Aligned Marketing Blog

On Monday we talked about golf and related it to your business: You have to play the ball where it lies in the same way you have to make business decisions based on today’s realities. Wishing for a better lie is silly.

Our economy is in the rough and, while most are slashing expenses, people and marketing budgets, some leaders are using this pre-recovery time to increase investments in marketing. In a recent BtoB Magazine survey, “2010 Outlook: Marketing Priorities and Plans Survey results, 11-16-09, 71% of those surveyed are investing more in their website in 2010 than they did in 2009.

In a separate study from Bain covering over 2500 companies, about 24 percent more firms were shown to “move from the back of the pack to the front of the pack,” with regards to sales and profits, during recessions than do during non-recessionary times. Do significant marketing investments during a recession make sense?

It did for Southwest Airlines and Wal-Mart (see Monday’s post). Both were noted in the Bain study for their vision and results but other companies have made smart pre-recovery investments as well. For example, the “Intel Inside” campaign was launched during a recession in the 1990’s. Before that, Proctor & Gamble invested heavily in Ivory Soap during the Great Depression and achieved spectacular results that lasted for decades. What is it that Southwest, Wal-Mart, Intel, Proctor & Gamble, great companies all, knows that other companies seem to miss?

It’s this, marketing investments that are consistent and aligned with your customers’ needs and aspirations are always wise investments. Now is the time to assess your customers’ needs, as well as your own strengths and goals, and invest.

Slashing marketing to survive in 2008-2009 may have been necessary but now you have to play the ball were it lies. What’s your plan for 2010 and 2011? Do you know what your competitors are doing? Who was weakened by the recession and who became stronger is important marketing intelligence. As the dust settles, where do you stand or do you even know?

A return to the pre-recession competitive landscape in 2010 is unlikely. The mammoth adjustments necessary for survival changed the playing field. You and your competitors were not affected equally and new options, most likely driven by technology and the web, are available to your customers and prospects. In every segment of the economy customers are beginning to look at products and services through a new, post-recession lens. How visible are you?

John Donahoe is CEO of eBay and to summarize what he said,

“It’s not about battening down the hatches and waiting for the storm to pass anymore than it is about betting big in the vague hope your hunches will pay off. Instead, it’s about executing what you do well better than ever before, making improvements, seeing the potential in new opportunities and, most importantly, having the vision to see beyond the immediate situation and taking action…“There is more market-share shift in turbulent times than there is in good times — more of an opportunity for a strong company to gain ground.”

Donahoe is right. You can’t stand over the ball forever. At some point you have to pick a club, commit to the shot and make an aggressive best swing. Are you going to play another round defensively, trying not to shoot over 100? Or are you going to play aggressively in hopes of breaking 90? It’s your choice. Take the shot.

Have you heard about this? In a Wall Street Journal article (July 17, 2009 http://tinyurl.com/lemhhe) written by Miguel Bustillo Wal-Mart announced it will require suppliers to provide an “environmental label” for all products sold through Wal-Mart. This is a huge initiative and, because of Wal-Mart’s clout, could end up defining environmental labeling for every product sold on the planet!

The article stated, “Wal-Mart Thursday will tell suppliers they must calculate and disclose the full environmental costs of making their products, then allow Wal-Mart to distill the information into a rating system that shoppers will see alongside prices for everything from T-shirts to televisions.” That means the largest retailer in the world is now going to be taking on the role traditionally held by a government agency and a consumer advocate. It gets better.

An initiative of this size will take years, maybe decades, to implement. The driving force behind the initiative is marketing. Young consumers typically care more deeply about the environment than their parents and eco-friendly initiatives are highly attractive to this group. In addition, Wal-Mart clearly wants to get ahead of any regulatory actions by setting an early standard. Don’t forget, any company the size of Wal-Mart views the government as a possible competitor because unfriendly legislation can constrain growth.

One has to wonder about the logic behind adding cost to already fragile suppliers in this economy but, since Wal-Mart will always secure the lowest possible price, what do they care?

The specifics of the initiative are unclear (there’s a surprise) but what they’re looking for are metrics on greenhouse gas emissions, solid waste production, and water usage, information they roll-up to determine sustainability. Sustainability is a touchstone word in the environmental community that refers to a company’s ability to continue producing goods using, ideally, a minimum amount of energy and producing a minimal amount of waste. That sounds like a good goal unless "minimum" ends up being defined as zero.

Buried in the new lexicon is another eco-babble term I had not heard before, social compliance, which includes community investment. Wal-Mart is apparently aligning itself with government officials who see social engineering as a core responsibility and necessary to constrain the evil-excesses of free enterprise. Personally, I think returning 7.2 million lost jobs (Bureau of Labor Statistics, July 2, 2009) would be some fantastic social engineering but what do I know?
 
Wal-Mart’s “comprehensive sustainability index” will measure the environmental impact of the suppliers’ products. Wrote Bustillo, “For example, an index might flag how much each contributes to global warming and if it contains wood harvested in ways that deplete natural stocks.” I get it, for every tree we grow we get to sew a shirt.

Jay Golden, an Arizona State University professor and co-chairman of a consortium that will help Wal-Mart design standards added, "You can design something that is carbon neutral, that does not contribute to climate change, and yet is still detrimental to human health in other ways."

Let me get this straight, a group of Wal-Martians and academics are going to make sure that products are not being created from “wood harvested in ways that deplete natural stocks” and that suppliers don’t “design something that is carbon neutral, that does not contribute to climate change, and yet is still detrimental to human health in other ways.”

Here’s an idea: Since it’s been proven that feces adds to global warming, why don’t they just cut out all this crap and lower our prices 5%? Since Wal-Mart sales are over $400B we can call it Wal-Mart’s $20B Stimulus Package.

Steve