Frugality first


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Experts say such cost-cutting tactics may be necessary to enable companies to run more efficiently, but real success will come from marketers being smarter and more strategic in their operations. “First and foremost, you need to bring your costs into alignment with your revenue—and you might need to cut back if your costs are out of alignment,” said Naylor Gray, director of global marketing at Frost & Sullivan, a research and consulting firm that specializes in corporate growth strategies. “Companies need to focus on opportunities for growth. There will be a recovery. What people do now will impact how quickly they recover and grow out of this recession.” Gray said marketers need to review the costs of their existing programs, implement new tactics such as social media and mine their customer databases. “Now is a really good time to look at segmentation within your data- base and use market research to create value for your segments,” he said. “The most important thing is to focus on ROI and focus on the things that will make the company money, such as sales lead-generation programs, webinars and white papers.” Mark Wilson, VP-corporate marketing at Sybase Inc., said marketing becomes even more important to companies during a recession. “A lot of companies think they need to cut back expenses because we're in a recession, and they will put marketing in a discretionary spending area and cut back. As a result of that, they will go dark for their customer base. It is the worst thing you can do, particularly during a bad time,” he said. “What marketers need to do is to manage their budgets effectively, get their name into the marketplace using new media or social media, and be smart about spending their money without going dark.” Another important strategy is promoting products that will help companies save money and be more efficient during a recession, Wilson said. For example, Sybase has increased its advertising for risk analytics and data analytics products aimed at financial institutions. Martyn Etherington, VP-marketing at Tektronix Inc., which manufactures test and measurement equipment for communications networks, said the recession will force marketers to be smarter and more efficient. “I believe this recession will be the best thing short and long term for marketers, period,” he said. “We will emerge on the other side much leaner, much more relevant and certainly much more customer-savvy. It will make us acutely more accountable and drive relevancy through our organizations.” Etherington said marketers need to focus on being relevant in three core areas: the customer, the sales channel and the overall performance of the company. “We need to do a lot more with a lot less,” he said. “We also have to ensure that we explore every possible area of customer revenue and optimize those, while being very, very efficient from a marketing perspective.” For example, Tektronix has consolidated Asia and Japan into one marketing organization (previously they were separate); implemented a system of visual mapping tools to get better efficiencies out of its business processes; and increased its focus on “voice of the customer” to deliver more relevant products and services to help customers through the recession. “We have an absolute focus on helping our existing customers in this downturn and providing innovation in a crisis,” Etherington said. “They have the same problems we do—controlling expenses, improving time to market and increasing revenues. If we can help them do that, they will emerge stronger on the other side.” In response to the recession, marketers are scrutinizing every area of their marketing operations to make sure they are being as efficient as possible. “We're looking across all of our various marketing processes to see where we can eliminate redundancies between our business divisions, our operating companies and corporate,” said Michael Mac Donald, president-global accounts and marketing operations at Xerox Corp. “So we are looking at things like our product launch processes, our collateral processes and our Internet processes to see where we can eliminate handoffs, make it a more seamless process and get more end-to-end accountability for what happens in a given group.” Marketers are also putting more focus on marketing ROI during the recession. “Like most companies, we are looking for ways to be as efficient as possible in terms of cost management, and we are taking a look at all of the activities we do to make sure they are driving the needed type of return in this economic environment,” said Mark Gambill, VP-CMO of technology company CDW Corp. For example, the company is moving away from brand awareness and consideration campaigns to more demand generation programs, and is transitioning some print materials, such as catalogs, to electronic versions. CDW is also outsourcing more work, such as using a company in China for intensive data input and working with more freelancers on projects. M
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