If you cut marketing budgets in a recession, you are sacrificing the long term profitability of your company and its brand

•February 6, 2009 • Leave a Comment

I’m sure there are many chief execs out there who are being told by their marketing staff or their agency that in a recession they should be maintaining their marketing spend and in some cases, increasing it.

Budget cuts

Many will think that this is just a plea of desperation to ensure that they are still in a job next month but it is actually true – I am saying it and I am neither your client nor do I work for you.

The fact is, when times are tough, consumers want a brand to justify every penny they spend on your brand that little bit more. In a land where everyone is economising and looking to cut down spend, why should they continue to buy your product when there are cheaper alternatives out there?

Take a hairdressers for example; I may get my hair cut at a rather expensive salon that, in reality, isn’t really a necessity. I could go to a barbers and pay £5 to get my hair cut instead of £40 at a central London salon. Likewise, women could choose to stop colouring their hair or grow it long to cut down on their costs. For this reason, that salon now has to convince you that it is worth making sacrifices in other areas in order to continue to fund an expensive haircut that you could get much cheaper elsewhere; something they probably never had to do before. One slip in service, one unwanted cost cut, and that customer will go elsewhere. They will need to explicitly communicate (in their brand and through their staff) that they are worth the extra money and that you, as a person, need them.

This is the same in many other industries. Everything from butter to smoothies, clothes to credit cards all need to convince people that their product is better than everyone else’s and that they should cut corners in other areas in order to continue to pay for their products.

Research has proven that share of voice is far more important that share of market in an economic downturn and that any short term cuts will effect long term profit, but yet, companies continue to cut their budgets.

I can understand that brands want to see ROI on every penny they spend (echoing the point above) but making huge cuts isn’t the way forward. Cutting back on high profile sponsorship deals is acceptable but cutting budgets across the board really isn’t that wise.

At times like these, a brand should be reassuring customers, empathising with them and offering marketing initiatives aimed at letting them know that they are there to help. A supermarket reducing the costs of basic goods is a prime example of how to help customers out without cheapening their brand. This will of course need to be communicated through marketing channels.

Its going to take balls for a company to say they are going to maintain their marketing budget despite the downturn, but as marketers will tell you at every seminar you will ever go to ‘when everybody zigs, zag’.

The importance of delivering on your brand promise

•January 11, 2009 • 3 Comments

Delivering on your brand promise is a necessity in the modern consumer environment. Meeting (if not exceeding) consumers expectations should be the basis of all businesses. If you pride yourself on outstanding customer service, make sure that all call centre staff are trained to the highest standards and offer resolutions to issues in the outstanding way in which you promised. If you say that your products are durable and reliable, don’t use cheap parts sourced from Korea. If you are a premium brand with strong heritage, use premium materials and make things with pride.

brand promise

This would seem the basics of branding but yet companies often lose sight of their brand in order to save money. Although offering short term gains, in the long term, this will result in the loss of loyal customers and brand equity.

Take HSBC for example, I have banked with them for five years and have never really had any problems. Then, all of a sudden, everything went wrong. I would get locked out of online banking on a monthly basis and I gave up trying to use it, their call centre was transferred overseas and as a result, their service became atrocious. I started going round in circles between online banking not working, no being able to help me, poor service, anger, online banking not working…

After these never ending and rather infuriating monthly circles, I then turned on the TV to see HSBCs latest ad. The ad told me that HSBC are ‘the world’s local bank’ suggesting that they understood their customer’s needs which, by my recent experiences with them, they don’t.

If the ads had talked about rates or products then I would have probably stuck with them for longer and given them the chance to mend the relationship with me that they had started to erode (as I believed that their rates and products were good). But they didn’t. They had me shouting at the TV as, to me, it was all lies. They were not delivering on what they said so I left and went to a bank that did understand my needs.

My new bank exceeds my expectations at every touch point of the brand and as such, I have become an advocate, encouraging new people to join. The new bank prides themselves on good customer service and understanding me and, they do.

The credit crunch is going to see far more offenders as they look to squeeze money out of consumers in the tough economic climate. Only time will tell if deviating from their brand promise will result in long term losses, but there will definitely be some brand casualties coming out of the downturn.

Hiring a brand advocate makes life easier

•December 25, 2008 • 2 Comments

Employing people who are already advocates of you brand can be a great way of improving performance and service. A call centre worker who is a big believer in the brand will be more passionate, helpful and friendly than someone who drags themselves into work for a company/brand that they hate.

Questions such as: do you buy our products? What do you think of them? Do you tell other people about them? What would you do if I gave you a free [your product]? is a great way of finding out how someone feels about your company before they even do a days work.

Obviously, this is not to say that if they are not a an advocate of your brand or have never purchased your product that they should not be hired, but it is a good way of finding out how eager they are to work for you and, potentially, how good they will be at the job.

If I am mad on Apple Macs and iPods and I go to work for Apple, I will put twice as much effort into that job than I would if I worked for Microsoft, and that sort of passion is something that money can’t buy.

