Money Matters

Most people don’t pay attention to how much money has been spent on a brand before purchasing something. One might notice the changing ad campaigns at bus stops or billboards or comment on which companies choose to spend millions in a Superbowl football ad. At least, until recently.

In today’s financial climate, we’re all more aware of how much a company spends – on anything from golden parachutes to advertising budgets. So when I read about Pepsi’s new brand campaign and its 1.2 billion dollar budget, I consciously thought - I want a Coke. I mean, how could any company knowingly choose to invest that much money in changing what is already a well-known brand? That sort of money seems wasteful in today’s economy. While they’re a world-wide brand and this is a three year budget, it still reeks of big corporate money and not real inventiveness or creativity – something the brand desperately needs.

And its not just a one-off, single example of being aware of a company’s budget decisions. People want to know about a company’s fiscal responsibility – in all areas.



This ad focuses on the striking disparity between really caring about one’s customers by focusing on solving problems or only caring about the customer’s dollar, as ‘PC’ seems to here. In today’s fiscal atmosphere, there is a need to focus on financials and how companies are choosing to spend their money. One has to be transparent in business and not just in the products and services but also, surprisingly, in promotional efforts.

Money matters, along with everything else.

Tales of passion

I recently discovered the TED conference: an annual event that brings together some of the world's greatest thinkers and doers, and challenges them to "give the talk of their lives" — in only 18 minutes.

I also discovered Isabel Allende, novelist and memoirist and author of the enormously successful "The House of Spirits". Allende gives a wonderfully funny, moving and very inspiring talk that all women should hear.

Enjoy!

Marketing during the recession.

I think we can call it official: the economy is a stumbling, faltering mess.

The growing rumbling of the recessional snowball can be heard loud and clear on both sides of the Atlantic now, and there are no signs that it’s going to miraculously disappear any time soon. In fact, this may be one of the most fundamental marco-economical shifts in many decades, and I can’t help but think that the magnitude of the possible changes makes us all freeze like rabbits in a car’s headlights. We’re not quite sure where it’s going and we have no idea how it will end.

“Recession” is a word that also causes marketeers sleepless nights. Suddenly, nothing across any of the four “Ps” is the way it was yesterday. Consumers have a different mindset about spending. Price elasticity curves change. Managing the company balance sheet takes priority above all else (especially marketing), and as marketeers we’re expected to do much more with much, much less.

Of course a recession affects different market sectors in different ways and to different levels, so a one-approach-fits-all for recessional marketing doesn’t exist. However, here are some key truths that hold true for all brands during a recession:

THE CONSUMER:
Economical uncertainty leads to uncertainty on a personal level. Consumers worry about their jobs, their household budgets, their savings. They tend to cut back on discretionary spending, postpone larger purchases, trade down or buy less. As a recent Harvard Business School article said: “Yesterday’s must-have features become today’s can-live-withouts”.

Seth Godin said: “When times are good, buying things is a sport. It's a reward. The story we tell ourselves is that we deserve it, that we want it and why not? When the mass psychology changes and times are seen as not so good, the story we tell ourselves changes as well.”
The answer? Address the consumer’s changing priorities and needs in your communication. Try to strengthen the relationship with your customer by offering great price/quality, stellar customer service and keep your brand top-of-mind with the right messages and communication efforts.

PRODUCT:
Gimmicks are out. Quality is in. Focus on your product’s reliability and performance. Reassure your consumers that you will continue to focus on quality. Products that address the new realities of the consumer – both on a product level and a communication level can do well in these uncertain times.

PRICE:
It goes without saying that most consumers become more price conscious during a recession. I’m not saying change your pricing strategy completely, but in the current economic climate, price elasticity will decrease in most sectors and consumers are more likely to shop around for the best deals. Offer consumers temporary price promotions, bulk buying discounts or bundled product packages to appeal to a value & budget conscious mind-set.

PLACE:
Don’t forget that your channels suffer too during hard times. It may prove impossible to retain your channel breadth & depth, but it would be wise to evaluate partnerships and support your strongest partners. Training them on your products and providing them with the support to promote your products will lead to a stronger relationship and will see you take market-share at a time when everyone else is cutting back!

PROMOTION:
“Successful companies do not abandon their marketing strategies in a recession; they adapt them” says Harvard Business School.

One of the most forgotten advantages of a recession is the fact that marketers have more bargaining power with media outlets. With marketing spend drastically cut, spots open up for the taking at reduced prices – paradise for astute negotiators!

Although marketing is about creating a long-term sustainable advantage, promotion during economically difficult times can focus on increasing short-term sales too. Instead of campaigns focusing on corporate image, now’s the time to invest in cross selling and up selling tactics, point-of-sale actions, direct marketing activities or channel promotions to increase revenue.

As I wrap up this article, the news has just come in that Tokyo’s NIKKEI index fell to its lowest point in 21 years. These uncertain times are the stuff nightmares are made of, for consumers and marketers alike.

The best advice I’ve had to date? Don’t panic. Stay focused. Spend frugally. Be ready to adapt swiftly.

My Financial Planner Should Be Famous

A number of years ago, I turned to a financial planner when I was a waitress. With so much cash on hand, I knew I should do something with my money but was unsure what. With a degree in English and a passion for words, not numbers, I knew that I would never be able to understand or research a topic as thoroughly as my money deserved. I turned to someone who would be able to answer my questions and speak to me openly and honestly – a financial planner with Edward Jones.

My actions are in line with The National Center for Women and Retirement Research (NCWRR) statement that women spend more time researching their investment choices than men do. This prevents women from chasing "hot" tips and trading on whims—behavior that tends to weaken men's portfolios.

In truth, if you go by numbers alone, women are better investors. In a University of California Davis 1997 study, they found that women's portfolios gained 1.4 percent more than men's portfolios. And men trade 45 percent more often than women do because men tend to be overconfident. By trading more often (and without enough research), men reduce their net returns. By trading less often, women get better returns and also save on transaction costs and capital gains tax.

The financial market is no different than any other sector in that women still like lots of information. Women seek out financial data and information online, and are more apt to seek financial advice from an advisor. With today’s current state of affairs and the headlines reporting dire financial news, it should come as no surprise that I again turn to my financial advisor. My accounts are a few zeros short of being important to anyone other than myself, but I can’t help but wonder what to do? Is there action for me to take?

My financial advisor’s reaction to my uncertainty and fear is so good, I have to quote him, “I can appreciate your concerns. While we are in a downturn in the economy and there are many issues with the credit markets, the future is much brighter than the media leads us to believe. I will be happy to discuss with you at your convenience. The best thing to do right now is sit tight, remain diversified, be patient and invest monthly when possible. I sincerely appreciate your business and continued trust in me.”

And when I didn’t respond in two days, he followed up with, “I never heard back from you so I wanted to follow up. Do you want to chat this week? I will do my best to accommodate your free time.” This is a perfect example of 'how to respond to an email' or 'how to have excellent customer service.' Or simply, how to do a job so well, you have customers raving about you like I am doing now.

With this level of customer service, attention, and honesty, combined with the recognition of my fears and current situation, as well as a suggestion for what to do, it is quite understandable why women turn to financial advisors. This is a recipe for continued success no matter how the markets change. I can only hope your financial advisor is as attentive and kind as mine (not to mention, good with money!). You can find Jonathan Stearns here.