customers and, ultimately, share if they see an opening.


4. Focus on the basics - product/service quality, customer service, value pricing. During a recession, customers seek the optimum price/value for their money and trusted brands have a home field advantage over new entrants.


5. Concentrate on your core customers first. It is easier and less costly to get your core customers to spend incrementally more than it is to derive business from new customers.


6. Understand the difference and impact of both revenue displacement and revenue dilution before making price promotion decisions. Displacement means that your discounting displaces higher margin business to a competitor. Example: Coffee shop "A" decides to sell $1 cups of coffee to steal traffic from Coffee shop "B". The promotion is so successful that it creates long lines forcing many customers to get their coffee at Coffee Shop "B" at a higher price. This is displacement. Dilution is discounting the price on business you already would have achieved at a higher price. Example: Coffee Shop "A" normally sells coffee at $2 per cup, but decides to distribute coupons for $1 cups of coffee to boost traffic. Regular customers who were going to pay the $2 show up with the coupon. The result is that revenue is "diluted" with the coupons.


7. Be flexible and be ready to call "audibles at the line of scrimmage". The marketplace in a recession is volatile requiring many course corrections along the way.


8. Reduce the gap between thinking or talking about doing something and doing it. Cut through or eliminate unnecessary bureaucracy that can inhibit or delay timely actions.


9. Put people in charge, not committees.


10. Fund things that work and stop things that don't.

So, get going.

Corporate "Bulimia" Or "Anorexia" Is No Way To Keep A Company "Lean & Mean"

"Competing" Disorders Can Harm The Business

By David Miranda

In an effort to get or remain thin, some people go to extremes by developing eating disorders such as bulimia and anorexia. We all know the devastating impact either of these maladies have on the human body. We all know there is no simple way to be thin (and healthy). It takes a regimen of a healthy diet and regular exercise.

Such is the case in business. Typically in an economic slowdown, businesses seek to shed "excess fat" in the organization to make the organization "lean and mean". Although this is a commendable (and necessary) effort, too many go about it the wrong way and develop "competing disorders", i.e. corporate bulimia or anorexia.

Corporate bulimia occurs when a firm decides to "purge" internal employees from the org chart in favor of out-sourcing to third parties. On the surface, there is nothing wrong with that, but sometimes critical departments are affected, say customer service. This is where reducing costs, unwisely, takes precedent over the health of the organization. In this case, this purging leaves the firm, not stronger, but weaker. Purging customer service is a "bulimic" practice.

Corporate anoxexia is just as problematic. Here companies believe they can do more and more with less and less. They "starve" the company, i.e. "what is the very minimum we need to keep the company going?" A company cannot "starve" themselves to success.

Take a healthy approach to business. Avoid taking short cuts to success. Feed success and exercise your brains in making good decisions our your firm will be "The Biggest Loser."

No Country For Old Marketing

If You're Pining For the "Good Ole Days", You're History In Today's Marketplace

By David Miranda

Pundits opine daily whether the country is in a recession or merely a "slowdown" as the President recently described the present economic malaise.

Whatever term one decides to use, the fact is that record foreclosures, credit card debt, trade and budget deficits, and gas prices; declining value of the dollar; 48 million uninsured citizens; soft housing market; a credit crunch and a volatile stock market set the stage make for a challenging time moving forward for marketers.

What companies will do is predictable - they will contract and adapt to survive or be added to the "endangered species list". In a slowdown or recession, there is a "culling of the herd".

In this environment, advertising and promotion will not solve their company's revenue problems. As a matter of fact, desperate measures by desperate competitors could exascerbate the problem.

This is no country for old marketing.

What to do?

1. Don't panic.


2. Recognize and protect your base (your most loyal and frequent customers) from being "poached" by competitors.


3. Improve your price/value offering to consumers, i.e. adding value rather than reducing price.


4. Manage "stratactically", i.e. although economic slowdowns are typically characterized by tactical warfare, always consider the strategic implications of your tactics. Example: reducing prices instead of adding value will have long term negative implications on revenue and margins.


5. Be proactive, not reactive. A "me-too" tactical approach, i.e. waiting to see what the other guys are doing, can be fatal in a hyper-competitive environment.


6. Amputate anything that is extraneous to success, i.e. products, services, people.


7. Get back to basics.

Now get on with it.

What Planet Do Realtors Live On?

New Ad Campaign From the National Associaton Of Realtors Suggest It's Not This One

By David Miranda

Let's see. On this planet, in this country, there has been "mass canaries deaths in the mine" signs that a housing bubble was at the point of bursting fueled by a complicit mortgage industry and a highly motivated real estate broker/agent community. As Newton pointed out, "for every action there is an equal and opposite reaction." Bottom line: greed got out of hand, reality bites. Code name? Recession. Outlook? Layoffs, foreclosures, consumer debt, bankruptcies up. Jobs, home values, expectations down.

