Samantha Reid Aviña | Gallery Design Studio Editor + Copywriter
Companies everywhere are adjusting to a new normal. Regardless of current unclear economic and social conditions, products, and services still need to be sold. Even if this year’s marketing crop is leaner than normal, we have to plant the seeds to nurture future relationships.
How do we employ traditional six- or twelve-month sales cycle budgets with an unpredictable economy?
Part of that answer comes from Nitin Nohria, the Dean of Harvard Business School. Along with other researchers, Dean Nohria undertook a “yearlong project to analyze strategy selection and corporate performance” during economic downturns. They published their analysis of nearly 5,000 companies in the Harvard Business Review (HBR).
The study found that company-wide budget cuts had longer-lasting repercussions than you might expect. In particular, companies who did not invest in marketing often failed to keep up with their competition when more certain economic times returned. However, unpredictable economics is not a problem that can be easily solved. Some organizations that “boldly invest[ed]” still struggled to regain their foothold once the market returned. So how do you design a communications plan that cultivates leads now even though those leads may yield returns later or over a longer period than usual?
Based on the data, researchers identified four types of approaches that served companies during unpredictable economic conditions.
1. A prevention-focused approach is described as a “defensive” approach, largely focused on minimizing losses and mitigating risks. Although this defensive response is the immediate reaction of many business leaders, engaging this approach risks failing to engage in critical steps of the sales cycle to rescue and maintain current clients. Prevention-focus exposes your entire organization to a loss-avoidance mindset, which stifles creativity and innovation.
Prevention-focus is like weeding a crop without bothering to water or fertilize.
2. Promotion-focused approach, you’re taking steps that invest in the company’s promotion significantly more than your competition. Marketing with promotion-focus risks miscommunicating with your audience and looking out of touch. This approach can damage your entry into the sales cycle and make maintenance more challenging. Promotion-focus can lead to company-wide naivete, which is bad business and bad for business.
Promotion-focus would be like advertising for this year’s strawberry crop during an unprecedented E. Coli outbreak caused by strawberries.
3. A pragmatic approach would incorporate a focus on both prevention and promotion with a concentration on risk avoidance. Investments are limited and focused on maintaining current customer relationships without attention to cultivating new ones. Pragmatic approaches are not enough to lock in an economic resurgence. Without clarity, the pragmatic approach lacks the necessary vision to be as effective as possible.
A pragmatic approach would be like harvesting a great crop but not planting seeds for the next season, which would be short-sighted and wasteful.
4. Lastly, a progressive approach includes similar steps taken in a pragmatic approach, but the approach is designed to balance managing limitations against investing and expanding where appropriate. Out of the four strategies, the progressive approach was the most likely to keep a company competitive during uncertain times and after.
Companies that successfully implemented the progressive approach during previous uncertain economies include Staples and Target. Both navigated economic downturns to come out ahead of the game. The HBR study showed that the most successful companies post-uncertain times were those that “focus[ed] simultaneously on increasing operational efficiency, developing new markets, and enlarging their asset bases”. In other words, strategies designed to serve customers during uncertain times were better equipped to sell to them later.
Under a progressive strategy this year’s harvest would happen simultaneously with planting and planning for future seasons.
The research shows that the companies who do best after an economic downturn are those who managed to balance their progressive approach with conscientious budget management and strategic investments.
Whichever path you determine best serves your company goals, the bottom line is that you must choose a path. Inaction and indecision can be dangerous anchors during unpredictable conditions, leaving your team with too little action to take too late. Consumers seek companies that offer security and trustworthiness, now more than ever. A reliable creative partner provides the support you need to launch thoughtful, proactive communications strategies that enable you to feed your ongoing relationships and plant seeds for new ones.
We help B2B marketing teams, in software, financial services, and healthcare, with their ongoing communication design needs. Conveying complex information clearly, concisely and in a visually engaging way.
ABOUT THE WRITER
Samantha is a copywriter at Gallery Design Studio. Samantha is passionate about using precise and evocative messaging to connect with clients. She has written for journals, online publications, and blogs.