When The Going Gets Tough, Get Marketing!

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Seminar given with Manchester Chamber, 11 February 2009.

For more like this, visit http://www.goldsbrough.biz

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  • Japan reached 250%
  • Every recession tells its own story - in the '90s, it all began with a housing bust ; in the '70s, it was the rocketing price of oil . In the 1930s you had a global stock market crash and a lot of runs on banks . This one has shades of all three - you could call it a Recession Greatest Hits . As in the past, the sheer pace of the decline has taken everyone by surprise. In fact, as this chart from Fathom Financial Consulting shows, the decline in the first six months is actually very similar to the average of past recessions. Now that it's hit, there aren't many predicting a speedy end. Growth in the new year is about as optimistic as it gets. It could be two or three years before the economy gets back to where it was - and the 2012 economy could look rather different from the one we had before.
  • A SLIMMER FINANCIAL SERVICES INDUSTRY, LOWER HOUSE PRICES, HIGHER BORROWING COSTS, FEWER MIGRANTS AND LOWER GROWTH RATES: THESE ARE THE FEATURES THAT WILL DISTINGUISH THE ECONOMY FORGED IN THE CRUCIBLE OF RECESSION, ACCORDING TO AN FT ANALYSIS. BUT, ACCORDING TO THE RESEARCH, THE YEARS OF DOWNTURN WILL ALSO BOOST EXPORTS AND SEE THE PRIVATE SECTOR START TO REGAIN SOME OF THE GROUND LOST TO THE PUBLIC SECTOR OVER THE PAST DECADE. Whenever we get back to normal, it will be a different kind of normal.
  • It’s a long time since the last recession. How many current managers were in management positions last time?
  • Do you know the origins of soap opera?
  • P&G first turned to radio in 1923 advertising Crisco on a New York station. Other products such as Ivory and Lava soap were advertised on 'product oriented' shows which were similar to today’s infomercials. But in the heart of the depression P&G took a step which changed not only that company but the broadcast medium forever while creating great demand for its products. The president of P&G at the time was Richard Deupree. In spite of the fact that shareholders were demanding that he cut back on advertising, he knew that people were still buying essential household products. So he created radio programming that did not focus on a product. Because of that, we now have a cultural attribute known as the "soap opera." In 1933, P&G went on the air with its first "soap" - "Ma Perkins," sponsored by Oxydol. P&G was so satisfied with the increase of sales, they went on to introduce "Vic and Sadie" for Crisco, "O,Niells" for Ivory Soap and "Forever Young" for Camay. By the time 1939 rolled around, P&G was sponsoring 21 radio programs and they doubled their radio advertising budget every two years during the Depression. Radio was one of the fastest growth industries of the depression. P&G virtually built daytime radio with its advertising budgets and programming. Two industries were thriving from the advertising budget of one.
  • Hillier examined marketing and financial data on 1,000 firms (mostly business to business) in Europe and USA, held in the PIMS (Profit Impact of Market Strategy) database collected by the Strategic Planning Institute in Massachusetts [30]. Hillier divided the 1,000 firms into three groups according to whether they had cut, maintained or increased their marketing spend during recession. For each group, he examined profitability (defined as inflation-corrected return on capital employed) during recession and during recovery. He found that those businesses which had increased their marketing spend were, on average, not significantly less profitable during the recession than those which had only maintained their marketing, or which had cut it. Profitability averaged 10% for those cutting their spend, 9% for those maintaining it, and 8% for those increasing it. The big differences came during the recovery and afterwards. During the recovery the firms which had cut their marketing spend in the recession averaged a fall in profits of 0.8%. Firms which maintained their spend had an increase in profit of 0.6% during the recovery, but those which had increased their spend in the recession enjoyed an average increase in profit of 4.3% during the recovery.
