Through thick and thin
The cost of living crisis will impact us all but don’t get out the chopping knives for your marketing budget just yet, says Ashgrove’s Terry van Rhyn.
I often wonder why we still need to be reminded of the importance for businesses or brands to remain top of mind with customers during an economic downturn or recession.
Historically, it has been proven that when you cut or trim marketing budgets during these trying times you will struggle to recover when things improve eventually.
This has nothing to do with surviving as a business by applying aggressive cost savings to avoid staff layoffs or protecting shareholder equity. In the end, it is all to do with looking after and protecting your existing revenue streams – the lifeblood to your business.
One way to look at this is to relate it to normal human behaviour. If you have cultivated a friendship and one day your house burns down, you would expect that your friend would offer or contribute to help restore at least the first three tiers of Maslow’s hierarchy of human needs (physiological, safety and love/social belonging).
That might sound a bit dramatic but I’m trying to make a point. We all build relationships with brands, products or services, and during tough economic times or a crisis like COVID or a war, we expect some level of reciprocity for our loyalty.
Having a finger on the pulse of your clients or customers is vitally important and allows you to demonstrate empathy. This will firstly show that you have your clients’ or community’s well-being at heart and that you are still there to help and open to exploring ways to offer solutions to help alleviate pressure.
Imagine when a financial services or accounting business goes dark during these times. What message does that send to its clients who are concerned whether their wealth or investments are protected?
We must also recognise that many business growth models are built on a referral model and the domino effect that can result if confidence is compromised along this chain.
I have always maintained that most businesses do not pay enough attention to their existing client base. Instead of spending a lot of money on new business/client acquisition, they should rather find ways to continuously enhance the experience or product offering of those who are already loyal supporters.
In my mind there is a potential 25% revenue increase you can harvest from your current client base and at the same time cement their loyalty. A personal phone call or email of reassurance is all it takes. All anybody wants is to know is that there is a real person behind the brand or business and that they care.
The key is to act early and act decisively. Your strategic business and marketing documents should be living documents. When a dramatic shift in the market occurs, your first step should be to review these and your operational strategies.
Positioning of your business and the key value propositions are likely to have been established during more stable times, but you simply have to react and adapt to a changing market environment.
The recent impact of Brexit, COVID and the war in Ukraine are all contributing factors that affect business across all sectors, and many businesses are forced to constantly evolve in the short term in order to survive in the long term.
Survival in any market condition will depend on assessing the conditions, planning accordingly and doing so with agility and confidence. Without a plan you will continue to be reactive to the effects these conditions throw your way and you will never get ahead of the curve.
Failing to plan will ensure that you will always be in crisis mode: the downward spiral is inescapable and no business can survive by constantly being in a defensive position. My advice is to always make a brutally honest assessment of your situation and plan, plan, plan – then execute.
With the vast array communication channels now available, there is no reason to cut all marketing activities. A quick and simple review on where you are spending your budget, the audiences you are reaching, and a ROI assessment would give you the answer of where to trim, cut or do more of what is working.
Your message hierarchy also needs to be adjusted to remain relevant. With the increase in cost of living due to multiple macro factors, it will be important to calibrate your messages to demonstrate that your business is in tune with client needs and that you have listened and will provide effective solutions to ease the pressure to make their money stretch further – or to protect it.
Above all, show that you recognise the challenges we all face but project a feeling of confidence in the future and that everything will work out fine in the end. You will need to get your tone of voice right and avoid a condescending or patronising attitude – a very easy trap to fall into.
In closing, the current market environment affects us all. No matter whether we are a manager, business owner, MD or any other business leader, we are also all consumers. Treat as you would want to be treated – we’re all in this together folks!