In times of COVID, second COVID, global recession, and a changing world order, should innovators just throw in the towel?
It’s easy to think that way as one bad headline follows the next, as consumers tighten their belts in anticipation of impending doom. What is the way out for innovators and marketeers? After all, within companies across the globe CFO’s are cutting marketing spend and not just tightening the purse strings but putting a reinforced industrial quality padlock on them!
Marketeers have to avoid the stereotypical response when this happens, that the ‘finance team just don’t understand what marketing does and if only we could have more money…!’. We all have to face the reality, the new reality that consumer companies and brands are going to have to fight for their very existence in the current market. Bain and Co tracked company performance in previous recessions. As the quote from Franklin goes, ‘Out of adversity comes opportunity’. 25% of the 700 tracked companies leapfrogged from the bottom quartile to the top, 20% made the reverse move. Companies have to look to the future, understand the potential shape of their individual markets and act, fast! This is where the marketeers have to work with the finance team, embrace the reality and work to innovate and create potential opportunities that the changing situation offers.
In the current, very uncertain market, future success will be about the survival of the fittest, companies that have understood the financial as well as the market reality and are willing to act nimbly, have the chance to move from being challengers in the market to leaders. Innovators hold the key to this by keeping the torch of innovation burning within companies because by doing so will make the difference between future success and failure.
It’s harder for companies to influence consumers since they are being led by the very strong headline forces that are telling them to tighten their belts. As Paul Bainsfair, Director General, IPA says in the recent IPA Bellweather report, October 2020,’ …the evidence proves that those who can invest in marketing during the downturn will reap rewards in both the short and longer term. They will increase their brand recognition, strengthen their brand positioning and get ahead of the competition. In fact, because many advertisers do not heed this advice, just maintaining spend at normal levels leads to a greater share of voice and in turn greater brand share.”
‘’Reducing marketing spend during a downturn is known to be a risky strategy and ultimately stunts future growth, so brands revising their marketing budget should act with caution and remain flexible.” Michelle Wright IPA Chair for England and Wales.
The only way to cut through is by making their offerings very relevant, resonate strongly and of the very now. As Deming constantly intimated, the answer lay with the producer not the consumer. Innovators need to be able to move fast, yet with the certainty that they carry the consumer with them. Real time insight, smart interpretation, nimble implementation and a swift test & learn process will reap rewards and unlock the potential of the current situation. Many of the answers may lie within the company, the art is to tease them out, the science is to deliver them efficiently and effectively, so pleasing the CFO and ensuring the future survival and ultimate success of the company.
Sources:
Bain & Co; How to bounce higher out of recession
IPA Bellwether report October 2020