Clients and Smaller Firms May Be Most Optimistic?

One of the members, Bret Goble, of the 4000+ strong “Next gen Market Research” group I moderate on LinkedIn approached me with a request to run a poll on the site. I typically don’t allow surveys/polls in the group, because there are frankly way too many survey monkey’s out there.

However, I thought the idea of asking a simple question about market sentiment among the researchers sounded like a good idea. The question I asked was:

Within the next month I expect market research activity to
A. Increase
B. Stay about the same
C. Decrease

The poll was then posted in the Next gen Market Research Group on LinkedIn. We may possibly repeat this in a month or two if there is interest.

About half of market researchers expect things to stay the same. However, five in two are optimistic!

“C-Level & VP” executives seem most optimistic. Interestingly “Owners” who are usually optimistic by nature are most conservative. Perhaps they have already been hit hard and are afraid to get their hopes up? I’m not sure which of these two groups is more credible.

In terms of size, both Enterprise and small firms are most optimistic. This seems to prove what I have been suspecting. Contrary to some of the articles I’ve seen lately which claim clients should cozy up to their long time suppliers in these hard times, the opposite and more logical is happening. Larger clients are seeking out value among smaller suppliers which have less overhead and can offer more at a lower price. This should allow Enterprise firms to conduct more projects.

Business Development, and Sales are most optimistic. They are the front line so they should know if things are changing before anyone else.

Optimism decreases with age.

Not sure how useful gender is in this case.

Let me know if you found this useful and would be interested in a followup?

Results of the Yearly Marketing Survey 2009: in times of crisis, financial metrics and customer loyalty are top concerns for Belgian marketers whose confidence level is at its lowest since 2005.

The current economic crisis has hit Belgian marketers significantly. 56% of them faced a budget reduction in 2008 and many expect more cost cutting in 2009. The House of Marketing’s sixth Yearly Marketing Survey highlights that half of companies in Belgium are currently facing customer loyalty and value challenges at a time when Belgian customers are most price-sensitive and postponing purchase decisions. The importance of green marketing, authenticity and customer experience in marketers’ minds also reinforces the growing need for building sustainable businesses.

For the first time in Belgium, a marketers’ confidence index has been calculated from expectations on marketing budget, staff and projects. The 2009 index is very low (9.5% compared to 25% in 2008), especially in the Healthcare and Utilities sectors, which is due to a significant decrease in expected budget and projects evolutions. For Nicole Berx, Partner at The House of Marketing, “Belgian companies need to adopt a longer-term and analytics-based decision horizon in order to sustainably position marketing as a key value-adding department within the organization.”

In addition to the focus on key challenges, buzzwords and media mix, Belgium’s largest marketing survey (over 1000 marketers responded this year) focused on the impact of the economic crisis on marketers and their planned reactions to it. Three key conclusions emerge for companies in Belgium:

1. Build a sustainable strategy and organization
Be genuine and authentic if you want to stand out from the crowd. A perfect fit has to exist between the corporate identity, business model and culture. Organizations also need to improve their internal operations and external touch-points within a consistent Customer Experience strategy

2. Do more with less marketing resources
Marketing budgets have been cut across the board. Marketers need rock-solid argumentation to raise the budget to its pre-crisis level. Pragmatic performance management tools allowing marketers to track the financial return on marketing initiatives will be crucial. The importance of ROMI will return strongly (only 28% of marketers see this as top challenge) once crisis-related corrective actions have been implemented.

3. Define, create and capture more value and margins
Highlighting product/service added-value is crucial when facing higher price sensitivity, postponement of purchases and a decrease of volumes sold. Find a balance between top-line and bottom-line marketers (data-driven, analytical) to leverage customer information effectively, identify profitable segments and anticipate customers’ reactions. Avoid decisions that are judgment-based, and focus on proper analytical skills to generate relevant insights. Marketers must also get their basics right (such as pricing policy) before launching into the latest buzzword; this includes processes, segmentation and value proposition.

2009 has begun full speed for most of us within the context of a deepening economic crisis impacting most marketers’ budgets and activities (where do marketers make deeper cuts). Marketers are understandably tightening their programs and operations to address costs pressure, access to capital and buyer confidence.

But are most marketers really clueless? This is sometimes not far from the true situation.

According to some 2009 marketing predictions, nearly half of marketers believe they have good insights into retention rates, customer profitability and lifetime value but “76% of senior marketers believe they are not realizing the full revenue potential of their current customers.” In order to do this, many marketers focus on becoming more personalized, relevant and precise in customer communications; and are finding new ways to cross-sell or upsell current accounts.

Although some marketers see in recession chances for their brands, the lack of customer insight is often an obstacle to maximizing full potential.

So where is marketing heading? For some, the new permanent crisis of marketing is on, and that’s certainly food for thought. Marketing is indeed in an existential crisis as it faces unprecedented challenges to its conventions.

But new, unprecedented opportunities can and should be grasped too. McKinsey Quarterly lists the new rules of marketing. The downturn’s new rules for marketers have arrived. Companies have to radically rethink how they do marketing – marketing can no longer be viewed as a collection of programs, but instead as way of behaving in a networked economy of “market communities.”

Our 2009 Yearly Marketing survey will cover the latest marketers’ trends in Belgium, but what is clear is that changes to marketing spending and strategy have already happened, while customer loyalty, experience and intelligence are top priorities. Marketers must certainly innovate to keep their jobs and help their companies survive this deep crisis.