  • A difference was also evident in market share of sales during the first two years of recovery. Those firms which had cut marketing spend in the recession gained an average of only 0.6 percentage points of market share during the first two years of recovery. Businesses which maintained spending in the recession gained 0.9 percentage points in market share in the first two years of recovery. But companies which increased their marketing spend in the recession gained an average of 1.7 percentage points of market share during the first two years of recovery (see chart opposite). Hillier concluded “The natural reaction of many businesses experiencing a downturn is to cut costs in areas like advertising and promotion. Our findings prove that they should do exactly the opposite if they are to ride out the recession and thrive thereafter.”
  • e.g. Nationwide BS advertising how boring they are
  • Make sure your value proposition is in tune with the times.
  • Example – helping IFA to focus offer on profitable customers
  • Example – helping web development company to develop new offerings Talking to construction company – now providing skips rather than rent them
  • Example – Helping web development company to find new routes to market Helping software company to define the types of partners it needed to work with – resulted in acquisition by partner Share cost Develop market together Share information Increase scope of what you can deliver to customers Get referrals
  • Possible to acquire only the expertise, products and services that you really need, leaving the unwanted bits behind.
  • Take the example of the construction company another step – their skill is in managing large numbers of temporary workers at many remote sites. What about security, cleaning,…
  • Blogs CEOs being accessible – Jonathan Warburton – integrated with adverts Providing a human face to your organisation
  • Ask for referrals Ask for help
  • Sir Ernest Shackleton’s Imperial Transantarctic Expedition in 1914 has gone down in history as one of the most epic adventures imaginable. Shackleton and his 27 men became stranded on the ice and were trapped with no hope of rescue for 21 months. In January 1915 their ship, Endurance , became stuck fast in the pack ice. The crew waited patiently for their ship to break free, but, as the winter months set in their chances became slimmer. The pressure of the ice against the hull made the ship creak and groan, eventually being thrust upwards and onto her port side. On 21st November Endurance sank, taking with her their last hopes of sailing free. On 23rd December 1915 the men started to march across the ice towards open water, dragging their three boats behind them. This photograph, taken by the expedition’s photographer, Frank Hurley, is a graphic portrayal of the hardships, both physical and mental, that the men had to endure. It depicts the strain and effort that these men had to put in just to travel a short distance across the ice. In the terrible conditions the men averaged only 1½ miles a day as they battled against the freezing weather. Exhausted, they realised that their efforts were futile, so they stopped to make camp and waited for the ice to drift closer to land. It wasn’t until the following April that they were finally able to sail to land at Elephant Island. But this picture is also a reflection of the fact that, even after so long in freezing conditions, each man was still committed enough to their survival to put in exhaustive effort. This was no doubt thanks to the great leadership skills of Shackleton, who understood the value of camaraderie and morale to keep his men motivated. Each man knew that they all, literally, had to pull their weight if they were to come out alive. And each man did come out alive, following an incredible rescue effort mounted by Shackleton and five of his men, who sailed 800 miles across some of the most treacherous waters in the world to reach the whaling stations of South Georgia.
  • Hug your customers close – understand their needs Network and partner - we’re all in this together Don’t stop communicating
  • When The Going Gets Tough, Get Marketing!

