Escape the New Year's Marketing Hangover

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Kevin Clancy and Peter Krieg offer top 7 marketing strategy habits to AVOID in 2009 to cure recession-related aches and pains.

There's nothing worse than a hangover that just won't go away.

Looks like New Year's revelers aren't the only ones starting the year with a throbbing head and queasy stomach. Indeed, marketers all over the country are faced with a bottom-line economy in a deep freeze, and their consumer and B2B customers opting to hibernate until the forecast improves. Meanwhile, there's senior management lurking in the hallways, butcher knife in hand, looking for any excuse to take yet another slice out of the marketing budget, marketing strategy be damned.

According to Kevin Clancy and Peter Krieg of Copernicus, a research-based marketing consulting firm, the fix for this kind of marketing hangover takes more than Alka-Seltzer. "It'd be easy for marketers to opt for quick tactical solutions to try to deal with the current situation," explains Clancy. "Dropping prices, offering more deals and special promos, attacking competitors in advertising--these certainly have intuitive appeal as fast sales-boosting answers."

Continues Krieg, "The problem is the effects are only temporary--you hit your numbers for the quarter, but then what? Marketers still have to figure out how to get customers and keep them happy and do it with shrinking resources." The authors of "Your Gut Is STILL Not Smarter Than Your Head" suggest avoiding the following seven nasty marketing strategy habits will yield far more positive and lasting effects on recession-related aches and pains, not to mention better marketing performance:

Nasty Habit #1: Thinking only of yourself...when it comes to customer satisfaction.

Marketers' efforts to improve customer satisfaction will fall flat if they concentrate only on figuring out how well their brand alone satisfies customers on the things they want from products or services in the category or industry. Not understanding how well a brand is doing relative to competitors leaves a gaping information hole when it comes to deciding where to allocate limited resources. Say a bank finds out its customers give it an 89% satisfaction rating on "providing accurate statements," but a 75% when it comes to "reasonable ATM fees," the bank would probably focus on fixing the fees. Smart move? Not if its customers gave all its competitors a 98% on accurate statements and 45% on reasonable fees. Considering only their brand may give marketers absolute numbers, but absolutely no help when it comes to making the investment moves that will pay off the most.

Nasty Habit #2: Giving up without much of a fight....when it comes to positioning.

Noted authors Al Ries and Jack Trout talked about positioning as the "battle for the mind," but these days most marketers wave the white flag of surrender without putting up much of a fight. Clancy and Krieg found that less than 10% of buyers could associate anything with the five leading brands in a wide variety of categories that even remotely resembled a reason-to-buy message (a.k.a. positioning). Yet a clear, definable positioning can work wonders for marketing performance (not to mention a marketer's career). Consider Skol, a bit player in the Brazilian beer market and barely eking out a profit until, that it is, it took up the "smooth flavor" positioning. Today it's the #3 brand in the world--without a drop sold in North America--and its brand manager became CEO of Inbev, the world's largest brewer and the new owners of Anheuser-Busch.

Nasty Habit #3: Ignoring what's right in front of you...when it comes to innovation.

The next big opportunity in terms of profits AND competitive advantage could be the next version of a marketer's current product. Take the case of Dunkin' Donuts, a power brand in New England that a few years ago hoped to expand nationally. At the same time it worked to develop and test completely NEW store concepts to roll-out into national markets, it also identified what it could proactively change about its EXISTING stores that would boost sales and profitability. While Krispy Kreme and Starbucks shutter stores around the country and struggle with their brands, Dunkin's recharged configuration of its current stores means it has more resources available to continue to expand and take on the new 800-pound gorilla in the coffee shop category, McDonald's. Getting so wrapped up in finding the next product or service breakthrough that marketers ignore the product or service right in front of them means they are more likely than not leaving money on the table.

Nasty Habit #4: Talking the talk, but not walking the walk....when it comes to integrating marketing communications.

It's not exactly a well kept secret that each media channel or "customer touchpoint"--be it advertising, PR, sponsorship, direct, tradeshow, promotions, or the sales force--tends to have its own set of managers and handlers who may or may not tune into (or care) what's going on with everyone else. It's not impossible to scale the walls that separate advertising from PR, promotions from the sales force--it could be as easy as communicating who the key customer targets are for the marketing organization as a WHOLE and more closely monitoring to ensure the sum of the parts haven't gone off on a tangent. If marketers want to maximize the power of their marketing efforts across communications channels, they have to put maximum effort into getting everyone on the same page.

Nasty Habit #5: Leaving media in the dust...when it comes to market segmentation.

Marketers take the time and effort to identify and develop a profile of different market segments to guide product or brand positioning decisions, but when it comes to deciding where and when to communicate with the folks who are in theory most likely to buy their brand, they are left to their own devices to figure out the most efficient media buy. In fact, many of the common techniques used to sort buyers do not deliver groups with distinguishably different media preferences and exposure patterns--a pretty big knock against the usability of the segmentation. Whether they have more money to work with or less, marketers are not going to get the most mileage out of their marketing spend if they don't consider the media decision in their segmentation plans.

Nasty Habit #6: Making too many false friends ....when it comes to brand loyalty.

While it's tempting to believe that "heavy buyers" or "heavy users"--the 20% of customers that account for 70% or even 80% of a brand's sales--are the most loyal and dependable of the lot, this is not always the case. For years, Saks Fifth Avenue put substantial marketing money towards rewarding the folks who spent the most, until, that is, it discovered that they were not exactly monogamous. They were simply fashion-forward, high-powered, wealthy women who spent a lot of money on clothing and spread it around to different stores including Saks' competitors Bloomingdales, Neiman Marcus, and Nordstrom. Saks set to work to find its real friends--the customers with positive attitudes, feelings, and perceptions of Saks' brands, stores, and merchandise--and develop a close relationship with the customers who felt closest to them.

Nasty Habit #7: Making much ado about nothing....when it comes to Marketing ROI.

The drive towards making marketing more accountable has brought in numbers, numbers, and more numbers, but little in the way of useable performance results. Marketers can show senior management here's what we got on this performance metric, that's true, but they can't say if it's a good number, a bad number, or, very importantly, how to improve the number. In spite of their plethora, the numbers haven't made it any easier to justify spending, nor provided any guidance on what's working, what's not, and what to fix. And that's the kind of information CEOs and CFOs need to see and hear about if marketer's want them to take marketing seriously.

As Clancy says, "There's nothing worse than a hangover that just won't go away." He points to Dell, GM, and Starbuck's as brands heading into '09 with "the worst hangovers one can imagine."

But Krieg offers this assured fizzle-free cure: "Change the marketing strategy habits that are getting in the way of healthy performance and even these brands can make a fast recovery."

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