When pitching for business in my industry, potential clients want to know that you are passionate about their brand and want to do the best job you can for them. So, why not apply this idea to staffing? After all, hiring a friend is always better than hiring a foe.

You don’t have to like it for it to be right

•December 14, 2008 • Leave a Comment

I was recently round a friend’s house and a few of us were watching TV when the advert for Barocca, an effervescent vitamin tablet, came on. I immediately went into a rant about how poor it was and that the execution was dire.

To my surprise, all my friends were smiling and singing along to it and started to tell me how great they thought it was.

This, to me, was like being a fly on the wall at an audience testing session and got me thinking about how easy it is to get hung up on producing amazing creative rather than just getting it right.

On paper it is not a great ad – if you were to give it to people to analyse I’m sure many would slate it – but my friends loved it.

This really shows the importance of planners and audience insights and staying true to the brand and product you are selling. The people who produced this ad obviously stuck to the brief religiously and delivered an ad that was spot on for the target demographic (which I was clearly not in).

The ad isn’t going to win awards and it isn’t going to be on the first page of a portfolio but for the demographic it is spot on, and that is really what it is all about.

Be consultants first, executors second

•December 8, 2008 • Leave a Comment

How many times have you been asked (if you are a PRO) to sell in a story that is absolutely terrible? What does that do to your self confidence? What do your journalist contacts think about you afterwards?

Often the reason for doing this is because a client has told you what to sell in. They see their latest printer launch as the best thing since sliced bread and that it is something that everyone should know about.

The reality is, this printer launch is not the best thing since sliced bread and no one cares. So what do you do? Some agencies (and I have worked at these) would take that bad idea, pass it on to a junior and ask them to sell it in. The idea would bomb, you would get no coverage and then either go back to the client with your tail between your legs or put it out on a wire and hope for the best. This is wrong. Not only does it give juniors a bad impression of the industry (young talent that you should be nurturing rather than alienating) but also means that your client doesn’t get the results he or she wanted. No body wins.

PR agencies used to be called PR consultancies and I think this is telling. Many have lost the consultancy side of things and have become more executors of ideas fed to them by their clients.

I know there are agencies out there that take the lead on campaigns but others have become their clients’ puppets. Why is this? Why do some do as their clients tell them to and some challenge the client throughout a project? Is it simply the difference between a good and bad agency or is there something more? Your thoughts please…

High fashion websites: are they missing a trick?

•December 8, 2008 • 1 Comment

With the success of Net-a-Porter and the steady sales of luxury products continuing despite signs of a recession, why are luxury products not capitalising on this with strong online brand engagement activity?

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Many fashion brand owners aspire to having websites such as Gucci or Dior’s, but a list of the top 50 best fashion and beauty websites in the Telegraph (10/10/08 ) suggests they should be looking elsewhere for sites to emulate. Of the 50 websites featured in the list, only Mulberry made it in with websites from brands such as Gucci and Dior not featuring.

The reason these sites didn’t feature on this list is not because they look bad or don’t show any of the products, it’s due to the fact they provide the user with no real quality content. In an age where content is king, all you are presented with is a series of glossy photos and an unnecessary amount of Flash graphics. What about information on how it is made? The heritage of the brand? The quality of materials? Who is the creative director? What will the next line look like? What is going to be the next big thing for the brand? These questions will all be important to the user but are just not answered.

A luxury goods website should not be a glossy magazine in online format, but a true experience where you get the same boutique feel of the Bond Street store from the comfort of your own home. You should be provided with quality content that answers questions that a customer would have asked the shop assistant if they were to visit an outlet store, feel engaged with the brand and then, should they wish to do so, purchase an item in an easy to use online store backed by quality service both before and after purchase.

Having a site such as this would not only encourage customers to engage with the brand; learning what the brand is about and if it is for them, but also increase loyalty to the brand, driving repeat sales. This is something that a luxury brand would demand in store so why not online?

Luxury fashion brands are scared to break the mold and do something different. I think the ‘everyone else has a Flash site with pretty pictures so so should I’ attitude is a wrong.

For brands to be successful they need to challenge perceptions, engage change and not shy away from risks. One such brand that has done just that is Dunhill. Their website uses Flash where Flash is needed and not just for the sake of it, it provides content on the history of the brand and highlights its strong heritage in leather goods making. They have used Jude Law as a brand ambassador (he has been quoted as liking Dunhill before he signed for them and is a perfect fit), discuss their values and ideas, talk about the history of certain items of clothing and where they originated from and really provide the user with engaging content in a luxury environment – like you would expect if you visited their flagship Jermyn Street store.

High end fashion labels need to stop looking at what their competitors are doing and go it alone, bringing around change themselves and not waiting for others to do it then following suit. A brand that makes the shift from having content that consumers merely view, to having content of value that they engage with, will surely have long-term success in what is already a highly cluttered retail environment.