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A lot of leaders are talking about updating their brands, repositioning themselves or re-engaging as marketers as they come out of the recession. Some of these conversations sound a lot like those we had frequently in the early and mid-90s: companies talking about moving further up the value scale by positioning themselves as what used to be called “solutions providers.” In other words, they want to be differentiated by expertise rather than just products.
A lot of CEOs trying to make that transformation during the earlier period became frustrated that their people wouldn’t “stop selling boxes.” The change can be a great strategy for the right companies but there are a couple of things that many learned the hard way. First, consultative selling requires different skills, tools and incentives – either your box-sellers need different training or you need different people. The act of buying consulting involves different calculus than buying products – the selling has to adjust. Secondly, so does the marketing. It’s not that the four P’s don’t apply, but it’s helpful to consider a fifth one: perspective. Marketing intellectual capability is about demonstrating what you know and how you think.
IBM was a computer manufacturer that underwent a massive transformation and is now all about Building a Smarter Planet. Check out its website, which is heavy on thinking and learning, or its barely branded asmarterplanet.com blog (look for IBM hidden at the bottom). Dell is still selling hardware; its website is focused on products and shopping. To see the an extreme example of thought leadership, try the consulting pioneers McKinsey, whose site is a monster of knowledge management. (Interesting that ex-McKinseyite Louis Gerstner led IBM’s shift.)
Being able to solve customer problems can be a great differentiator, and every company wants to spotlight differences as they look to reposition themselves. They just have to remember that, to really make that shift, they have to act differently, too.
Blogging about Forrester’s newest survey of US consumers, CEO George Colony says, “Technology is changing your customer, and your customer will change your company.” He cites a litany of ways consumer behavior has and continues to change and follows by pointing out “what it means” in terms of the ways companies market. The implications go well beyond marketing, though.
The findings generally confirm what most people think but do shed light on the pace and breadth of change: consumers are moving from off- to on-line channels, in all age groups; America’s media habits aren’t just shifting from old to new but have now reached 50/50; 88% under the age of 40 are regular internet users, which means our future customers are changing fastest; half of Americans research products on-line before buying and half of US adults play video games.
Colony covers the implications for marketing to consumers, but the changes highlighted by Forrester also suggest that marketing to employees, investors and others has to change, too. Those groups also increasingly rely on digital resources and are changing their media habits, researching employment and investment opportunities on-line and moving their social interaction to the web. And they are doing it far faster than the companies they’re studying, working for or investing in.
Think about whether your organization has digested and acted on the implications. For example, does your company emphasize interactive, online training, perhaps even using game-simulation? Research your company via its website as if you were a potential investor. Does the experience impress you and give you a sense of the organization’s personality and special qualities or is it more of a templated collection of facts and filings? Google the company. Do you get meaningful content from the kinds of sources your web-savvy prospective employee or investor will recognize and respect?
The debate within your organization shouldn’t be whether or not to tweet or blog. It should be what it has always been: are you reaching your “customers” (including employees and investors) where they are and making an effective case for yourselves in a way and place that matches their decision-making style? Or, as your stakeholders move deeper into digital realms, is there a widening gap?
What have consumers learned from the recession? More importantly, how is it going to change their buying behavior and what changes will last?
One thing seems clear: we’ve come to see our former appetite for debt as gluttony. The Fed says that this is the first time in the last 10 recessions that U.S. household debt has declined.
Will it last? According to Trajectory, which forecasts consumer behavior patterns, “the cohort of consumers coming of age in this recession will, like their great-grandparents who lived through the Great Depression, carry the attitudes and behaviors they learn now throughout their lives.”
Trajectory has identified three trends that are being accelerated by the recession and are likely to last beyond it: a demand for simplicity, discretionary thrift (the opposite of conspicuous consumption?) and mercurial consumption, where shoppers empowered by technology and social media quickly change the brands and stores they patronize. Also, though green consumerism has slowed, it’s expected to regain momentum after the recovery.
These predictions are fairly intuitive and aren’t unique to Trajectory. Companies updating their marketing strategies – and shouldn’t that be everybody—should factor them into their thinking.
One of Wayne Gretzky’s most famous comments is that great hockey players skate to where the puck is going to be, which isn’t a bad way to think about a hallmark of great businesses – they anticipate and adjust to where their customers are headed. That’s hard enough in normal times; in times of painful and historic change, it’s even more difficult and important.
Our president, Chas Withers, just wrote a piece advising companies that want to emerge from the recession with sales momentum to be “anticipatory and assertive in their marketing ahead of the shift.” Research from past downturns shows he’s right. The different nature of this recession and the evolution of the marketplace also means that anticipation has to factor in the different conditions that will exist after the recovery. Customers – both B2C and B2B – have suffered major losses and learned hard lessons. When things return to “normal,” it won’t be the normal we used to know.
Preparing for this recovery demands a lot of rethinking. As McKinsey & Company said in an advisory piece on the new rules for marketers, those who just follow techniques used in past slowdowns “risk betting on the wrong markets, customers, advertising vehicles, or sales approaches.”
I agree with the counsel Chas gives that any rethinking should include brand positioning, product and service priorities and marketing mix. I also think there’s a lot to learn from the ways individual companies see this. What changes do you expect from your customers and – to recall Gretzky—what are you doing to be where they’re headed?
I’ve been having a lot of conversations about what it’s going to take to be ready for the recovery — ready to succeed instead of just survive. The challenge in being ready is that we all know things have changed, but not necessarily which changes will stick and what others are ahead.
We know the people our success depends on will act differently, but we’re not sure exactly how. With customers using different resources and filters to make buying decisions, how should companies adapt sales and marketing to be relevant once spending ramps up? What should they do to capture a fair share of investment dollars when traumatized investors come back into the market? How can they hold on to the best employees and attract the new ones they’ll inevitably need when the fight for talent kicks back into gear?
Over the coming months, Communications Matters will offer perspective on issues that impact the communications profession — and vice versa. Today we’re offering an overview of the changes we see ahead. In each of the next four weeks we’ll take a deeper dive into the shifts we anticipate among investors, customers, employees and the media. We know there’s a lot of great thinking going into this issue and we’ll be looking for your insights and other ideas that businesses should consider in planning for the recovery.
So now we’ll turn it over to you. What differences do you think the communications profession will face when we emerge from the economic downturn? What kind of changes are you contemplating or would you recommend? We’re looking forward to hearing from you!
