Marketing in a Downturn: Invest in the Upswing

14 Oct

My son just finished ‘book the 13th’ of Lemony Snicket’s Series of Unfortunate Events. Figuring I’ll never have time to continue past the few chapters I’ve skimmed, I asked him how it ended … did our fair Baudelaire children get a “happily ever after” ending after all?

He wouldn’t tell me directly, but he did describe a Lemony Snicket-ish metaphor from the books. He said that the story is like peeling back the layers of an onion. The more you peel, the more you cry.

Which brings us to the financial crisis.

Maybe you’ve read about this, but it bears repeating…here’s how I understand what’s happening:

  • Mortgages are defaulting, causing anything mortgage backed to default as well.
  • Banks now doubt each others’ credit, and won’t lend to each other.
  • Banks, in turn, are less likely to lend to businesses – and when they do, it will be at a higher cost.
  • Many businesses will postpone or cancel technology upgrades, equipment purchases, and expansion, freeze hiring and salaries, and reduce headcount.
  • Consumers will face job loss and lower wages.

Business-to-business concerns will find their customers cutting back orders. Marketers of high value, complex purchases like technology will be faced with longer sales cycles.

A slideshow by blue-chip venture capital firm Sequoia Capital is getting a lot of attention right now. Their advice tech startup executives: batten down the edges. Cut to the bone. Focus on revenue. Pay reps on their sales. Measure your marketing and only do what works.

During the tech bust starting in 2001, you saw a lot of this. From my standpoint, marketing and PR agency budgets were slashed or dropped altogether – even by large companies with stable revenue.

Decent advice. But as you do this, I’d like to suggest alternate point of view: Invest in the upswing.

What if, instead of across-the-board cuts, you took the downturn as an opportunity to reshape, refine and streamline your communications and marketing for the turnaround? There is no magic message or marketing trick to loosen corporate purse strings. Instead, position yourself to be the one they turn to when they’re ready. You could:

1) Revisit the message – Is the story you tell today getting you closer to the sale? Is it getting you there fast enough?

2) Reshape the strategy – Is your marketing built around what influences your prospects? Cut the marketing communications vehicles that are running fumes. Fix those that aren’t working like they should – is it time to incorporate social media into your website so your fans can share what you have to sell? Focus on reaching prospects where they are – through the web, via the media and in their communities both online and off.

3) Invest in relationships that matter – Every market is a community. Are you engaged? If you “go dark” in PR and marketing, will key consultants, editors, analysts, gurus reporters and influencers remember you when you return? Participate in communities, network with influencers, contribute to discussions through speeches, blogs and articles.

I’d like to start a conversation here if I can. I’m going to spend the next few weeks writing about marketing during the downturn – what’s going to work, what’s not going to work, what companies are doing well and not so well today. And I’d love to share your stories – post them here or email me at ken@kadetcommunications.com.

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4 Responses to “Marketing in a Downturn: Invest in the Upswing”

  1. Keith Monaghan October 15, 2008 at 9:21 pm #

    Hi Ken,

    I identify with this post, not only because I had a similar experience with my daughter regarding Lemony Snicket, but because it brings to mind a quote that I find myself frequently sighting to clients these days:

    “Our belief is that spending through a market downturn creates a competitive advantage for the market upturn, and an extra dollar spent today has extra dividends for tomorrow.” — Mark-Hans Richer, chief marketing officer for Harley Davidson

    As you say, it doesn’t loosen the corporate purse strings, but it brings a bit of logic and reason to an otherwise highly emotional topic.

    I’ve found that even the clients most resistant to spending on marketing these days are open to using free online tools like twitter, Meetup or Facebook (naturally).

    But their enthusiasm often feels more like a knee jerk reaction to the current financial crisis than a well thought out marketing initiative–an almost desperate hope that “social networking” is going to save them.

    Of course, it’s my job as their consultant to talk some sense to them. Therein lies the challenge, eh? ;-]

    I wonder if you or anyone else reading this has had that experience?

    Thanks for a thoughtful post.

  2. Ken Kadet October 15, 2008 at 11:05 pm #

    Keith,
    Thanks for a thoughtful comment … The challenge is time and priorities, I think, as much as money. There is so much activity that happens inside an organization that is considered “essential” — activities that have to be managed before you get the to “new media stuff.”

    You make the key point — the real opportunity for an organization isn’t just to try something new, it’s to try something new with an eye to resetting marketing priorities around a new communications environment.

    By the way, good ideas here … http://www.keithmonaghan.com/2008/10/13/10-ideas-for-free-marketing-in-tough-times/.

  3. Keith Monaghan October 16, 2008 at 1:37 pm #

    Ken,

    And thank you for the thoughtful reply (the link too!). Looking forward to reading more of your posts.

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