Beware The Discount: Gaining Market Share During A Recession


I was recently published in Alberta Venture, discussing how brands could tap into the recession zeitgeist.

It was a fun piece to write; it allowed me to review what brands were doing right - and wrong - to gain market share during the economic downturn. The gist of the article is:

There is nothing inherently wrong with tweaking your brand to reflect the recession. But like most things, it’s the execution that matters... “Dirt cheap” isn’t a long-term strategy; aspirational partner is. Ensure that brand tweaks make consumers feel like savvy shoppers, not scroungy skinflints.

I feel that recent campaigns by McDonald's missed the mark, but laud Target's "Brand New Day" campaign as an insightful way to make thrift a fun part of life.

Apple, A Luxury Experience

A good friend and former work colleague, Kristian Perry - also a great filmmaker, writer, and animator - emailed his response, and I was struck by what he had to say about Apple in particular:

In the computer world, I understand that there is a cry for Apple to make a cheaper notebook computer -- their cheapest one retails for about $1,000, but I think this would be a mistake.  Apple's real selling point is that you are not buying a computer, but an experience.

If they sold a cheaper machine, they might have to cut corners, and then you might see more breaks in the facade of the "Apple Lifestyle".  So unless they can maintain the quality of experience that comes with them being a computer luxury brand, they would be making a real mistake to sell a "cheap" model.

I think Kristian is totally correct. Not just about faulty products, but a cheapened experience; brands can harm themselves by falling into the "discount trap," especially during tough economic times.

A Lesson From Politics

It reminds me of an important lesson I learned during my time in politics. We were sending emails and soliciting donations for our cause. I noticed that when we emphasized the smallest donation, our overall yield was far lower than when we placed higher donation values above the fold.

Why was this happening? Didn't people want to know the value option - that we would take whatever we could get?

It turns out that they didn't want a value. Even in a pinched economy, our donors weren't giving away money to a worthy cause - they were investing in us, our candidate, or our mission.

When an ideal translates into tangible money, people don't want to toss pennies, they'd rather palm you $100 you can really use.

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The Discount Spiral

I'm not saying value or discounts are all bad; sometimes they can be very effective (Target is a perfect example). But if they're done all the time and that's the only message you really have - you're killing your long-term strategy.

Think about the last time you were in the grocery store: they probably had signage alerting you to their "discount price." But we all know their "regular price" was inflated and is never actually charged. Everything is discount all the time! So really, nothing is truly discounted, ever.

And if you're only talking about value and discounts, it makes your brand sound cheap. Whole Foods has experienced a stock dip just like other grocery brands, but two things separate them: their dip hasn't been as low as other retailers and they are far better positioned for post-recession spending (when consumers emphasize quality or variety over discounts).

What Do You Think?

Am I off the mark? Despite the recession, I believe you shouldn't hurt your long-term strategy for short-term gains. And all of you are thinking "No shit." But then why do many - dare I say "most" - brands ignore this advice?

Maybe it's a panic for good results each quarter. Maybe it's because CMOs have an average tenure of less than two years - the shortest time of the C-level suite.

Why do you think long-term strategy is losing out to fire sales? Why has your brand succumbed or how have you resisted the discount temptation? The community would love to hear your thoughts in the comments section below.

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P.S.: Read the full Alberta Venture piece and check out Kristian's great work.


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10 Recession Marketing Myths De-Bunked


I recently posted my top 10 marketing myths that deserve to be de-bunked, especially in this economic climate. You can read the full posts at Experience Matters and iMediaConnection's blog.

Marketing during the recession is a terribly important topic for me - so much so that I wrote an e-book on the subject. I'd be honored if you read it today during lunch or on your commute (there's no cost, of course).

I'm so passionate about this topic because I think we are in a time of great opportunity. It's easy to get depressed or pessimistic or cynical. It seems like everything on TV or elsewhere in the media is all doom and gloom.

It doesn't have to be this way. I truly believe that this is the perfect time for you to break out of your mold. Differentiate yourself from your competitors. Do the tough work that will allow you to burst out of the gate once money starts flowing again.

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Here are a few of my favorite myths in need of a good de-bunking:

2. I'm Afraid. How is this a marketing myth? Think of everything you hear around the office that translates into "I'm afraid."

  • "Has the boss seen this?"
  • "Nobody's done that before."
  • "It's risky."

A lot of businesspeople hunker down during a recession, hoping they can just ride it out without creating too many problems. That's actually more risky (and scary).

It's OK to be afraid of new marketing tactics, but it's not OK to allow that fear to stop you from taking risks. As General Eric Shinseki said: "If you don't like change, you're going to like irrelevance even less."

