23 March 2009

What's your post-recession marketing plan?

This article is excerpted from the 23 March 2009 edition of “globeandmail.com”.

The economic downturn has many small business marketers stampeding the exits, slashing budgets and cutting prices.

Though understandable, and rational, this full-on retreat is in most cases occurring too late.

Planning for a storm is far more effective than looking for an umbrella when you're already wet.

The point is not that too little planning was done in the run-up to the recession, which hit everyone harder than expected. The point is to avoid the same mistake in reverse.

"But we're just getting used to the new normal," many business owners may say. Exactly. Because so many entrepreneurs and SMBs will be focused on manoeuvring through 2009, this is an excellent time to craft a 12-to 24-month get-out-front-of-competitors marketing strategy.

There are many components to any marketing strategy. For a post-recession marketing plan, three pieces really matter: who, when, and how.

Understanding customers (the who) and the changes in their behaviour is the first step. This assessment will tell you how to position your products or services, but not the timing (the when) of your market bounce back. So sorting out where you sit in the economic pecking order comes next.

Finally, getting products and services to market may change. So projecting channel dynamics (the how of retail, distribution, Web and so on) a year or two from now is also a key elements of the overall strategy.

Understand changes in customer behaviour

Solid marketing strategies start with answers to customer needs and wants, that is, customer behaviour rather than demographics ("I'm just tired and frustrated, and I'm making a decision not easily predicted by my age, sex and income").

To plan for a rebound, small business marketers have to understand which behaviours have changed, and why.

Getting a handle on the motivations behind the changes allows for creative responses, now and later. More importantly, marketers have to assess which changes are likely temporary, versus those which are liable to be more permanent.

The clues needed to make this call tend to be grouped into selection and habit buckets.

A behavioural change tied to selection, such as opting for a less-expensive hotel, is probably temporary. A habit change, such as buying groceries rather than dining out four nights a week, is more likely to be lasting. If such changes were true, boutique hoteliers could plan to weather the storm and grocers could beef up (pun definitely intended) for a strong market, post-recession.

… [O]wners have to intimately know their own customers, and what has changed, inside out. There are many ways to get these insights, but they all start with conversations.

Savvy marketers are constantly engaging customers in discussions about products and services, and about themselves: their pain points and what would make them happy. Some walk the aisles and talk to customers at random.

Others build panels of folks they re-engage often. Many rely on traditional market research. The tools matter less than getting on with it.

Understand the pecking order

Planning to meet customers on their terms is one thing. Timing it correctly is another altogether. The world economy will not bounce back all at once, everywhere….

The reality is probably somewhere in between. So, more effective is to sort out which geographies and market spaces are likely to come back, and in what order.

It's debatable whether regions hit first will also bounce back first, or will suffer for longer based on shoddier economic fundam