Yet here is the optimistic view of the National Association of Realtors of the chilly economic waters? "Hey, jump in. The water's great." This is like the Captain of the Titanic, after hitting the iceberg, explaining to passengers "Oh, no worries. We just stopped for ice."

The front page headline from the recent issue of Advertising Age , from reporter Alice Z. Cuneo read "What housing crisis? Realtors' ads defy reality". Bob Garfield, ad critic for AdAge, escalated the dialogue in his column titled, Pay Heed to What Realtors Don't Say in Their Latest Pitch. Both Ms. Cuneo's article and Mr. Garfield's column took critical umbrage to the new $40 million ad campaign by the National Association of Realtors.

The above mentioned articles do a better job of stating the case on the NAR campaign than I can do here, but it is the lessons to be learned here that is critical for all marketers.

Consumers are not stupid and gullible as the campaign would suggest. They are realists and it is an insult to their intelligence to suggest or opine that things are better than they are experiencing. Marketers have always communicated the best attributes of their brands using thesaural hyperbole, i.e. "better", "new and improved", etc. They do not serve their brands (or causes) well, however, when the communicated message defies reality. As someone once said, "you are entitled to your own opinions, but not to your own facts."

The fact of the matter is that the U.S. housing market is suffering and that means homeowners are suffering and that means the economy is suffering. Consumers need wise and considerate counsel, not irrational enthusiasm.

Let them know what they already know, "we've hit an iceberg, we're taking on water, we're sinking, save yourselves." Steer them to a lifeboat, not back to their "cabins" to enjoy the rest of the cruise.

If your customers are important to you, be upfront; be frank; be honest.

PS.
My friend and real estate guru, Gerry Davidson, has her own interesting POV on this subject on her blog, Real Concepts. I strongly suggest a read of her recent article on the subject and her always refreshing perspectives on the real estate industry. I nominate Gerry for NAR President.

Recognition Marketing - 2008 Is The Year Of Emergent Complexity In Marketing

Are You Prepared To Win?

By David Miranda

Does life seem to be more complex than ever before? This is surely the case if you are a marketer. It seems like every day there is a new marketing channel to consider employing or a traditional channel that is less and less effective than before. The result, for most marketers, is cognitive dissonance on some scale. Cognitive dissonance, to refresh your memory, is a psychological term describing the uncomfortable tension that may result from having two conflicting thoughts at the same time, or from engaging in behavior that conflicts with one's beliefs. Sound familiar? Feel familiar.

Marketing is normally spoken of in macro terms, e.g. marketing strategy, brand positioning, etc. This macro approach is still relevant and needed in today's new landscape. The cognitive dissonance occurs in dealing with the complexity of how to best execute the macro strategy in a marketplace of uber-choice and uber-competition that produces desired results.

The answer lies in what researchers call "emergence" also known as "emergent complexity". (The PBS series "Nova" had an interesting program on emergence that ran in July of 2007.)

Scientists describe emergence as a science that studies how complex patterns and behaviors arise from the actions of individual units acting independently. The overall pattern that arises from the behavior of the individual parts is called emergent complexity.

Sounds complex, but consider this example.

We are all familiar with the games checkers or chess. The rules of these games, though few in number, give rise to a huge number of possible moves, most of them irrelevant or outright bad if the ultimate objective is to win, not just play, the game. Among these possibilities are those that greatly influence the possibility of winning (the right moves) assuming they are part of a strategy that includes only moves that positively contribute to winning. The "right moves" are those that exploit a game's basic rules but at a higher level of comprehension for those that play the game well. Winning (or success), therefore, is based on a player's keen understanding of the emergent complexity of the game including the basic rules, the level of competition, analysis of past performance, and the moves and counter-moves of each player in a dynamic environment.

Sound familiar? Feel familiar?

2008 will be a year of emergent complexity requiring new thinking to succeed. Using the chess analogy, it will be like playing three-dimensional chess where a move on one board will have an impact on the other boards in play. What are the boards? Search (organic and paid), mobile, social networking, blogs, product placement, PR, TV (broadcast, cable, satellite), POS, direct mail, etc. etc. etc. Each of these "games" have their own unique rules of play. Each demands their own keen contextual understanding to succeed. Each has their own respective emergent complexity. Each cannot be appreciated unless understanding their respective impact and influence on the greater good.

Here are some tips to exploiting emergent complexity:

1. Understand the media behavior of your targeted audience.


2. Understand the basic "rules" that apply to the channels your audience is using.


3. Create an internal culture of continuous learning by exploiting the basic rules of each channel and developing appropriate strategies that employ "the best moves" while eliminating the "irrelevant or outright bad moves".


4. Simultaneously, think horizontally, vertically and diagonally. Avoid "thought silos". A great chess player considers all the pieces on the board when considering a move.


5. Organize thoughtfully. Put the right players of your organization in the right game, i.e. "a great checkers player doesn't necessarily make a great chess player."

In summary, be prepared to play the game of emergent complexity in 2008 or find yourself "checkmated" by the competition.