5. I'd be better off letting my competitors try [insert new marketing initiative] first. Then I can learn from their mistakes.

What you consider mistakes are actually learning opportunities. Sure, some missteps are more seriously, but consider the experience your opponent is gaining while you sit on the digital sidelines.

Expert commentary from Sun Tzu's The Art of War explains the importance of being ahead of your opponent:

"Once war is declared, [the leader] will not waste precious time...with all great strategists, from Julius Caesar to Napoleon Bonaparte, the value of time - that is, being a little ahead of your opponent - has counted for more than either numerical superiority or the nicest calculations with regard to commissariat."

Being first allows you to build up what Len Kendall describes as a sort of "giving storehouse." His "Give/Take Ratio" post illustrates that subsequent market competitors will have to work much, much harder to earn trust than the early adopter.

8. We don't have anything to share with our customers. Besides, they don't want to talk to us, anyway.

This is sometimes true. Not many people want to chat up the guy who makes their ball bearings.

But there are a lot more brands people want to interact with that aren't making an effort yet. So what do you have to offer?

First, you've got access. If customers are interested in your product, it's likely they would want to take a peek behind the curtain.

Second, you've got an experienced workforce with highly specialized knowledge. Employees frequently have the potential to be amazing brand representatives, given the proper encouragement.

You can find all 10 marketing myths de-bunked at Experience Matters and iMediaConnection's blog. Feel free to leave a comment about any of the myths or list another you'd like to see de-bunked.

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Tips On Getting A Marketing Job During The Recession


Changing jobs is never easy, and the recession multiplies the difficulty. But there are ways to improve your chances of finding a better position. I know - it's worked for me.

My story is featured on today's MarketingProf's MP Daily Fix: How I Got the Job: Optimizing Opportunities in a Stale Economy.

In that post, I explain:

  • How to become a Google detective
  • Why personal contact can make all the difference
  • How to strategically align your efforts
  • Why "networking" should be omitted from your vocabulary forever

I hope this helps you in your job search. Enjoy!


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Marketing During A Recession E-Book

After many weeks of work, I am proud to release a new e-book: Marketing During A Recession: Economic Slowdowns Are Opportunities (PDF)

We're all worried about how the recession will effect us and our business. But there are a lot of misconceptions and downright mistakes about how to use marketing during this recession. This e-book draws from expert advice and provides you a path forward in these difficult times.

Please download it or check it out on SlideShare. (It's free, of course.)

I got some great help from Joann Sondy, a designer in the online community - she's the reason this e-book looks so much better than my previous ones. She was great to work with and knew the best design strategy for this particular material.

Consider hiring Joann for your next project. You can check out her portfolio at (seriously, have your annual reports ever looked this good?) and read her blog at Some more information about her work is below:

Joann Sondy has an extensive background creating and delivering corporate materials for financial and investor relations. With more than 15 years, Joann has produced distinctive communications that help IR/PR agencies build audience awareness and confidence. If your strategy calls for a presentation, e-book, white paper, fact sheet and/or annual report, contact Joann today. joann{at}creativeaces{dot}dom or DM her via Twitter: @jsondy.

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When ROI Measurement And Actual Effectiveness Are Mutually Exclusive


In The 2009 Social Media Marketing and PR Benchmark Guide, MarketingSherpa explains a conundrum marketers are facing in a web 2.0 world:

What do you do when the ability to measure your return on investment (ROI) is mutually exclusive to the effectiveness of a particular campaign?

In other words, how do you sell a tactic up the chain of command that you know will work but can't provide definite numbers? Or conversely, how do you dissuade a course of action that has proven ineffective, but which your executives embrace because they understand the number of impressions or "hits" or lives interrupted by the campaign?

It's a difficult predicament, to be sure. And it appears that's the situation most marketers are facing.

Known Badness vs. Unknown Goodness

Traditional PR and marketing has never had much measurability, but it is a known entity. What was the return on investment for your PR firm to make unsolicited calls on your behalf? How many sales resulted from your Times Square advertisement? Traditional marketing has always had terrible measurability.

But, it's what your boss knows. Now, we have new technologies that can show an amazing array of ROI statistics, but they're new. They're "untested." They might fail. (Because that never happens with old media!)

Yes, I Can Back That Up

Don't believe me? Take a look at the report.

The executive summary shows that most marketers think the ability to measure ROI (also reported the second most significant barrier to social media adoption) has "nothing to do with the effectiveness of the tactic" (page 6).

In fact, MarketingSherpa goes on to say that:

"Marketers obsessed with only tracking social media results quantitatively are missing the point and may find themselves employing much less effective social media tactics for the sake of measurability."

