It seems to have become an automatic reaction for us marketing people to say don’t cut the Marketing budget in difficult times. To me this is rather naive. The vast majority of companies will cut their Marketing budgets whatever we say. If you are a CMO or Marketing Manager my suggestion is to be pro active. Tell your staff that YOU are going to cut the marketing by 50% and ask for their suggestions about how to get the best results with that much reduced budget.  Set a meeting within a few days to brainstorm ideas and build some recommendations and justifications. Cuts of this scale will demand that people think differently because business as usual will not be an option.

At the end of the meeting you will have enough information to build a plan and justify actions. Write it within a few days and keep it short and customer based. Obviously it does not have to stick to exactly 50% but it does need to be a significant reduction. Then take it to the CEO or board for discussion. This will be your suggestion about how best to respond. This is Marketing being proactive and ahead of the game while other functions haven’t even started to think about how to respond. You will stand far more chance of getting your revised budget and the actions that you wish to implement agreed than anyone else. You have done your planning and will have some logic to back up your plan. This will lead to you being able to focus Marketing on delivering while other functions get bogged down in ain’t it awful discussions.

The worst thing to do is to ignore financial conditions and try to do the same old marketing in the same old way. Highly frustrating and potentially a very career limiting option.

Malcolm Says

I look after events for IoD Berkshire and we spend a lot of time asking members what works for them. The best category is events that draw repeat attendees. A good example are certain types of breakfast clubs. The benefit comes from being able to build the relationship over time and staying in peoples mind by repeat contact. There is no specific format such as informal networking, speakers or topics that always works the best. However, the event has to provide the opportunity for attendees to easily get engaged in conversations with several different people. Of course the event has to be interesting to get people to attend in the first place.

My advice is to find an event that repeats several times a year that you feel comfortable at and keep going to it. Personally I think that weekly meetings only work for certain types of businesses. Going to the odd event and hoping to get lucky in finding a lead or good contact is increasingly unlikely.

Malcolm Says

I start from the premise that customers expectations are never unrealistic.  We may think they are but with the odd exceptions customer are reasonable and believe that their expectations are realistic.  The challenge for companies is to understand the specific expectations of their customers and ensure that where it makes business sense those needs are met. 

One of the myths is that meeting customer expectations or proving a better customer experience means spending lots of money.  In a lot of situations it costs very little or even nothing. It’s not untypical for me to make at least three or four recommendations to a client that have a high positive impact on customers at zero cost them.  (I have specific examples for anyone who is interested to know more).

The second major point that many companies miss is that improved customer experience leads to better customer retention. We’ve seen many different surveys that claim that 50% - 70% of customers leave due to how they have been treated by their supplier or their by staff.  I use this information to do a very simple ROI for clients to demonstrate the value of investing in improving customer experience.  In several cases the ROI based on improved customer retention was in excess of 50%.

There are a few articles on my web site that give a bit more background to my thinking and some example of what customers really care about rather than what we think they care about.   http://www.simpleplans.co.uk/7.HTML

It’s not about where they report but what they actually do that matters.

Marketing are the servants of Sales and the masters of business strategy.  Successfully pulling this off is often quite a challenge. I encourage clients to think that Sales own responsibility for selling and servicing all customers individually and Marketing are responsible for all customers collectively.

The issue is not the internal wrangling about metrics or organisational structures.  They are just red herrings and take our mind off the core issue. The real focus is Customers and how both Marketing and Sales work together to get and keep profitable customers.  

In a really Customer focused organisation all decisions are tested against the impact on customers before being implemented. Having this common touchstone significantly reduces internal “discussions” about organisation structures.

In some circumstances people just buy on price because the difference between the options is either invisible to them or they just don’t care. In other situations they may buy based on features and perceived benefits.

In most buying decisions, business or personal, neither of these are the first hurdle that has to be crossed. The first step is what I call the RET factor. It stands for Relationship, Expertise and Trust. Many buying decisions are made using a mix of these factors before price is even mentioned. For example I might buy my Life Insurance from Jerry because I’ve known him for years, he’s demonstrated his expertise on many occasions and I trust him. Another vendor is not going to get my business just by offering a lower price.

