Sustainable profitable growth is tough to achieve under any circumstances. It is even harder in the current environment. With a few exceptions, marketers in every industry are finding the going really tough with customer spends waning, prices spiraling and budgets evaporating. Yet this is also a unique opportunity. The behavior of marketers over the next 3-4 years could very well determine the future of marketing in their organizations. If marketers prove instrumental in eking out organic growth despite their constraints, they will become champions of customer-centricity and long-term change in the fortunes of their company. So what are the secrets of organic growth success that we have discovered working with companies such as P&G, Microsoft, GE, IBM and others?:
- There are no secrets - Organic growth is the result of disciplined application of proven fundamental approaches - understanding your customer’s needs and pains, developing a compelling value proposition, innovating to deliver a consistently superior experience and executing with great consistency and alignment. P&G went back to their knitting under AG Lafley with simple fundamentals like “The Customer is Boss” and brand-led growth. None of these are revolutionary concepts. It is in their application that many companies falter.
- Less is actually more - Most companies struggle with the counter-intuitive thought that focusing on a smaller set of customers can actually lead to higher sales. It does! Market segmentation, especially needs-based segmentation, helps companies focus their product/solution development, improves productivity and effectiveness of the sales force, brings tremendous clarity and efficiency to the marketing efforts and is generally a more defensible strategy than trying to address the entire market. GE Money has been able to turnaround businesses with swings of over 50% in profitability using segmentation. Make choices (on target segments) and watch your expenses shrink while your performance improves.
- Internal before external - Perhaps the biggest lesson for me has been the need for marketing internally before externally. We need a value proposition for internal stakeholders as much as we do for customers. It is usually a good idea to launch an internal marketing campaign BEFORE a campaign targeting customers. Our customer’s will never experience the promised value, if our own team does not understand it and have bought into it. From senior managers to the call center operator - everyone has to get it and be inspired by the vision that we are crafting for our customers. So before you spend the next $ on your campaign, think about how you can spend resources in preparing your organization in delivering whatever you are promising to your customers...and your customers will feel the difference.
- Customer knowledge is a competitive advantage - In these days of commodity-like situations in many industries, deep knowledge of the customer can be a true competitive advantage. Insights such as the one that Michelin had about driver’s concern with family security or the one that Budweiser had about beer-drinker’s need for social bonding have helped these marketers drive decades of growth.
- Focus on value, not price - It is easy to succumb to the pressures of cutting price, especially when your competitors are slashing theirs. However the important thing is to remember that not all customers become price-conscious during recessionary times. But they do become more value-conscious. This means we have to try harder to show value for the prices we are charging. Whether it is in enhanced packaging, extra convenience or personalized service - customers have to truly experience the uniqueness of your offering to justify paying the price.
- Manage by Initiative - Budgets are under pressure and likely to be so for a while. The typical response by most is to reduce support for every market initiative. The usual result is poor performance on all initiatives. The right approach is to cut lower priority initiatives and concentrate on a few. If you have built your budget by initiative, this should be relatively easy to do.
- What is worth doing is worth doing well - And last but not the least, insure that you strive for excellence in your efforts. Taking short-cuts and cutting corners seems like the right approach now but often leads to disastrous outcomes. Invest in learning, use your resources smartly and focus on the details of your execution. Customers will feel the difference.
So there you have it. 7 key lessons that have stood the test of time and survived recessions and bull-runs. Wish you all the best on your journey.