Posts Tagged ‘Sustainability’
Marketers look over their shoulders as recession hits
So we’re officially in a recession. That explains those paranoid marketers looking nervously over their shoulders. They know what’s coming.
Most businesses treat marketing as a discretionary expense, making it an easy target for budget cutters. It’s as if marketing is a luxury afforded only when times are flush. Less customer demand, less we can afford marketing, or so conventional thinking goes.
But really, can we ever afford not to market?
It’s natural to want to preserve cash during a downturn. I was an employer for nearly 14 years, so I’m sympathetic. But the tendency is to make deep cuts in marketing when sales head south. Companies often start by reducing or eliminating outside expenses, such as advertising, events, sponsorships, research. And when that’s not enough, they lay off marketing employees, sometimes the entire department.
The net effect of gutting marketing is to stifle generation of customer awareness, demand and retention just when these things are needed most. It’s a penny-wise, pound-foolish decision.
Management guru Peter Drucker contended, “There is only one valid definition of business purpose: to create a customer…Because its purpose is to create a customer, the business enterprise has two-and only these two-basic functions: marketing and innovation.”
Drucker believed “true marketing” starts with customers, including their demographics, realities, needs, values. “It does not ask, What do we want to sell,” Drucker writes. “It asks, What does the customer want to buy? It does not say, This is what our product or service does. It says, These are the satisfactions the customer looks for, values, and needs.”
Notice, he doesn’t equate marketing with branding, advertising and promotion, as it has come to be broadly perceived and practiced today. Above all else, the marketing function is about engaging, understanding and pleasing our customers. It involves deep listening to customer needs and then helping the business respond with innovative products and solutions that satisfy those needs better than the competition. A recession might curtail how much you spend on marketing, but the function remains essential under all economic conditions.
If you’re contemplating cuts to your marketing program, ask yourself this: Do I truly understand my customers, their needs, their values? And is my company converting that understanding into innovative products and services that my customers value over other choices in the marketplace?
If the answer is no on both accounts, then it’s time to restructure and refocus your marketing efforts so they perform their function. Sure, you may need to trim spending here and there in marketing. Taking an ax to it, however, is your worst move. You’ll only sever connections with customers when you can least afford to lose touch.
If you answer yes to the questions, pat yourself on the back. Your marketing is doing its job. So why mess with what’s working? Find ways to preserve the people and the processes you use to market. They are more valuable than ever as the recession tightens its grip and each customer becomes more precious.
Devotion to sustainability as a company doesn’t exempt you from the fundamental need to market in bad times as well as good. In fact, there’s never been a better time to distinguish your company from the competition and prove your relevance to customers. You’re part of the solution to what ails us. Time to let the world know!
What we still control in these uncertain times
Last night I offered the opening thoughts for a discussion group around sustainability. I took my inspiration from Al Gore, whom I heard speak last week at a political fundraiser in Portland. Gore asked the rhetorical question: This feels like the end of an era and the beginning of a new one, doesn’t it? The audience collectively nodded and murmured yes, yes, it does. It does feel like we’re in the midst of a very dramatic shift right now and are entering unchartered territory. Gore said what we were all thinking.
This helps explains why I’ve been feeling so much uncertainty lately, something I’m sure I share with many millions of others across our country and globe. Endings and beginnings are inevitably messy and halting. And this historic period we’re living through now is bound to be all of that and more. I told my fellow discussion group members that on a walk this weekend, I asked a therapist (my wife) what she would say to a client who’s struggling with uncertainty. She replied, without hesitating, “I would ask them what it is in their life they think they can control.”
Great question. I decided to answer it for myself. The exercise was eye-opening. Even as the economy threatens to collapse and news on climate change grows more ominous by the day, I found within a few minutes of pondering this therapist’s question there was much that remains within my control. Here’s what I jotted down:
my responses
my beliefs
my vision for the future
my stories
my awareness
my actions and behaviors
my intentions
my goals
my hopes
my creativity
my determination
my purchases
I could have kept adding to the list, but the point was made. Yes, we live in a time of great uncertainty and there’s so much outside of our control. More importantly, there’s still so much within our control. This is as true for businesses as it is for individuals. Now is an important moment for those who own, lead or manage businesses to ask what they still control and can accomplish even as customer spending slows and markets and economies contract. It’s easy to move into reaction mode, letting uncontrollable external forces dictate your every action and keep you working in fear of what lies ahead: loss of business income, potential layoffs, maybe even business closure.
Operating from a commitment to sustainability, I believe, provides the anchor in this perfect storm. It keeps our minds, decisions and actions rooted in care for what really matters: the health and welfare of the planet, our employees, customers, communities and other stakeholders. Sustainability is not a line item to be cut when times are tough. It’s a belief in how to conduct business. It’s also a response, vision, awareness, intention, goal, hope and set of actions. All of these things are within our control as businesses. And that’s something we can all hold onto as our world heaves and sighs into a new era.
