Driving Growth in Turbulent Times
An Unsettled Flow Ahead
It seems like we might be headed into some choppy economic waters. In fact, JP Morgan recently stated there is an 85% chance of a recession based on S&P 500 data.
While it may seem tempting and convenient to cut down your marketing budget in the time of a recession, industry trends have shown that when brands stop advertising, they continue to see a decline in sales year over year.
What’s less well documented is how you should invest your marketing dollars during a downturn.
There are four steps to take in an audit of activities.
Purpose-Led Growth – Does your purpose naturally lead your growth strategy?
Develop a recession psychology-based segmentation
Do your experiences activate the growth strategy?
Are you “renting success” or do you have a plan to “own success”?
I was recently speaking about building Performance Branding Ecosystems with friend and former Leo Burnett colleague, John Greene. He said it reminded him a bit of Walt Disney’s growth ecosystem that Walt himself created in 1957.
Purpose-Led Growth
Disney's "Synergy Map" from 1957
At the center of his ecosystem, Walt Disney had the Creative Talent of Studio creating Theatrical Films. These stories would then fuel distribution of television, music, publications and comic strips, spawn an amazing merchandise licensing business and provide the content for Theme Park experiences. A studio of creative talent at the center of an empire that has since grown to
A market cap of $186 billion. A talented group of creators inspired to create awe-inspiring theatrical films. Purpose leading to growth. Truly a magnificent vision that we can now see as reality. A laser focus on product development and market development fueled the company for decades. In the 2010s- 20s, Disney embraced vertical integration. The key idea today is combining all of Disney's content production — movies, TV shows, live sports — with all of the company's distribution operations into just one business segment.
When your company thinks about growth, what is your center box? What is the purpose that leads to growth? Does your purpose fuel growth or is it just a statement of intention to do nice things in the world? How does your purpose, or the role you play in people’s lives, change during an economic downturn? How do you show up in their lives and help them along their journey?
For Kalahari Resorts & Conventions, a hospitality client it’s about “beyond-expectations guest experiences.” Combining the purpose of “bringing the culture, art and magic of Africa home to our guests” with beyond-expectations guest experiences has been a winning combination. Build an awesome product. Continue to develop new markets. For Rivian, it’s about harnessing the human spirit, our inherent “Adventure DNA,” into products that deliver an Electric Adventure Experience. Product + Market Development. For Clarios-owned OPTIMA batteries, the purpose is to be The Utimate Power Source — a source that powers people’s passion for machines. Once you create the growth ecosystem and really understand your center box, you can then look to create the right strategies for growth. Product Development. Market Penetration — sell more of a product in existing markets. Market Development — bring the product to new markets. Diversification — bring new products and ideas to the market.
Understanding The Psychology of Recession
With your Growth Platform solidified, one must then ask how we can serve our customers during the economic downturn. The easiest way to think of this is to view marketing as a service. What purpose does the product or service play in people’s lives, and what is the context for receiving the brand’s message. This shift in context can result in a shift in messaging, promotional offers, or a shift in tone and manner that is consistent with brand personality. You are starting to see this as brands recognize gas prices via promotional offers. There’s not a one size fits all approach to customers, and it may be necessary to build a new active segmentation based on “recession psychology” … exploring whether people soldier on, pull back or use a mix based on lifestyle. Like a good counselor, it’s important to understand what people are going through and support them in difficult times with solutions developed through empathy. Solutions that further the brand’s purpose and are activated through unique experiences. Solutions that drive immediate sales and build brand equity for the future. Performance Branding solutions.
Experience as Growth Activator
Increasingly, brands operate as ecosystems. Is your brand ecosystem tuned to deliver a customer experience/buyer journey that maximizes the lifetime value of the customer? Do you show up in the right way, in the right places, saying the right things? Do you spend your money on just delivering conversion to transaction, or are you taking the time to build emotional connections and long-term relationships?
As the economy shifts, ensuring a brand’s “owned experiences” deliver economic value will be essential to growth, as your current customers are much more profitable than the cost of acquiring new ones. So, invest in experience. And develop experiences that are true to who you are, but also understand the context of the moment.
Owning Success versus Renting Success
Brands across categories are at different levels of development in developing unified data strategies. Many have different functions, with different KPIs, speaking to the same consumer. Demand Gen, Brand, ESG, Experiential, Public Relations, etc. The rise of Holding Companies and the disintegration of offerings to support an increase in Agency billings has created big problems for brands who are now seeking more unified solutions.
As we tread into uncharted economic waters there is an opportunity to re-evaluate the current marketing organizational structure against unified objectives, business and data strategies. A shift from performance marketing to performance branding — all activities working together to drive sales in the short-term, build a customer data platform (CDP) and create brand equity for the future. Many companies are doing this, shifting money from social/search/programmatic strategies “renting success” from walled gardens to “owning success” through unique brand experiences that increase emotional connections, immediate sales and long-term relationships.
Creating owned Brand Ecosystems to be grown, fed and nurtured over time. Looking at customer data as an owned asset will shift the marketing mix.
Together we can venture into the economic unknown and come out stronger on the other side by following a simple, four-pronged approach:
Purpose-Led Growth Strategy
Understanding the psychology of recession
Invest in Brand Experiences
Own Success through owning experiences and data.
We’re all in this together. Understanding the moment and how marketing serves others will help us through.
About Pat Goggin
Pat is Partner/CSO at Morning Walk and can be seen wandering the city of Chicago wondering how we can do better. He is the originator of Leo Burnett’s HumanKind marketing philosophy, Morning Walk’s experience journey “Truth to Transactions,” and is now guiding the development of Performance Branding Ecosystems. His mantra is “head in the clouds, feet on the ground.” By day he’s bringing big ideas and strategic insights to MW’s vast roster of brands, and by night he’s keeping up with his wife and three busy kids.
