So many of our team have found these links helpful, we wanted to make them more generally available. Both articles highlight the acute need to craft propositions very carefully around the ‘why invest in IT?’ message.
First, McKinsey’s views on how companies should be Managing IT in a downturn: Beyond cost cutting. It shows some key areas where IT suppliers can be focusing to create propositions and messages that have a sound business case in this economic climate. The report has some great ammunition for making targeted investments in IT (especially to streamline processes and make more of existing information) rather than cutting costs across the board:
“Investments in technology-enabled business processes can deliver up to ten times the impact of traditional IT cost reduction efforts.”
And here is Forrester’s view on which parts of the IT industry will be least affected according to current spending plans. It’s not that companies won’t be making IT investments in the downturn: the key point is that to access the budgets that are growing (especially services and outsourcing), marketing messages will need to major on instant ROI. There’s no doubt that marketing can really come into its own in taking this case to buyers – provided that we dig beneath the obvious headline ‘credit crunch’ messaging to the issues that really matter.
Campaigns that are grounded in an understanding of these spending trends and ROI cases are a critical component of ‘recession-toughened’ marketing – we’re already seeing the hunger that buyers have for information on how and where they could be making savings.
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What does ‘recession-toughened’ marketing look like? My tuppence worth:
1. Market where the money’s coming from (i.e. do we need to strngthen existing customer relationships and sell more, or target industries that still have growth potential, or aim to pick up business from competitors…)
2. KPI, productivity, profitability -driven propositions: there’s a short window (two months? three?) to build go-to-market propositions around the KPIs and issues that the audience really care about. (’Financial Services is one of the most fast-changing, competitive industries. Therefore you need to buy some SOA’ really doesn’t cut it…)
3. Then there’s the real marketing proposition – the ‘why should I meet you/come to your event/have a meeting with your salesman when my job is under threat and there’s a freeze on spending?’ – and the contact strategy to get your killer argument infront of an increasingly desperate audience.
Because I think they are increasingly desperate, and getting the right message to them could look like a much needed lifeline.
For economic climate, what about simply climate? Is green the new black?
I like the B2C idea of rising hot-water-bottle sales showing how people are looking to save on fuel bills by turning off their central heating. Could we be seeing a similar movement in business?
After all, the green IT angle is gaining credence all the time – for example, with silicon.com’s 2008 Agenda Setters list (http://www.silicon.com/research/specialreports/agenda-setters-2008/why-green-tech-is-more-influential-than-ever-39300164.htm). A number of environmentalists feature in the top-50, more than ever before, in fact. And Jonathon Porritt, fresh from his stint as keynote speaker at Fujitsu’s green data-centre launch, is climbing high at number 17.
Environmental, power-saving technologies introduced by the likes of IBM, Intel, and Asus (also ranked in the list) show how much the IT sector is now investing in the green business agenda and the soon-to-be-imposed government legislation on carbon emissions will make this an even bigger issue, and a lucrative market to push.
Perhaps more and more businesses will be tightening the belts on their hemp trousers in the near future…
We’ve no doubt all been reminded recently of the wisdom that ‘recession is to a large degree a self-justifying prophecy’.
Radio 4 listeners will certainly be no stranger to this most frustrating of domino effects: people fear recession, people stop spending, people create recession. Doh.
But should we take heed of this when we talk of ‘marketing in a recession’? Is there a danger that, by talking to customers and prospects about recession, downturn, economic meltdown, credit crunch and other such phenomena, we scare them into budget freezes and inaction?
It would of course be naive simply to avoid mention of it, and Paul is right about the areas to focus on when we do ‘take the stage’ – but we may want to make sure we include a sprinkling of positivity and encouragement.
With a concentrated effort, I am sure we could end up talking ourselves out of it after all.
Good advice… “Follow the money”
But where is it least expensive to drive sales in a recession?
I’d answer with “existing customers” (hopefully you have some)
During difficult economic times, customers become both increasingly risk-averse and more selective about their spending.
This means that chances are if a customer doesn’t already know you and trust you (i.e., you have an existing relationship with them), then it’ll be 10 times harder to convince them to buy during a recession from a “stranger” (someone they haven’t done business with before).
Let’s face it. Customers with money to spend can afford to be selective. It’s the “golden rule” – he with the gold rules. And customers realize they’re in the driver seat now, more than any other time, so they can be much more selective.
Unless you have a product that others just can’t live without (good for you if you do), then you’ll be a lot more productive farming your installed base of existing customers with more cross-selling, up-selling and going deeper into those accounts than spending a a tremendous amount of time and energy on new customer acquisition.
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