Marketing leaders have had enough of hearing about Web 2.0 and Green. Oh yes, really? Many prefer to talk about the economy or how to make marketing recession-proof . A multi-dimensional question! For a start, client information is too often disconnected from companies’ strategies. Few employee rewards are tied to increasing customer marketing too. Actually, 60% of companies do not compensate any employees or executives based on customer loyalty, satisfaction improvements or analytics. In other words, customer retention and customer experience are not key performance indicators for most employees despite being the top marketing challenges.

Anyway, even without the right formula for grabbing market share, what is sure is that some marketers have been making millions from Obama, so all is well then, right…?

For questions or comments, please contact philippe.ruttens@thom.eu!

We kunnen er niet naast kijken: de media hebben de mond vol van ‘de crisis’. Negatief nieuws verkoopt altijd goed, maar er is natuurlijk wel iets aan de hand. 2009 kondigde zich in nogal wat sectoren niet zo goed aan. Vandaag nog had ik een bespreking bij een klant die qua omzet voor 60% afhankelijk is van de autoindustrie. En die draait vandaag op de helft van zijn normale capaciteit…

Als de omzet terugvalt, heeft dit bij vele ondernemers een negatieve weerslag op het marketingbudget. Minder verkopen is minder uitgeven aan marketing, redeneren ze. En dat is terecht, vind ik. Een marketingbudget wordt het beste gelinkt aan het te behalen omzetcijfer. Als die stijgt, gaat het budget mee de hoogte in. En omgekeerd. Het cliché ‘in slechte tijden moet je meer investeren in reclame’, volg ik niet.

Mijn stelling: verminder gerust uw marketingbudget, maar blijf evenveel communiceren. En hier wringt het schoentje. Als uw marketingbudget voor 90% bestaat uit advertenties of andere vormen van reclame, en u schrapt daar de helft van zonder alternatieven te zoeken, dan valt uw communicatie op de helft terug.

Anders gezegd: verminder gerust uw reclamebudget, maar investeer tijd in andere communicatievormen die u weinig of geen geld kosten. En zo zijn er heel wat. Nu is het goede moment om uw marketingaanpak in vraag te stellen. De tijden kondigen zich niet zo positief aan. Misschien tijd voor een nieuwe marketingmix?

Beloof ik u hiermee dat u minder kan uitgeven, meer kan communiceren en meer resultaat kan halen? Jawel. Dat vraagt om meer uitleg…

Een marketingbeleid bestaat voor mij uit volgende elementen:
- uw strategie (verhaal, positionering, doelgroep, unieke voordelen en doelstellingen)
- communiceren via digitale media
- communiceren via netwerking
- uw huidige klanten servicen
- reclame voeren
- directe verkoop ondersteunen

Marketing is dus méér dan reclame. Hét recept voor marketing in crisistijden is:
- optimaliseer uw strategie
- benut beter de mogelijkheden van digitale media (internet, e-mail én sms)
- investeer meer tijd in netwerken en in partnerships
- verzorg beter dan ooit uw bestaande klanten
- verminder uw reclamebestedingen
- zet marketing en persoonlijke verkoop op één lijn

Het is nu hét moment om uw denkpatroon te veranderen, om af te stappen van uw vastgeroeste technieken. In goede tijden, als het orderboekje overloopt, zetten ondernemers hun marketing vaak op automatische piloot. Als de zenuwen gespannen staan, is er ruimte voor nieuwe inzichten. Voor vernieuwende ideeën. En met een bonus van formaat: een rendabeler marketingbeleid.

Last week I went to the pricing-seminar of the Vlerick marketing alumni and I saw three interesting presentation on the topic ‘pricing’:

Prof. Deva Rangarajan first gave some background about the theoretical framework behind pricing. He started with the quote of Raymond Corey “Marketing is the moment of truth-all of marketing comes to focus in the pricing decision”. This supported his point that pricing is the only one of the 4 P’s where you actually take something from consumer and that despite his importance, price is the least research P. This explains also according to him why a lot of companies struggle with the pricing process. He also made twe other important points about pricing. The first was that you have other tools than price to work round price perception (f.e packaging). His second statement was that you first have to know what you consumer values before you start changing the price. Because your price is a function of the value the consumer attributes to your product.

Francois Delvaux from the House of Marketing started with some results of a survey in which 50% states that they will have to increase their prices while 62% thinks their products offer a unique added value. Building on this “contradiction” he explained some pitfalls in pricing:
-creating higher sales goals=> puts pressure on the market
-defend price-increase by offer free value-adding services=> lowers value perception of the company
-give lower price to people who ask for it=> you attract price sensitive people + existing consumers are angry
For Mr. Delvaux pricing need to be a good match between perceived value and the price so for him in economic dowturn you should add value, make offers adapted to different targets and make choices on who you want to invest.

Kurt Boons from the Belgian Post showed the best practice of his “journey to pricing excellence”. He stressed the fact that pricing needs to be something in line with strategy and the importance of consistency in the pricing policy/management.

Next Vlerick marketing Alumni event: www.customer-experience.be. Thanks to our collaboration with the people of the Vlerick Marketing Alumni we obtained a special offer for this conference for baqmar-members:
-subscription 495 euro
+
-welcome pack (book colin shaw+ bottle of the famous grouse) value +/- 60 euro for free
All you need to do is use the code thrills in your online subscription.