The stock market fall this year is frightening economists, who say we may be ending a seven-year growth cycle. The Fed says U.S. financial conditions have worsened. And in Silicon Valley, where the fastest, most innovative private companies have thrived, more people are predicting a big shakeout, even raising comparisons with the severe 2008 downturn.
Downturns are tough, but the best companies will invest in smart strategies and technologies to overtake competitors, and thrive once things get better again. Companies that injudiciously slash marketing find that they must spend far more than they saved in order to recover, according to a study by the Harvard Business Review done after the last recession. The best performing companies balance spending with tactical changes to bolster immediate revenue generation.
Smart growth strategies are the focus of our Feb. 22 event for senior marketers, Marketing.FWD Summit, in New York City.
Here’s a smattering of the crucial tips we’ll hear. They’re strategies you should implement even in fast-growth times, but they are especially relevant in a downturn.
1. Don’t automatically slash marketing
It’s a cliche: One of the first things you cut in any downturn is your marketing budget. Well, nope. It’s more complicated. Target was described in a HBR case study from 2010 as a company that made the right investments during the last downturn — including greater investment in things like R&D and marketing than its rivals — earning it a place among the best performers of post-recession growth, in terms of sales and earnings. At Marketing.FWD, we’ll hear from Target’s Kristi Argyilan, SVP of media, guest engagement, and measurement, who will explain how the company is spending on innovative marketing, drawing on influencers and its customer base to amplify its message. She’ll be sharing new examples, similar to the Imagine Dragons video released at the Grammy Awards last year that defied the standard ad spot format used by most advertisers.
2. Customer data can show you the way
American Express’ Mary Ann Fitzmaurice Reilly, SVP for global brand, integration, and insights, will also draw upon her company’s experience during the 2008 recession, when its surveys found that small businesses needed more customers, and that most consumers wanted to support smart small businesses. That helped it later create Small Business Saturday, a campaign to get consumers to buy from small businesses — which has generated an estimated $143 billion in sales for small businesses. The company’s Open brand helped small businesses by providing them useful content and allowed those customer to share information, a win-win that contributed to the company’s strong recovery after 2010. Staying close to your customer’s needs by using data will be the trick to business model efficiency for 2016.
3. Defense is the new offense
In slow-growth times, you need to double down on your most loyal and core audience, which will generate you more revenue than what new customers bring you anyway. We’ll be hearing from Starwood’s Matt Valenti, VP of guest experience intelligence, who will explain how Starwood is tracking the needs of loyal customers through innovative survey designs. Starwood, which recently announced a merger with Marriott to become the biggest hotel chain in the world, found its most loyal customers are its most profitable customers, by far. Valenti will discuss how almost everything can be quantified — even emotions such as disappointment or delight — and in Starwood’s case, it found that even hallway carpeting can impact a guest’s expectations. It was able to quantify disappointment, and see that this is two times more powerful than delight. By translating emotional responses into tangible, actionable data points, Starwood can use them to improve hotel products and programs.
4. Leverage ‘brand’ marketing, but make it data-driven
GoDaddy CMO Phil Bienert will explain why GoDaddy decided to not sponsor the Super Bowl for the first time since 2005. Most of the company’s customers are small business owners, often with five or fewer employees, so blanket coverage via the Super Bowl doesn’t make sense. He has shifted GoDaddy away from big brand-awareness campaigns and toward personalized, data-driven marketing. The company is using psychographics, not just demographics, to segment audiences for targeting. Bienert will reveal results from the company’s campaigns, which overall has helped average revenue per customer go up by 7 percent, and sales grow overall by 15 percent over the last year. But we’ll also hear from Amazon’s Andrew Donkin, head of worldwide brand and mass marketing, about how his company decided to innovate its brand approach – including most recently leveraging the Super Bowl, of all things – but followed up by sending snippets of the ad to targeted audiences across social channels. This built better integrated customer experience across all channels, and made brand advertising a data-centric exercise.
5. Shift to digital, radically
This one may sound obvious to tech companies, but many other companies — especially larger ones — still have online and offline managers working in silos. This cripples their ability to adapt to rapid change. We’ll hear from Dana Anderson, CMO of Mondelez, the $50 billion food company that owns brands such as Oreo, Cadbury, and Toblerone, on why her company is moving to aggressively target digital channels, even if the majority of the company’s sales are made in physical stores. Buying actions are increasingly being triggered online, where Generation Z, a big part of the company’s customer base, spends its time. Four years ago, the company spent 6 percent of its global budget on digital, but now that’s 25 percent, fueling a dramatic increase in return on investment in the form of net revenue, according to the company. Anderson will present findings from a never-seen-before project that she worked on last year for her CEO around this “New Fluidity.”
6. Exploit targeting opportunities
As we’ve reported often at VentureBeat, many companies aren’t taking advantage of the growing number of personalization and targeting technologies, both in email, and in digital advertising. It’s time to invest in those, for more efficient marketing spend. We’ll be hearing from one of the masters of optimization and targeting, Pepijn Rijvers, CMO of Booking.com, the flagship company of Priceline, which is the largest travel company in the world. Booking.com is also the largest spender of advertising on sites like Google. Booking.com is widely respected for its ad strategies, and Rijvers will share some of his company’s newest initiatives — namely, novel ways to target customers based on their emotional and other contextual states. The company’s significant investments in data science give it an edge, so other companies should take note. He’ll be speaking with Brad Smallwood of Facebook, which is also leading this experimentation.
7. Invest in less-expensive, cloud-based technology
We’ll hear from an executive at the Gilt Group, the online shopping site, about its latest strategies for growth in a time when the hype around the first wave of online shopping has died down. Gilt will share its tech strategies, including who it has bet on in Looker, a business intelligence tool that is cloud-based and self-serve, and a simplified version of the better-known BI public company Tableau, which has seen rocketing revenues over the past year.
That’s just the start. We’ve got a bunch more great marketing leaders as speakers at the event next Monday, from Baublebar, Visa, Harry’s, RentTheRunway, Oracle, and IBM — all ready to share the latest tips for high-growth marketing. Look forward to seeing you there.