Some Thoughts on Marketing's Role in Today's Depressed Economy

The economic news continues to be bleak with no upturn in sight. Layoffs are continuing. The stock market continues to decline. Every night, the network news is loaded with stories of corporate and human distress. The marketing fundamentals of our economy may be undergoing permanent change. How should your marketing team respond?

I'll start with a principle that needs to shape your marketing actions: Marketing can't make anyone do anything that they don't want to do.

So, in this economy, if most of your customers don't want to spend money right now to buy whatever it is you're selling, what should you be doing? The correct "marketing mindset" for your company should be "how can I help (not sell) my customers in the short term in order to gain even more of their business in the long term."

There are many companies that are responding to today's economic conditions with deep discounts and deals and special offers to try to get reluctant customers to buy NOW. No doubt, some customers will respond to this. But most will not. However, they will remember the special deal price and when the time comes that they are ready to buy, they will not be happy about the return of "regular" pricing. Discounting is generally a one-way street. When you set a new lower price, it usually very quickly becomes the price that your customers expect to pay from that point on. So discounting may generate a short term lift, but the long term impact on future revenue and profits will be significant. Beware!

Smarter companies are shifting their marketing tactics without resorting to cutting their prices. One interesting example is Hyundai. They are promoting a "Forgiveness" plan that promises that if you buy a new Hyundai and then find yourself in economic distress and unable to make your payments, that they will simply allow you to return the car, without all the ugliness that is normally associated with that type of situation. Hyundai could easily have been investing the same marketing resources into promotions and discounts in order to sell more Hyundais RIGHT NOW. This softer approach is much more compelling and. I bet, more effective for them.

Other companies are recognizing that their customers simply want to exercise more buying caution in these uncertain times. Caution means "slow down" and "learn more" and "be sure." So the tone and style of your marketing should reflect that. You should expect longer sales cycles and be creating marketing materials that will gently push your customers along, providing the information they need and providing it with more frequency than in the past. The information you're providing may need to be more detailed and the after-the-sale service may need to be more robust (and less expensive). You're financing options may need to be expanded, with more options offered. Your guarantees may need to be strengthened or promoted more aggressively. All of these tactics will reflect your customer's mindset and, as a result, be more effective.

Marketing is about understanding your customers and communicating with them in ways that demonstrate understanding and provide compelling information that motivates them to do business with you. If your marketing shows that you don't understand the economic realities facing your customers today, then you're not doing a smart job of marketing.