Lots of bad decisions have the same thing in common: Panic. While everybody else is selling, the soon to be #1 richest guy in the world and other bright investors know that a down market is the time to buy. Governments have been front and center lately, but the laws of economics have not been repealed, and there are still real companies delivering real products and services and creating real value. Especially in manufacturing. The overall picture might be grim at the moment but acting fearfully only makes things worse. That's as true for marketing as it is for investing.
Marketing panic mode usually includes a combination of budget slashes, price reductions and disparaging the competition. Plenty was made last week about Warren Buffet and other intelligent investors who know that down markets are buying opportunites. Intelligent marketing similarly leverages recessions and downturns to gain market share. By maintaining focused spending, (or even selectively increasing it) you may not come out ahead during the down period, but you can add market share that will pay off long term. It's not theory....I had first hand success with this twice. In '98 after the currency crash and in 2001 during the internet induced nuclear winter.
Steve McKee leads a firm that specializes in assisting companies suffering from stale brands and stalled growth. In his words, "Marketing dollars in a recession are like oxygen on Mt. Everest—the less there is in the surrounding environment, the more valuable the amount you possess becomes." Cutting your marketing spending is a sure way to give ground to competitors who are at all aggressive during the downturn. Especially smaller ones.
Marketing panic also often leads to chasing previously unwanted business. When buyers get nervous about their business or the economy, they cut back their spending. That usually means fewer orders, slower orders, or both. But if you try to quickly broaden your core product or service to appeal to a theoretically larger, wider group, odds are that your best customers will be even less satisfied, and given another reason to postpone or look elsewhere. The arguments that convinced you to avoid particular business in good times are unlikely to have changed simply because the market slowed. Enhance your value with increased focus on your core brand promise and thereby convince them to cutback on someone else.
Don’t discount and don’t disparage the competition. Discounting your price discounts your value, and there are very few businesses that can manage Wal Mart’s business model. Just mentioning your competition provides visibility they would not otherwise have received...and attacking them throws a spotlight of doubt on your own situation. Position yourself properly and you will automatically reposition the competition.
Marketing is not a department. It is a business wide decision with numerous interacting components. Panic shouldn’t be one of them.