How about you? Would you rather fail than tell your boss she's wrong?

Budgets Going...Up?

So, are marketers telling their bosses about social media? Quite possibly, yes. But marketers might not be educating their bosses as much as they need to.

MarketingSherpa reports that "social media and email are the only to tactics on which more companies are planning to increase spending than are planning to decrease spending" (page 4). This matches Forrester's recent report entitled Social Media Playtime Is Over. They report even higher numbers, saying that over 50% of marketers will increase their spending on social media in the coming year.

If you're a social media marketer and think this sounds great, think again. Just because marketers expect the amount they spend on social media to increase, that does not mean it'll be a lot. In fact, B.L. Ochman says that Forrester reports three-fourths of marketers expect to spend less than $100K on social media marketing tools.

Read the conversation B.L. includes at the end of a recent post. I think she correctly portrays a set-up for failure, where marketers are expected to spin social media gold from corporate hay, stymied by every other department in their company.

So What Do I Do?

As a social media marketer, you have the proverbial wind at your back. You must seize this opportunity, but don't forget to lobby for the resources and permission you will need later.

Personally, I recommend buying MarketingSherpa's Social Media Marketing and PR Benchmark Guide. Their research is among the best, their arguments are persuasive, and, to be honest, it's expensive enough for your boss to trust it. Or buy Forrester's report. Or another one like it. But, do something.

We have fought for so long to be taken seriously. Remember being scoffed at five years ago when you claimed Facebook would be huge and a decent marketing tool? Remember when Twitter was just a fad? You get it. You see further down the road than most people. (Strategy is part of your job, after all.)

Well, part of your job is also being an educational resource for your boss and her bosses, too. Buy them a report. Send them information from sources they trust. Hell, reserve time on their schedule and read the damn stuff to them. But make them listen.

Otherwise, you will be one of the poor marketers tasked with doing "something viral." If you hear "we need a Facebook page" and don't hear mention a strategy or goals, you are about to get screwed.

But this is your chance! We finally have the green light to participate in social media marketing in a responsible way! But leverage the resources you need (don't forget staff time!) and the backing to make it all possible.

Then, come back and let us know how it went!

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(Note: I am a MarketingSherpa affiliate which means that I make a little beer money if you buy the report. But I'd tout their work even if I wasn't. It's great stuff, period.)

Marketing During A Recession: Social Media Tipping Point?

Marketing during a recession is a multifaceted topic and that's why this week has been devoted to subjects like how recessions are opportunities to gain market share, the illusion of stability in marketing, the role of risk and of failure.

I would like to end this week-long series by asking whether the recession can tip social media marketing into the mainstream. Could we see a widespread embrace of blogs, Twitter, and other forms of social media? Answer: probably, but not positively.

Embracing New Media Out Of Desperation?

Budgets are drying up, but the online channel is cheaper and easier to measure than traditional PR and print advertising. Television and the automotive industry - not usually bastions of innovation - are two examples of industries putting a bigger percentage of their marketing budget into digital (despite the ever-shrinking total budget).

As Lisa Hoffmann says, necessity is the mother of bravery. She claims that "[t]ight budgets will prod [small businesspeople] to do what all the preaching and prodding won't."

Likewise, Julie Power states that "recession could transform Twitter from an influential fringe network to a mainstream marketing movement."

I think they're right - that the recession will cause business to look toward new media, that it could transform it into the marketing mainstream. That's why I predict 2009 as a year of false starts and quickly abandoned Twitter accounts.

Winner And Losers

Don't get me wrong - winners will emerge and knock our socks off with their social media campaigns. Heck, not even just "campaigns." They will understand social media in such a way that they'll forget a short-term campaign and just add social media directly into their corporate DNA.

But of course, others won't. And that's fine. I'm reminded of a quote from Bruce Barton, former Chairman of BBDO: "In good times, people want to advertise; in bad times, they have to." It's a prescient warning to go against human nature. You are not safer in the foxhole. Hunkering down will leave you with nothing when you emerge.

There are plenty of smart people claiming that marketers will stick with the tried and true methods in 2009 and they have valid points. Companies will still sink millions of dollars into Super Bowl ads and maybe that works for them.

But the ones who include new approaches, who take the advice of people like Lisa and Julie, who experiment and figure out now exactly how their audience wants to interact - those will be the winners after 2009.

Social media is the wild west and there is the opportunity to eat up some real market share. Remember, it was the early adopters who made most of the money in the Gold Rush of 1849.

Ending The Series

I hope you enjoyed this series about marketing during the recession. If so, I urge you to subscribe and send along these posts to your friends or co-workers.

And please leave comments or suggestions below. Did I get it terribly wrong this week? Feel free to share your thoughts with the community. And thanks so much for reading.