Post-Katrina: Putting the human back in marketing
As I get ready for my summer vacation in the Northwest, my thoughts are in the South, specifically New Orleans and the Gulf Coast. That area is about to mark the third anniversary of Hurricane Katrina. No doubt residents fortunate enough to have homes and jobs and politicians and government officials charged with the region’s recovery will cite the many signs of progress. Others, with equal claim, will point to the vast stretches that have yet to recover, looking virtually as they did when the floodwaters receded.
My reflection is of a different sort. I only experienced the storm and its catastrophic aftermath through the media. A year after Katrina hit, I traveled along the Gulf Coast and into New Orleans. I needed to see with my own eyes what had happened. I returned to New Orleans a few months later as part of a volunteer crew that gutted and cleaned homes for a week. Needless to say, what I saw with my own eyes has left a lasting impression.
I realize now that Katrina is as responsible as anything for the shift I made in my work. I had spent 20 years in high tech marketing and was running the PR and advertising agency I co-founded in 1993 when all hell broke loose in New Orleans and the Gulf Coast. The storm and a tragically flawed response at all levels of government laid bare for the entire world to see the outrageous inequities and injustices that remain in our land of the free and home of the brave.
By coincidence, I departed my previous business and the high tech industry a year after Katrina hit. I had decided I needed to shift what I knew how to do — branding, marketing, communications — in support of businesses and organizations whose values and actions are making the world a better place. When I formed a new firm to work at the crossroads of sustainability and marketing, I wasn’t seeing sustainability through the single lens of saving the environment. As much as we humans have disregarded and damaged our natural world, we have caused no less harm to each other. Katrina was simply the most recent evidence.
Efforts to create a sustainable future must treat the Earth and all of its inhabitants as one. Sustainability isn’t saving the old growth in the Pacific Northwest forests and ignoring the rights of all humans to have their basic needs met and to live in peace. By this standard, green marketing falls short. Its preoccupation with promoting eco-friendly products is often little more than dressing up unsustainable consumption in a different color. Even more significantly, green marketing doesn’t go far enough to address the broader human and social dimensions of sustainability. If you’re a retailer touting your green product lines while paying employees low wages and no benefits, you fail the sustainability test.
Management guru Peter Drucker said the function of marketing is to create and keep a customer. In this post-Katrina world, maybe it’s worth remembering that customers are humans first. Forget that, and one day marketers will have no customers to keep.
Why marketing dashboards don’t measure up
I get invitations to attend workshops all the time. Usually, I gloss over them. But I stopped on one the other day called “Marketing Metrics and Dashboards 2.0.” Not exactly a topic I’ve been dying to learn about. But it got me thinking: There must be a business opportunity for someone willing and able to show how best to integrate “triple bottom line” metrics into marketing.
Marketing dashboards have come into vogue in recent years, although they are not in broad use because they are complex and expensive to create and maintain. They seem to have found a niche primarily among large companies whose marketing departments are under scrutiny by CEOs and CFOs to demonstrate their expenditures are adding to the bottom line — the profit bottom line, that is. The marketing firm that is leading the workshop focuses on helping its clients “determine the financial return from marketing investments.” Their tagline is: “Measure What You Should, Not Just What You Can.”
That begs the question: What “should” marketers be measuring? In recent years, marketers have been under increasing pressure to prove a positive financial impact from their programs. Dashboards are touted as one mechanism for doing so. I’m all for marketing carrying its weight financially. I also believe the possibilities, if not the responsibilities, of marketing go well beyond its impact on sales and profits.
Companies committed to sustainable business practices recognize their success can’t be achieved simply by maximizing profits. They understand that profits gained at the expense of the environment or stakeholders, such as employees, suppliers and communities, are to be avoided and indeed are not a measurement of success at all. The triple-bottom-line approach of balancing profits with people and planet acts as a check on ill-gotten financial returns.
Which brings us back to marketing measurements. I would expect companies professing a commitment to the environment and the fair treatment of all stakeholders would also ensure this commitment is reflected in how they conduct and evaluate marketing. If marketing is held to a standard of financial ROI only — even as difficult as that is to measure — there will be no incentive for marketers to sweat the social and environmental impacts (positive or negative) of their work.
Marketers can perform a vital sustainability function by understanding, monitoring and influencing how their employers or clients create and manage their supply chains, conduct fair trade practices, manufacture their products, dispose of their waste, deliver their services and encourage recycling and reuse. This should be what it means to take responsibility for what you’re marketing.
Companies fixated on the financial bottom line are telling marketers to ignore this function and putting them in position to build customer demand for unsustainable products and services. But marketers are not simply victims here. They have a choice: keep playing the game, try changing the rules in favor of sustainability or look for a new employer or client.
A marketing program devoted to sustainability would adopt and track metrics that demonstrate how and how well marketing is contributing to the financial health of its employer or client, the well-being of people the company interacts with and the protection of the environment. I know this is asking a tremendous amount from marketers, not least of which is to define the non-financial metrics to be used.
At this point, I’d be happy getting more people in business to agree the value of marketing shouldn’t be measured in dollars and cents alone. Anybody building a triple-bottom-line dashboard?