    1. 1. When The Going Gets Tough…Get Marketing! Matthew Goldsbrough 11 February 2009
    2. 2. When times are good, you should be marketing When times are tough, it’s essential that your marketing is effective
    3. 3. Today <ul><li>Characteristics of Recession </li></ul><ul><li>Escaping from Doom and Gloom </li></ul><ul><li>Options and Opportunities </li></ul>
    4. 4. So, Where Are We?
    5. 6. Debt as % of GDP
    6. 7. A Typical Recession?
    7. 8. &quot;The economy is going to define our politics in Britain in the next year, the next five years, the next ten and even the next fifteen years. These are seismic events that are going to change the political landscape.&quot;
    8. 9. It Isn’t All Bad News! <ul><li>Footfall and takings up at Lowry Outlet in January … John Lewis Trafford Centre a ‘relative winner’ … Lowry had ‘best autumn season ever’ … Umbro expansion creates 220 new jobs </li></ul><ul><li>Manchester is “one of the best placed cities in the UK to match the economic strength of London and South East”, according to a new report on the city region’s economy </li></ul><ul><li>M&A activity </li></ul>
    9. 10. Whenever we get back to normal, it will be a different kind of normal. 1 2 3
    10. 11. Business memory is short
    11. 12. What Can We Learn?
    12. 13. Advertising During Thirties
    13. 16. Afterwards: Profitability Average percentage increase in profits during economic recovery: 1000 firms Marketing spend during recession, compared with before recession
    14. 17. Afterwards: Market Share Increase in market share (% points) during first two years of recovery: 1000 firms Marketing spend during recession, compared with before recession
    15. 18. Outperforming Competitors
    16. 19. Where Do I Want To Be?
    17. 20. Where Do I Want To Be? <ul><li>With improved long-term value? </li></ul><ul><li>With greater market share? </li></ul><ul><li>With enhanced reputation? </li></ul><ul><li>With even more loyal customers? </li></ul>
    18. 21. What’s Changed for Customers?
    19. 22. What Are Customers Looking For Now? Behaviour changes observed Behaviour changes expected How I will need to respond
    20. 23. What’s Changed for Customers? <ul><li>Fear </li></ul><ul><li>Uncertainty </li></ul><ul><li>Doubt </li></ul><ul><li>Delay </li></ul><ul><li>Indecision </li></ul><ul><li>Cutback </li></ul>
    21. 24. What Are Customers Looking For Now? <ul><li>Trust </li></ul><ul><li>Reliability </li></ul><ul><li>Reputation </li></ul><ul><li>Certainty </li></ul><ul><li>Support </li></ul><ul><li>Bargains </li></ul>
    22. 25. Marketing
    23. 26. Marketing Strategy PR Advertising Direct Mail Web Newsletter Email Networking Social Media Events Webinar Offline Online
    24. 27. Marketing Strategy www.goldsbrough.biz/techniques Where Are We? Where Could We Get To? Where Should We Get To? How Will We Get There? Strategy Development Business Activity
    25. 28. Opportunities
    26. 29. Strategies Focus
    27. 30. Strategies Diversify
    28. 31. Strategies Partner Partner
    29. 32. Strategies Acquire
    30. 33. Strategies Reinvent
    31. 34. Opportunities <ul><li>Acquire easily </li></ul><ul><li>Purchase cheaper </li></ul><ul><li>Introduce changes </li></ul><ul><ul><li>With customers </li></ul></ul><ul><ul><li>With employees </li></ul></ul><ul><li>Outsource </li></ul><ul><li>Bring in temporary high value expertise </li></ul>
    32. 35. DISCUSSION
    33. 36. Outperforming Competitors
    34. 37. Outperforming Competitors <ul><li>Maintaining or Enhancing… </li></ul><ul><ul><li>Reputation </li></ul></ul><ul><ul><li>Visibility </li></ul></ul><ul><ul><li>Market Share </li></ul></ul><ul><li>People follow leaders – so act like one! </li></ul>
    35. 38. Marketing Strategy PR Advertising Direct Mail Newsletter Email Events Webinar Web Networking Social Media Offline Online
    36. 39. Search for Trust
    37. 40. Web <ul><li>Influential in more than 80% of buying decisions </li></ul><ul><li>Constantly working for you </li></ul><ul><li>Easy revision with topical message </li></ul><ul><li>Choose your web supplier carefully </li></ul>
    38. 41. www.goldsbrough.biz
    39. 42. Web <ul><li>Influential in more than 80% of buying decisions </li></ul><ul><li>Constantly working for you </li></ul><ul><li>Easy revision with topical message </li></ul><ul><li>Choose your web supplier carefully </li></ul><ul><li>Blog </li></ul>
    40. 43. goldsbrough.blogspot.com
    41. 44. Networking & Social Media <ul><li>Chamber </li></ul><ul><li>BNI </li></ul><ul><li>B4B, etc… </li></ul><ul><li>LinkedIn </li></ul><ul><li>Facebook </li></ul><ul><li>Twitter </li></ul><ul><li>Youtube </li></ul>
    42. 45. linkedin.com/in/goldsbrough
    43. 46. When I get back to the office …
    44. 47. What I Will Do Now Activities Stop Continue Start Where I Want To Be
    45. 48. Inspiring leadership in the face of extreme adversity
    46. 49. Endurance
    47. 50. Ernest Shackleton
    48. 52. Shackleton
    49. 53. If You Do Nothing Else <ul><li>Revisit your Value Proposition </li></ul><ul><li>Hug your customers close </li></ul><ul><li>Network and partner </li></ul><ul><li>Don’t stop communicating </li></ul><ul><li>Refuse to be a victim </li></ul><ul><li>Act like a winner </li></ul>
    50. 54. Evaluation Time
    51. 55. www.goldsbrough.biz
    52. 56. Interest Rates

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