Most markets are cyclical. What goes up does come down. A downturn may seem like a marketer’s worst nightmare. But in fact, this can be your time to shine. In the first of a two-part series, learn five ways to grow share and increase margins, even when the outlook seems bleakest.
When a market hits the doldrums, companies often have way more product in inventory than anyone can sell. As a result, organizations fracture, silos worsen and chaos ensues.
As a marketer, you’re not alone if you feel stuck in the middle. Top executives tell you to take some action. The sales force chases anything and everything to make their numbers. While your marketing initiatives take a long view, everyone else at the company seems to be playing the short game.
In this situation, marketing is often targeted with increased pressure, impossible questions and headcount reductions. You probably won’t have the same tools you had before, especially when it comes to budget. No budget for new media partnerships. No budget for new creative. No budget for market research.
Wow. Take a breath. I feel your pain. Now . . .
What, exactly, can you as marketer do to overcome a downturn? The answer is simple.
Yes, you read that correctly. Marketing has to market. In the purest sense of the word.
Remember, it’s called “marketing” for a reason — because it’s about the market. It’s always about what the market wants to buy, not what you have to sell. That’s why companies — good ones —evolve from a product company (if you build it they will come), to a sales company (we have this stuff, now we should sell it), to a marketing company (let’s build and sell what the market actually wants).
As a marketer, you can go from goat to hero by taking a hard-core business approach to marketing that will boost your internal credibility and help your brand grow share during the downturn.
Gaining share in a down market — it can be done!
Two dynamics appear in a down market:
- Customers want to buy less, and
- Customers want a different mix of what they buy
Truly successful companies know how to manage these dynamics. If you can grow your business relative to competitors during the most competitive time, it’s a win for you and a loss for them. Share, not volume, is the key performance metric when the market dips.
A company that focuses on share gains will minimizes losses in volume and profit by growing share of the volume that is there. And it maintains margins above the industry by offering what the market actually wants rather than dumping low-demand goods. The results are higher profits, lower inventories and financial returns that give the company a clear competitive advantage. Increased share and better margins in a down market equate to true competitive success.
And that takes good marketing.
Five steps to win share in a down market
There are five actions you as a marketer can take to grow share and increase margins to win in a down market:
- Understand the market better than ever.
- Segment customers and products mercilessly.
- Maintain support to the buying segments.
- Shift focus for the nonbuying segment.
- Produce what the market is buying.
For more detail on these guiding principles, download our free e-book From Adversity to Advantage: 5 Things a Marketer Should Do to Win in a Down Market.
Go for the win-win!
Remember, the benefits of growing share in tough times are double what they are in an up market, because when the competitors don’t do those things, they lose twice. They lose both volume and margin, and they lose market share. Share is more than a number — it also represents crucial brand visibility and relevance in the market.
Success in a down market has many faces. Lower inventories of low-demand goods. Higher inventories of in-demand goods. Lower discounts. Higher margins. Higher sales to buying customers. Appropriately lower sales to nonbuying customers. Market share growth within the buying segment and within the market as a whole. In other words, marketing nirvana is actually within your reach.