Marketing in a Recession: Only the Paranoid Survive
The recession affects each of us in different ways, but until recently it hadn’t touched me personally. But this week it did. My wife works at Macy’s here in San Francisco in a job many women can only dream of – a shoe buyer responsible for the Juniors Shoe business (Steve Madden, Sketchers, etc.) – and we had always assumed she would spend her entire career there. However, on Monday Macy’s announced a consolidation closing three of their four divisions, eliminating all the merchandising executives on the west coast. So it seems likely within a few months she will no longer have her “dream job”.
This got me thinking again about marketing in a recession. A recession is about making hard choices. If your wife loses her job (or you do), you have to make hard choices about where you will cut back. And if your company experiences a slowdown, you have to make hard choices about where you will cut costs.
The problem is that few of us are good at stepping out of our own day-to-day lives to see clearly which hard choices to make, and even fewer of us make those hard choices unprompted. And yet that is exactly what we need to do to achieve the best results.
What Would Your Replacement Do?
Marketo’s VP of Sales and Customer Success, Bill Binch likes to talk about the idea that Only the Paranoid Survive. Among other ideas in the book, a key one is that only those who constantly try to anticipate change will survive when change happens. One great way to think about this is to imagine that your company brings in some new hotshot to replace you. As he or she looks around, what would he or she say about your practices? What would he or she do differently?
Why can’t YOU do those things?
I’m sure that Macy’s CEO Terry Lundgren went through a thought process similar to this. He looked around and saw his company operating as four separate divisions, creating overlapping costs and reducing their buying power. I’m sure that consolidation was a hard decision, but it’s one that makes sense as an outsider.
Marketing during a Recession
What does all this mean for your marketing and lead management practices? Over the last few years, the ways B2B companies buy products and solutions have fundamentally changed. Today the buyer is in control, empowered by ready access to information. This means marketing and sales must change as well. These changes are creating what Andy Grove calls a “strategic inflection point”, i.e. a time when the fundamentals of a business are changing significantly. Today, the effectiveness of traditional lead generation methods is declining; prospects do not want to get calls from you until they are much later in the buying process; social media and other new tactics are emerging as new ways to engage with prospects; and the demand for targeted, relevant communications is higher than ever.
The recession is magnifying the intensity of this inflection point, shortening the time marketers have to react and deal with the change. Budgets are being cut, the need to do more with less is rising, and the time marketers have to make an impact or get replaced is getting shorter.
Are you still spending large chunks of your budget on tradeshows and mass advertising? Do you still attempt to call every new qualified prospect as soon as they give you their name? Are you scoring your leads and prioritizing the most engaged ones for your sales teams?
If a new executive came into your job, what hard choices would they make? What would they say about how your marketing and sales teams get along? About your use of social media? About your demand generation processes? About the metrics you track and report upward?
If a new executive came along, would he or she be happy with the marketing systems you have in place, or would they use the opportunity of being new to go out and implement a marketing automation system?
As Andy Grove says, in times of change managers almost always know which direction they should go in, but usually act too late and do too little. The recession is creating an inflection point for businesses and marketers. In Macy’s case, they acted decisively. Are you going to use the recession to break out of a plateau and catapult your marketing to a higher level of achievement?
Note: for tips on how to market during a recession, see my post 7 Strategies for B2B Marketing during a Recession: The Definitive Guide.