What it takes for CMOs to prepare for an uncertain future

Recessionary thinking isn't something many marketing leaders have experienced. But with the covid-induced economic recession on our doorstep, what can they do to try to come to terms with this new normal?


Cut versus spend

While the tools available to marketers to respond to previous recessions were crude, their options were also often limited by their organisation usually cutting marketing and innovation spending to rein in costs. Unfortunately, this would also restrict the only activities that had a chance of generating new revenue when traditional sources declined.

According to Melbourne Business School associate dean and director for the Centre of Business Analytics, Prof Ujwal Kayande, those organisations that cut innovation spending during a recession also find themselves with fewer new ideas to bring to market just as the economy is bouncing back and people are ready to spend once more.

“Recessions are not the time to cut back on marketing spend. But only a few firms are going to listen to this view,” Kayande says. “It is the firms that already have a strategic marketing emphasis that stand to benefit the most.”

Kayande cites numerous research that supports his perspective, including the 2005 study, Turning adversity into advantage: Does proactive marketing during a recession pay off?, which found those organisations that bounced back most strongly from recessions usually did not cut their marketing spend. A further study released in 2012 titled To launch or not to launch in recessions? found products launched during a recession generated greater sales and had better long-term survival rates, in part due to the reduced competition from other new products coming into a market.

But while marketers may find their budgets cut back, Garg agrees now is not the time for them to also curb the innovation in their thinking. “If marketers understand that a lot of behaviour is driven by uncertainty and risk aversion, they can try and capitalise on that and help consumers get out of this vicious cycle of fear and uncertainty,” he says.

Hence she says marketers should be making appeals to emotion and reminding people of happier times.

This strategy is being employed by Coles in its latest multichannel campaign, Value the Australian Way, which is designed to reflect the long history of the supermarket chain and reflect the needs and wants of Australians in 2020. Another example is the Qantas scenic flights program, which sold out quickly despite not actually taking people anywhere.

“That is a brilliant case of a marketer innovating,” Garg says. “They are using their existing infrastructure to come up with something valued by consumers who are hungry for travel and hungry for a change out of the day-to-day drudgery of the pandemic.”

What all of this suggests is that the uncertainty many marketers feel in their decision making is unlikely to lift any time soon, and the hope of reaching a new normal remains as elusive today as it ever has.

Behavioural change

According to principal of the marketing capability development consultancy MacMorgan, David Morgan, smart marketers will begin to pay much closer attention to customer behaviour and attitudes to uncover new patterns and behaviours, and will dig deeper into the micro communities within their customer segments to better tailor their messaging.

“We are able to use our brains to explain why this strangeness has happened, but for once we are not able to use our brains to predict what is going to happen next, because the uncertainty of what has happened doesn’t give us a platform for projection,” Morgan says.

“So marketers need to rip up their plans and start again. They need to zero-base everything. And the good, the resilient and the clever will do that. They have to start with data science and micro communities.”

Follow CMO on Twitter: @CMOAustralia, take part in the CMO conversation on LinkedIn: CMO ANZ, follow our regular updates via CMO Australia's Linkedin company page, or join us on Facebook: https://www.facebook.com/CMOAustralia.

 

Join the newsletter!

Or

Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.
Show Comments

Latest Videos

Conversations over a cuppa with CMO: Craig Davis

​Leadership resilience, startups scaling up, marketing best practices, customer insights - these are just a few of the topics we manage to explore in the latest episode of Conversations over a Cuppa with CMO featuring Craig Davis.

More Videos

JP54,D2, D6, JetA1 EN590Dear Buyer/ Buyer mandateWe currently have Available FOB Rotterdam/Houston for JP54,D2, D6, JetA1 with good and w...

BARYBKIN ALEXANDER ALEXANDROVI

3-pronged marketing approach for property disruptor Brickx

Read more

Was really informative. Customer retention is very important for companies as retaining customers are simpler compared to making new ones...

Bhooshan Shetty

What lies ahead for the future of marketing post-AI

Read more

Good day sir / madamWe CLOSED JOINT-STOCK COMPANY AO KAYUM NEFT OIL COMPANY is one of theleading Oil & Gas trading companies in Russi...

BARYBKIN ALEXANDER ALEXANDROVI

3-pronged marketing approach for property disruptor Brickx

Read more

Good day sir / madamWe CLOSED JOINT-STOCK COMPANY AO KAYUM NEFT OIL COMPANY is one of theleading Oil & Gas trading companies in Russi...

BARYBKIN ALEXANDER ALEXANDROVI

Oath to fully acquire Yahoo7 from Seven West Media

Read more

Thank you for sharing your knowledge. Definitely bookmarked for future reading! Check this website https://a2designlab.com/ with lots of ...

Ryota Miyagi

Brene Brown: What it takes to be a brave leader right now

Read more

Blog Posts

Life beyond the cookie: 5 steps to mapping the future of marketing measurement

​There’s no denying there’s been a whirlwind of response to the imminent demise of the third-party cookie from all parts of the industry. But as we’ve collectively come to better understand the implications, it’s clear this change is giving the digital advertising industry the opportunity to re-think digital marketing to support core industry use cases, while balancing consumer privacy.

Natalie Stanbury

Director of research, IAB Australia

Ensuring post-crisis success

The COVID-19 pandemic has exposed brands’ CX shortcomings and a lack of customer understanding. Given ongoing disruption, customer needs, wants and expectations are continually changing, also causing customers to behave in different ways. Just look at hoarding toilet paper, staple and canned food, medicinal and cleaning products.

Riccardo Pasto

senior analyst, Forrester

A few behavioural economics lesson to get your brand on top of the travel list

Understanding the core principles of Behavioural Economics will give players in the travel industry a major competitive advantage when restrictions lift and travellers begin to book again. And there are a few insights in here for the rest of the marketing community, too.

Dan Monheit

Co-founder, Hardhat

Sign in