Global recession + high inflation = a different marketing approach
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Wandering the massive floor at annual technology and innovation conference VivaTech in Paris two weeks ago required a self-imposed cognitive dissonance; a healthy dose of denial.
VivaTech always feels like one of the biggest events of its kind. The 2022 version - for many the first return to super-large scale face-to-face selling - was typically impressive.
Indeed visitors (certainly this one, in attendance with teams - now friends - from our incredible partners SAP and SAP.iO) seemed to feel the pure buzz of opportunity with every inch of the Porte de Versailles expo; a venue equal to the size of 32 football pitches.
The 91,000 attendees from more than 30 countries returning to their offices and teams this week will have told bosses of the brilliant conversations they had. They’ll be writing up positive forecasts of the revenue they’ll believe they can eventually attribute to VivaTech.
But what was missing from the hot conversations and cool demos was a sense of the short and medium term economic reality faced by almost all consumers and businesses.
I heard nobody mention the recession.
Plenty of panels and interviews featuring some of tech’s true giants focused on important issues such as diversity, data ownership, security and skills.
Elsewhere there was much chatter about the Metaverse, NFTs and the blockchain.
Demos were dominated by drones, driverless cars and aspirational (unnecessary) use cases for VR and AR.
But little was said about the squeeze our customers are about to face or the increased support or value we should be creating for them.
Elsewhere this week, the advertising glitterati including some of the world’s most loved and listened to marketers, brands and agencies, landed on the southern shores of France for the return of the Cannes Lions Festival of Creativity.
Not just marketers and brands mind. Also present to perform or speak on panels were American rap stars Megan Thee Stallion, Kendrick Lamar and Post Malone. DJ and record producer Fatboy Slim, actor Elizabeth Olsen, businesswoman and socialite Paris Hilton and singer-songwriter Dua Lipa were also there.
The return of the awards, beach parties and networking events fuelled by superlative rosé was welcomed by the marketing industry after last year’s event was cancelled.
Jon Evans, host of the Uncensored CMO podcast, told most of us in a single Tweet what was already obvious about a missing presence on the golden beaches of Cannes.
With global recession almost certain - and in the UK and elsewhere, occurring alongside high inflation - consumers are feeling far from celebratory.
Even before the price of everyday goods and fuel rise further - your risk averse and nervous customers may not yet be at their lowest ebb. On the day I wrote this, news broke in the UK that GfK’s long-running Consumer Confidence Index dropped to a new record low for a second successive month.
Look. Marketing should celebrate superb work and creativity. The tech industry absolutely should be forward looking. We do have a responsibility to set out a vibrant innovation roadmap that keeps consumers excited and investors ready to take chances.
But we should all be just as ready to speak the truth we see unfolding. The next year, maybe two, is going to be hard.
So far, the only public mention of the recession I’ve seen from a notable marketer is the recent article by the Sage of Tasmania, Mark Ritson, with his playbook for recession marketing published in Marketing Week.
Elsewhere, understandably, most are too nervous to use the ‘R’ word for fear of triggering the gloom of which they speak.
But we’re marketers. Without getting down on the ground next to our customers with the readiness to feel what they feel, what else do we offer?
And besides - we love to talk of innovation…we should remain hyper-aware that what will be a challenging time for everyone will bring huge opportunities for those with relevant offers.
Flexibility, trust, reassurance and control will be among the need-states we as marketers and technologies need to provide to end-users, whether directly or by selling to businesses.
So ask yourself, what services are going to feel the most relevant and helpful to consumers feeling the tightening pinch and how do we best take such an offer to market in such a climate?
The need for first-party data with all the buy-in and trust that comes with it is vital. So too, is true and meaningful customer engagement - empathetic engagement that feels like we’re ready to empower and listen to consumers.
And among this stark climate, we still need to lean into growth. With a subset of most brands’ customers no longer able to afford their products or services, the need to acquire new ones becomes critical. Few businesses will be shrewd enough to increase their brand investment at such a worrying time but as always, they’ll be the ones that exit the recession stronger than their competitors. Indeed, those who fixate solely on hitting each month’s target may not actually make it out the other side.
Other brands that will emerge victorious will be those that find new, smart, ways to acquire high value customers without breaking the bank.
If you can augment that strategy with a channel that drives more visibility and insight into the behaviours of those customers and can help you identify and target others like them, well - you’ll be as close to recession-proof as any brand out there.
This was what Bloom & Wild did when the Covid-19 pandemic broke. One of Europe’s largest online florists, the marketing team knew that the lifetime value of customers derived from referral marketing exceeded the value of those from both paid search and paid social. The business had so much confidence in its advocacy marketing program as a growth driver that when it was forced to turn off other marketing tactics in May 2020 after the pandemic prompted the first lockdown, referral marketing was the only channel it left running,
The florist grew its UK referrals by 800%, despite promoting it at fewer points in the customer journey than it had previously; the business had already racked up the kind of referral results across its eight country markets that gave it confidence in this sole channel of advocacy to help navigate the new crisis.
Bloom & Wild has generated close to £17 million in sales through customer recommendations alone since launching a referral program in 2014. More than 60% of referrals made by its customers convert into new customers. And of those new customers, 35% go on to refer the brand to their friends and family.
Businesses need not sleepwalk into the tough times ahead, scared to speak out for fear of spooking anyone. We all know what’s coming. Thankfully marketing has evolved enough to be able to accommodate the coming crisis. And the one after, and the one after that.
The ‘recession marketing’ status quo of ‘retrench and hope’ is no longer the only available response. We can be positive, stay innovative and continue to generate value for our businesses and our customers alike.
Speak to Mention Me to learn how advocacy as a marketing channel could work for your business.