It’s therefore important to do as much as you can to improve your RET factor rather than just trying to sell features and benefits or just focusing on price. Consider if any sales/marketing activity or business process improves or damages your RET factor with customers.

Knowing what your customer cares about is obviously important. However customers care about far more than just features and benefits and the only way to find out what those things are is to ask them. I’d suggest using surveys and any customer touch point to collect information. What’s important to customer can be illogical, irrational and impossible to work out without asking them but it may be the crucial factor in a buying decision.

There is more information on this topic and some real customer examples on my web site.  www.simpleplans.co.uk

To me the root cause is incompatible objectives/metrics and lack of understanding about the other function and how it works. From this root cause springs factors like “poor” processes, internal politics and other disruptive actions. In my experience the problem is usually not limited to the relationship between Sales & Marketing.  Hands up who has a good relationship with Finance, Facilities, Customer Service, Manufacturing or HR?

The way forward starts with a simple customer focused business plan and set of objectives for the whole business. Rolling this through out the business with supporting plans and metrics will certainly be a major help. I’ve also used the buddy system to get two functions with a dysfunctional relationship to work together to produce their functional plans. This can be amazingly effective.

All of the above works but it takes time. Here are a few quick things that I’ve successfully used to get Sales to have a better relationship with Marketing and other functions.

1. Invite other functions to attend Sales and product training events.

2. Get representatives from Sales to attend and speak about the business at the staff meetings of other functions.

3. Create a balanced and simple service level agreement between Sales and Marketing.

4. Regularly communicate throughout the business the performance against the objectives and key metrics.

5. Ask other functions what can be done to improve the relationship with customers and act on appropriate findings.

6. Listen to customers and share the information between Sales and Marketing so that they can work together on appropriate actions. 

The issue for a number of businesses it that they have already cut the obvious areas of waste but because revenues are weak they need to cut further.  The problem is where and how to cut without damaging the business.

A simple way of evaluating the various options to reduce costs is required. My approach is to look across the business and ask one question. How does this action or task add value to customers? A high level first pass will identify things to cut, things not to cut, things to review and perhaps even some areas to invest more in.  The key point is that it provides a consistent way to make decisions and to explain those decisions to staff and customers. It’s also repeatable as circumstance change either positively or negatively. 

Ideally the results should also be assessed against the plans of the business before final decisions are taken. Unfortunately a surprisingly large number of businesses do not have good plans beyond revenue and profit objectives. Definitely another reason why knee jerk reactions take place.  

1. Honesty
2. Consistency
3. Professionalism
4. Excellent service
5. Great staff
Therefore any action that a company plans to take should be assessed against the impact that it would potentially have on any or all five of the above and features. If the action would result in a negative reaction simply don’t do it because that would damage trust. If you still decide to go ahead with a particular action HOW you plan to carry it out should then be assessed against the top 5 list.

The model for the most trustworthy retailer is always John Lewis and their supermarket chain Waitrose. Interestingly Waitrose are rarely the cheapest and in spite of the John Lewis promise to never be knowingly undersold some of their own products are quite expensive. But, since everyone trusts them on all 5 points price becomes much less relevant.

Malcolm says:

It could represent a big problem but I want to raise a “Not always” flag. What customers want is to be treated consistently. That can be consistently good or consistently bad.

The classic example of a highly successful company that consistently treats its customers “badly” compared to competitors is Ryanair. They are successful while customers know that they are not going to be treated well if anything goes wrong. They accept it as normal and of course like Ryanair prices and other aspects of their services.

Imagine what would happen if Ryanair suddenly started providing excellent customer service. Customer would immediately be thinking what’s going on, where is the catch? Customers want consistency. Of course there is nothing wrong with getting consistently better but make sure that you understand what it important to your customers before you do anything. If you don’t you might just find out that conventional wisdom is wrong.

I see a business plan as the touchstone to test all major business decisions and and to ultimately help build the objectives of everyone in the organisation.  It’s therefore more important for it to be simple and easy to communicate than it is to be precise and in detail.  I’m a firm believer in the one page plan and usually create it on a MindMap.  As the model cascades through the business the finer details are added as each part of the organisation builds their supporting plans.

I’d therefore say a key element of a good business plan is that creating it helps management teams discuss and agree plans and subsequently communicating the agreed document helps everyone track and implement those plans.