P.S.: Lisa and Julie are great folks to follow on Twitter, by the way.


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Marketing During A Recession: Economic Slowdowns Are Opportunities

People are scared.

Recessions (OK, economic slow-downs) are scary things. Maybe that's why I have noticed a recent theme emerge from some prominent bloggers - a lot of smart people are discussing risk and stability, and they are discussing the role of failure from a business POV.

This week, I will post a series on these topics, drawing from some of the more knowledgeable online marketers and social media types. This series will focus on the role of marketing during a recession and how to manage risk, stability, and failure. My aim is to embolden you, to reassure you that we're all sharing this anxiety but that there is a path to success.

Recession As Opportunity

Typically, marketing is one of the first departments to see cuts during economic hard times. But cutting marketing, advertising, or PR is one of the only sure ways to lose market share during the recession and then really be screwed during the boom time sure to follow.

Here are some quotes from the experts:

"[H]istorically, PR, Marketing and Advertising budgets are the first to be cut; however, that could be one of the first mistakes a business makes in an economic crisis." -WSJ's MarketWatch

"In a downturn, aggressive PR and Communications strategy is key." -Doug Leone, VC, Sequoia Capital Silicon Alley Insider

"This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times." -John A. Quelch, Professor of Business Administration at Harvard Business School

"Savvy marketers realize that it is because many marketers cut advertising spending during a recession that a recession is the best and least expensive time to gain market share through advertising...It's well-documented how companies leverage downturns in the economy to effectively market themselves. In the 1970s, marketers like Revlon and Philip Morris increased their advertising to gain market share. Today, companies like Procter & Gamble, General Motors, Verizon, News Corp and PepsiCo all increased their first-quarter ad spending." -Joelle Gropper Kaufman, MediaPost

Clearly, marketing during a recession allows you to retain or grow your market share when your competitors are hunkering down. Maintained visibility translates into recognition, familiarity, and, ideally, trust.

Why Online, Why Now?

The role of the marketer has undergone dramatic changes in recent years. Instead of interrupting, we are facilitating two-way conversation. Instead of persuading with subterfuge, we are providing valuable content as a way to get new business.

The online channel is cheaper than other mediums, easier to measure, and only increasing in importance. If you agree with the premise of this first post - that marketing should not be shunted during a recession - then I encourage you to check back for future posts.

I will be posting about the idea of stability during a recession, the role of a marketer in regards to risk management, how failure can be your greatest asset, and why an economic slowdown might push social media tools into the mainstream. Subscribing is an easy way to ensure you are notified when these posts go online.


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My Q&A With Paul Richlovsky Of Fathom SEO

I recently spoke with a good college friend who now works at Fathom SEO, out of Cleveland, Ohio. We discussed objections to participating in social media, the perils of cutting online marketing budgets, ways to gauge website health beyond rankings, and the state of the SEM industry.

You can read the full interview on Fathom's blog. I encourage you to check it out and leave comments, especially if you have stories that illustrate or refute any of my points.

For instance, I have recently been giving a lot of thought to the effects of the economic downturn on marketing budgets and allocation of funds. Tangentially, I've also been considering the role of risk in our profession. This question is one example where those two topics came together:

Give me the best reasons why companies that need to trim advertising budgets in these tough economic times should not cut their Internet marketing funds.

The best reason not to cut your internet marketing funds is because it has been repeatedly proven that the companies who cut marketing during recessions lose market share to companies who don’t.

This is from a recent MediaPost article that puts it pretty succinctly:

“It's well-documented how companies leverage downturns in the economy to effectively market themselves. In the 1970s, marketers like Revlon and Philip Morris increased their advertising to gain market share. Today, companies like Procter & Gamble, General Motors, Verizon, News Corp and PepsiCo all increased their first-quarter ad spending.

The typical response to cut back on ad spending when the economy slows down is understandable. However, advertisers with strong brands, stable monetary resources and compelling value propositions can take share from their weaker competitors by effectively targeting their advertising.”

That doesn’t mean you need a huge pile of cash, either. These days it’s cheaper than ever to retain or expand your marketing during tough times.

How much do you think Bill Marriott’s blog is doing to attract customers? How much do you think Frank at Comcast has insulated the company from (more) online disasters? We’re talking, what – minutes a day for Bill and one salary for Frank? And their worth to the company and brand is through the roof.

Creative companies will not need to risk their market share during this or any recession. They will need to be brave and creative, sure, but the online channel wasn’t meant for the timid anyway.

Go to Fathom's blog to read my full interview with Paul. And please let me know if this Q&A was helpful or not. Thanks for reading.


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