Marketers – Are You Ready for the New Normal?
Posted on April 10, 2009
On tonight’s evening news, Brian Williams reports on President Obama’s desire to reset America’s expectations as to the “new normal” for the US economy. Specifically, the end of the strong economic growth, rise in asset values, and overall prosperity that we’ve all enjoyed the past decade. If this is true, then businesses must now take stock of how they are positioned to compete in the “new normal” where just retaining last year’s customers might actually define a successful sales plan. Where preserving EBITDA (instead of growing it) is seen as meeting financial targets, and where introducing fewer products and marketing initiatives (but better executed) might be seen as a better marketing plan. Are you ready for the new normal?
If the President and economists are correct, then it means that marketing departments are going to need to shift their focus from being a mile wide and an inch deep to becoming an inch wide and a mile deep. With this new-found spare time on their hands due to slumping demand, marketers are going to have to begin evaluating the basics of their business to identify and focus on their most profitable customers, product, channels and campaigns (see our blog posts on marketing forensics).
The new normal may also mean that marketers are going to need to learn how to build a business case for that new big ad campaign whose ROI better be something other than “branding” (whatever that means). It might mean that marketers are going to be confronted with multiple tactics options but only able to fund a short list — so what tools/techniques are you going to use to prioritize? Cost of delivery? Lifetime value? ROI? Other criteria?
The new normal just might mean that every point of market share equals someone keeping their job — so it’s time to accept the fact that metrics are here to stay. When the “tide was rising” for everyone (year-over-year sales growth), flawed marketing campaigns and unmeasurable advertising could be buried in the annual budget as sales and profits grew nicely and everyone got their bonus — but those days are gone.
I’m not a believer in Darwinian evolution — but I do believe there is something to the “survival of the fittest.” The “fit” marketer (defined as someone who is continually testing, listening, measuring, optimizing, and repeating) will eat. The rest? They’ll either adapt, receive bailouts, or perish.
Are you ready for the new normal?