If your sales are down, you are not alone. With skyrocketing inflation and interest rates, consumer demand is naturally at a low. It is therefore tough for digital marketers in today’s environment to reach the ambitious targets shaped by the post-covid growth rates.
But rather than throwing in the towel, marketers should instead reprioritise, rethink and reposition their efforts to focus on achievable growth areas. And yes, this means your old playbook needs an update… but you have options to impress your CEO.
The double-down on demand-gen opportunities
For some businesses, the answer will be simple: increase marketing spend to capture more customers. The simplicity of this strategy has a lot of benefits. Stakeholders will immediately understand the vision, and it requires little re-organisation of teams and budgets, which brings less organisational debt. Major changes always bring indirect costs and can lock you in for future organisational transformations.
However, although you may avoid some indirect costs, this strategy comes with some real costs, obviously. Increasing investment in a demand saturated market will exhaust diminishing returns, and your current ROI will not be sustainable. Competitors are also likely to pursue a similar strategy (since it is so simple), which can drive up costs without adding value. So keep an eye on the market before asking for the extra budget.
Is “the double-down strategy” right for you?
Ask yourself these key questions, and if the answer is yes to all of them, go for it:
Are you noticing less competitive media buying auctions?
Do you believe the demand drop is short-term?
Do you have a healthy and efficient ROI at the moment?
Prioritising profitability and efficiency in media budgets
Total line revenue is nice, but what really matters is one thing: profit. For many businesses, this is a forgotten fact and everything from bonus schemes to budgets are geared to maximise revenue. For instance, what does the high return rate in Germany do to your gross-margin? Or have you considered how many subscribers drop off before the free trial ends in the UK? All revenue isn’t the same, and being intelligent around budgeting and using business data to identify pockets of efficiency can allow you to refocus your investments to profit yielding activity.
However, if your organisation isn’t geared up for surgical data analysts performing complex decisions with statistical models – then a financial crisis isn’t the time to start doing it. You need to be pragmatic around what tools you have at your disposal while being aware that sometimes there aren’t huge opportunities to be found. So be realistic.
Do you have a team enabled to identify efficiency pockets?
Ask yourself these key questions, and if the answer is yes to all of them, go for it:
Do you have at least one dedicated data analyst associated with marketing evaluation?
Are you aware of any differences in gross-margin derived from direct or indirect cost differences?
Brand building for long-term growth
If you cannot grow now via capturing existing demand, maybe it is better to focus long-term?
Marketers are often pressured to focus on short-term sales. But if you have exhausted demand meaning growth is not an option right now, the best ROI can be found from investing in strengthening brand recognition. So even if brand building takes time, it will make it easier to acquire the customers post-crisis.
Be careful not to fall for the trap of pouring money mindlessly into a comfortable media mix. Instead, use all relevant channels strategically to reach your audiences. Work with your creative team to become relevant and natively present for your audience in the mediums where they spend their time, so your message sticks and you maintain positioning.
Is brand building the right option for you?
Ask yourself these key questions, and if the answer is yes to all of them, go for it:
Do you have a strong creative team?
Can you explain the delayed effects to your CFO?
Does brand building have an effect on your customers’ purchase behaviour?
Conclusion
There is no single way to run a marketing campaign, and a growth strategy will be entirely contingent on your team, budgets and market conditions. The difficult times will be different for all companies, so it is up to you to make smart decisions. My key message: Don’t follow growth blindly, and instead take a good look at your situation to make the right decision for your business. And keep in mind, sometimes doing less is the best option.
Want to learn more about how to navigate hard economic times? Check out our blog with 3 strategies for the performance marketer or get in touch if you would like to apply a profit-driven marketing approach with Precis.
