Brand and deliver

However squeezed your finances may be, it’s vital to maintain a strong brand presence and keep a dialogue with your customers. Research shows marketing spend reaps benefits in the long term.

Whether it means being down with the kids or hip to the beat daddy-o, no business would deny that it’s essential to build relationships with customers – yet marketing is frequently one of the first casualties of a cost-management drive.

All too often, marketing is viewed as a cost instead of an investment. Any proposed campaign, therefore, needs to be accompanied by a rigorous business case showing the benefits it will deliver. It needs to align itself with the company’s current strategy and look for upside while ceasing projects that do not create value. This will help your CFO or FD to perceive marketing as an asset that adds to the bottom line.

It is easier to measure the return from demand generation spending than from brand-building and PR activities, as these take longer to have an impact on the company’s revenue. The money spent needs to be amortised over the entire period in which it is expected to benefit the company.

Generation X

A 1986 report by McGraw-Hill Research’s Laboratory of Advertising Performance analysed the performance of 600 industrial companies during the 1981–82 economic downturn. It found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981–1982 recession averaged significantly higher sales growth both during the recession and for the following three years than those that eliminated or decreased marketing”.

Admittedly, the economic landscape has evolved since then.

Finger on the pulse

Until recently, ‘interruption marketing’ – cold calling, direct mail, newspaper adverts and so on – was widely seen as the most effective approach. Today, successful brands tend to use digital communications to build an ongoing dialogue with their customers.

While cuts to marketing budgets may make short-term sense, in the long term they can result in customers feeling alienated, leading to falling revenue, tarnished brand identity, lost positioning and reduced market share.

By contrast, companies that maintain their marketing budgets can take advantage of a market much less cluttered with their competitors’ messages. This will put businesses ahead of their rivals by enhancing their customer relationships and enabling them to explore new avenues such as mobile content. ■

CLIENT: KPMG