Headlines are flowing on the front pages of all newspapers regarding unprecedented run on investment banking. “People finally are realizing that we are probably in the worst financial crisis since the Depression,” the Atlanta Journal-Constitution quotes Alfred Goldman, chief strategist for Wachovia Securities. “We are in a period of excessive fear.”
No doubt. Regarding the issue of fear.
Solving the financial woes of this country is beyond the scope of this newsletter, but what exactly can marketers do to not feed into the “fear frenzy” gripping the markets and build constructive programs?
We polled several gifted marketing minds on exactly this subject. The question we asked, “What can you do as a marketer to overcome the fear objections of a prospect?” Some themes emerged.
Separate facts from emotion.
“Facts support cautious or prudent or conservative thinking, but if it has devolved into fear it is emotional and nothing can counter it. We’d tell clients to pull out and sleep well. (But we’d also tell them they are typically going to lose money doing that.)”, Ken Yarbrough, SunTrust Banks. The facts are that we are in a focused financial crisis – the investment and capital business. Granted, it is certainly affecting all Americans to some extent, but are we really in the crisis described by Mr. Goldman?
• Inflation: 5.3% in latest month (contrast that with an average rate of +11% from 1979 – 1981)
• Interest rates: current prime rate is around 5% (as opposed to a peak of 20% in 1980)
• Employment: unemployment just went above 6% (versus a post-World War II high of almost 11% in 1982)
Most people are still working. Most businesses are still producing products and services. There is still a viable market for nearly all companies.
Mark Limmer, a Certified Financial Planner, offers this analogy. “Great physicians are good diagnosticians with good bed side manners. The patient takes the pills not because the physician is smart – that’s a given – but that he/she understands them. The same is true of marketing most anything. Fear melts away when they understand and feel understood.”
Be more visible. Do more. Be flexible.
Consumers are shaped by the media. There are a plethora of media outlets, the distinction between true journalism and commentary (expert or otherwise) continues to blur and there is a crush to be the first to have “breaking news” on the next turn in the story. The point for marketers: media impressions still count. Good PR people preach this often: you can’t control what the press says, but if you don’t respond with your own story, then you can count on only the other side being heard by your prospects and customers.
Doing nothing or putting marketing “on hold” is in fact an action – one that will likely have negative long-term consequences. Take it from marketing guru, Alf Nucifora: “I tell them that now more than ever they need smart, experienced marketing service support in order to survive the current crisis and capture market share at a time when competitors are vulnerable.”
“Be flexible – be willing to look at how the economy is impacting not just your business, but your customers and be willing to consider new strategies to reach them,” Deborah Stone, President, Pineapple Public Relations.
Messages should focus on stability, performance and value. And, yes price does matter.
With confidence and credibility being slayed daily in headlines, the ability to deliver has become more fundamental. Trey Bailey, Vice President, Operations for SteelCo Buildings: “I have to let people know that my product is “worth” the investment. I think now is the time to “prove” to the consumer that they need what I’ve got.”
From Kurt Matsumoto of Kukui’ula Development, “We share information about our company so they understand the strength of the balance sheet. We also speak to the history of the company and previous performance. We have finally received permits to start construction so very shortly we can tour prospects to the site and they will see us moving forward. Demonstrating the commitment.”
Sales goals and profit margins should be re-examined in this climate. Because consumers are being cautious and because there are so many “fire sales”, pricing is forced to be more elastic. But, value will win every time.
There are no quick fixes. Back to boring fundamentals and long-term solutions.
Increasingly our economy is going through faster, more turbulent cycles. That fights conventional wisdom and fundamental business planning. Yet, great companies and brands stick to those fundamentals. They have a vision for what they intend to be. They put a long-range plan in place, are willing to “stay the course”, invest prudently and take a building blocks approach to reach their goals. Typically, successful companies do not over react to short-term market conditions. It’s true on Wall Street and true in business. The businesses that overplay to take advantage of short-term profits are probably the ones that are have the biggest troubles in a market down-turn.
More from Mr. Matsumoto: “While the folks that look at us certainly have the money to purchase , its almost like spending is out of style for right now. We cannot make them feel compelled to buy or lose their spot. They come in the door with the attitude that they know they can wait another year and we will have the same inventory available. So for us, we have been focusing on relationship. Spending lots of time and money on making them feel comfortable with us.”
Developers, like other businesses, will have to project longer-term payouts and completions. Parceling, developing and marketing smaller, more limited offerings can and are having positive results in current market conditions.
“The human tendency is to forget bad things, and when people are reminded what has been overcome before, it helps subdue their current fears,” Mark Browning, President, TRIPInfo.com.
Suspending marketing programs is flat out the wrong thing to do.
If your brand proposition (positioning, targeting, messaging, value points) worked in good times, it should work in the bad times as well. Walking away from marketing tells your staff and customers: you are lacking in confidence; do not have a viable business plan; are making it easier for competitors to take market share from your company; and accurate measures or projection of ROI about marketing is missing.
Marketplace fears are presenting you an opportunity.
We will continue this discussion in the next issue with some insights on what you can do to build “zealots” in this tough business climate. All our interviewees agreed that there are real opportunities to build brands in this “fear” environment by focusing on existing clientele.
We welcome your thoughts on the “fear factor” in the marketplace.
What do you think?