Panicky markets. Dazed consumers. Shifting distribution. Eroding margins. Disappearing budgets. An atomized media environment. Established brands used to pulling predictable business levers are likely to be in for a rude awakening in 2009, unless they substantially reinvent their marketing approaches. To survive in this new-world disorder, brands will have to dig deeper, move faster and execute perfectly the first time, every time. Just like a start-up.
Start-ups are unique. They tackle their challenges with every imaginable limitation, and because of those limitations, the stakes couldn't be higher. Every move a start-up makes, no matter how well it is funded, is approached as if it were a "bet-the-company" initiative -- because more often than not, it is. As we enter 2009, with companies such as GM and Citigroup on the brink, with venerable 250-year-old brands such as Waterford Wedgwood filing for bankruptcy and 73,000 retail doors projected to be shuttered by the end of the second quarter, some of the answers ironically seem to lie in strategies of the most risky ventures, not in the tried-and-true.
That said, here are some smart start-up strategies to consider:
1. Tell consumers why your product is important.
Start-ups can't afford to be cute or oblique. High-impact and relevant benefit/feature and feature/benefit marketing is critical. Effective advertising is going to require a different kind of creativity for the foreseeable future. Consumers aren't in the mood to be amused; they want to be reassured. Empathy is preferable to edgy when you're talking to consumers who have no idea whether their last paycheck is the one they just cashed. Which is why Hyundai's current "Assurance" campaign seems so on-target. When you're asking for their money, make the case and make consumers care. Just like a start-up does when it launches an amazing product no one has ever heard of and doesn't think he or she needs.
2. Sweat the small stuff to maximize the customer experience.
Like a start-up, there is no tolerance for executional inconsistency in a down market. That's because every purchase decision, large and small, is highly scrutinized with consumers looking for any excuse to walk away. In this environment, seemingly basic activities such as in-store merchandising, package design, website navigation, customer service and support, and return policies can be sharpened to become key differentiators and real revenue drivers. Delivering consistently excellent execution across the entire brand experience doesn't necessarily cost more. It requires laser focus, just like you see in every Apple Store and Costco. There's no faster, more efficient way to stimulate repeat purchases, create brand loyalty and perhaps even gain category leadership than stepping up the quality of your execution.
3. Create leverage with every move.
Even in a viral marketing environment where gaining awareness couldn't be more cost-efficient, few start-ups have the resources to directly advertise and market to their consumers at an effective ROI. Which is why every marketing dollar a start-up spends is done so with an eye to the leverage it creates in the sales channel, on the retail floor and among vendors and influencers such as trade and general media. Complicated breakthrough products such as DirecTV and Toyota Prius would have fallen flat without extensive channel marketing and enthusiastic retailer adoption. Think about who really drives sales of your products. Is it really the consumer or are there other audiences that are even more influential?
In a resource-constrained environment, every audience is critical and must be marketed to as valued customers, especially employees. Employees, like everyone else, are freaked-out consumers and need even more communication and contact with your brand than other constituencies. That's because it is impossible to market with confidence when your people are not confident.
|ABOUT THE AUTHOR|
David Ellis is president-CEO of VEO Group, a brand development consultancy based in Studio City, Calif.
4. Be bold. Be fearless.
Every company has lists of innovations, upgrades and new products that are in the "when we get around to it" pipeline. Now is the time to make those things happen. Some of the most innovative companies and products have emerged out of the ashes of economic disaster. Hewlett-Packard, Disney and Microsoft were formed during times of economic instability and weakness. Apple conceived and launched iTunes during the dot-com crash while the rest of Silicon Valley was wringing its hands wondering what happened to their stock options. Right now, MyShape, an online fashion start-up that sells women's apparel by body shape, not size, has strong momentum and growing sales, despite the overwhelming challenges to the retail sector.
It's also an opportune time to grab leadership and market share. If you have the resources, now is a good time to use them. During the Depression, Procter & Gamble, Kellogg's and Chevrolet took advantage of their respective competitors' timidity by cutting against the grain and outspending them. As a result, P&G conquered the household. Kellogg's knocked Post off the breakfast table and Chevrolet put a big dent in Ford and became America's Car.
5. Embrace the inevitable.
Unlike the 2000 dot-com bust, which was primarily contained to one sector, the coming Depression 2.0 will cut broadly across every business. Rest assured, the company you marketed last year will have little relationship to the company it will become once we emerge out the other side. The sooner you face the reality that you're going to need to innovate your way out of this mess, the faster you will capitalize on the opportunities that lie ahead.