22 Oct Marketing Communications – the guardian of business reputation – in the good and bad times.
Many a global breakthrough in innovation, technology and humanity has been achieved in the aftermath of a crisis or in a race to win against the odds. As we face a second wave of Covid-19 infections around the world, businesses may need to step back from the edge and be sure they have not missed the opportunity to accelerate and grow by sleepwalking into a state of hibernation.
The disruption caused by Covid-19 is most certainly a catalyst for change and innovation, with governments and the private sector alike needing to react rapidly to solve social and economic problems. As the older generation has been forced to adapt to a more digital life, we are suddenly faced with a new reality: our parents and even grandparents have suddenly become digital millennials – shopping, communicating, working, and learning online. A large proportion of society, usually more comfortable going to the office, the shops, and entertaining, have been forced to become digital natives overnight. This means businesses are having to react to a new digital reality with significantly greater urgency than before – but it also means that the more digitally-savvy marketers know where to find these customers and how to engage them.
As businesses face these new challenges, many – as in so many crises past – are paralysed and unsure of which way to turn or how to reach their customers, not realising that opportunities may be sitting right in front of them. They are beginning to hibernate, which may be the beginning of the end for many. In the world of business-to-business (B2B) companies, they will undoubtedly leave no stone unturned as they look for cost reductions. Despite the historical studies, two areas likely to be hit hardest are marketing communications and research and development (R&D).
Across multiple industries, marketers face the prospect of long-term budget cuts and resource restrictions. Marketing teams are facing tough times as companies realign priorities to keep the books balanced and healthy, not realising that it is this team that could provide the lifeline to growth and even survival. Many a leader will not fully understand how important the marketing communications team is and the role they really play in the good and bad times – but managing and building a reputation cannot be underestimated. Many businesses ignore or forget what Warren Buffet said: “It takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.”
However, as any B2B marketer will know, despite the countless examples of business growth, reputation and credibility being underpinned by good marketing, a large proportion of time is spent defending their very existence. This can be draining, so at a time when this discipline should be central to business planning, it is understandable that many may choose not to raise their hand to shape a strategy and plan for the new norm.
However, a quick look at the history books tells us that the survivors and beneficiaries are often those who start planning during a crisis and quickly adapt and pivot to changing conditions, often investing ahead of the curve.
Two studies – one by the Harvard Business Review (HBR) and one by Bain – support the idea that companies that lean forward during the tough times are more likely to succeed.
HBR conducted a study called “The antidote to a recession”, tracking more than 4,000 businesses over multiple recessions. It concluded that those that performed best managed to strike a balance in cutting operational costs while also investing in marketing and R&D. This is further backed up by a recent Bain research report, Recession Strategies to Take the Lead, where the strongest companies in the last recession went on the offence early while many of their peers focused on survival and waited for the cycle to clear. They invested substantially in R&D and maintained marketing while competitors cut back.
A DELICATE BALANCING ACT
Logic and evidence show that this is not necessarily the time to be dialling back support and investment in the discipline and skill that is in place to build and, more importantly, protect the business’s reputation.
I would argue that marketing is probably more critical and important during a crisis than in boom times. Firstly, it is the gatekeeper of an organisation’s reputation – so being clear about the strength and stability of the business is priority No 1. No one wants to lose customers because they incorrectly think they have chosen a failing or weak provider. Secondly, marketing will be instrumental in shaping a clear path and strategy for recovery, ensuring the business is ready to accelerate with a plan. Finally, during the crisis, marketing is uniquely able to flex (in a way that product development, R&D, strategy cannot) and be agile enough to support the business to take advantage of opportunities that may arise in the short term.
So how does marketing achieve this delicate balancing act? Four key ingredients can dramatically improve your chances of success during difficult times. Three of them are the following: the ability to deliver a truly integrated strategy; establishing a flexible and agile team that sees the broader picture; and knowing how to stretch every dollar. The fourth ingredient – and the hardest to achieve – is being brave and knowing when to invest to win. Bringing all of these together will help the business navigate difficult times and prepare for recovery and maybe even help the business seize new opportunities and grow while the competition is stumbling and stalling.
Advertising veteran Bruce Barton once said: “When times are good, you should advertise. When times are bad, you must advertise.” Unfortunately, this sentiment has been widely misinterpreted and hijacked by many bad marketers to defend irrational expenditure. What he meant was spending in a downturn makes much sense if the prevailing winds are with you – for example, your business is strong and stable, and your competitors are failing, leaving a whole army of customers looking for a new partner to support them.
In conclusion, this is the time to be creative, agile and integrated – do not hide under the covers and wait for the winds to pass. Marketers will be fundamental to recovery. Let them work their magic and guide your businesses reputation through the storms.