16 Sep Survive AND Thrive, balancing short and long term planning
Whilst we are planning (quite rightly) as an industry how to manage the many complex challenges of the forthcoming winter, it is just as essential that we can lift our heads and plan beyond the pandemic and immediate issues to determine a long term strategy. Survive in the short term, thrive in the longer term.
Getting this balance right is a challenge in itself, and many factors will come into play, not least the size and resources of your organisation. But whatever your size, unless you allow some time – and budget – to plan for the longer term as well as your immediate challenges you are only surviving, and being on the brink is not healthy for any organisation.
During many of the current conversations with MTN members the questions arises as to ‘what marketing should we be doing now?’ As well as the uncertainty as to what messages might be appropriate for customers right now, there is also a clearly understandable desire to cut marketing spend.
‘Hunker down’, ‘survive’, ‘bunker mentality’ and similar terms are what we are hearing from many members focused on survival. But what is the cost of only focusing on survival and nothing more? If you can survive this season by cutting costs but as a result losing customers what will next season bring? When you’re evaluating cost, it’s also important to consider the cost of doing nothing? Sometimes doing nothing can cost a business far more than spending more.
Another comment we are hearing right now is to only spend on marketing where ROI can be proved. Seems sensible at first, especially when budget is under pressure. But again consider the true cost of this approach. Firstly, this limits you only to short term activation. But short term there may not be an opportunity to gain an ROI if the market is not ready to book. So the logical outcome of this approach is you will do nothing. See above.
Additionally, within such an uncertain market both defining what is likely to deliver positive ROI and measuring it accurately has never been more difficult. So again, we end up with the most likely outcome being to do nothing.
Effective marketing has always required a blend of short term sales activation and long term brand growth. The exact mix depends on the industry but falls somewhere around the 40/60 mix short vs long term. One of the problems with using ROI is determining the correct timescale. Short term activation methods such as email and search will always outperform brand building in the short term, but brand wins in the long term as the positive impacts on sales are cumulative, whereas short term activations tend to have an impact that falls to zero or close to when the activation ends.
The ease of short term activations especially in digital formats has been gradually eroding overall marketing effectiveness in recent years as that 40/60 split is ignored with activation receiving 80 or even sometimes 100% of effort and spend.
Of course sales activation has never been easier than right now. Competition for search has nosedived, along with cost per click, and there is more deals than ever available for any form of short term advertising. So temptation to stick with activation right now is easy to understand, and of course with a compelling and clear message that you think can resonate with consumers it’s a valuable tool still.
But the pandemic has given us the chance to pause and reflect. Undoing this recent shift to the short term is more important than ever, and since ROI of short term activations is so much more doubtful given the uncertainty in the market, the shift to longer term brand activation has never been more attractive.
Consider too that MTN consumer research has clearly identified how company reputation and perception (i.e. brand attributes) is outperforming metrics such as customer service, online reviews and recommendations when it comes to the factors that customers value most right now when it comes to booking a ski holiday. In other words, those organisations with the strongest brands are much better placed and more likely to benefit from any uptick in consumer bookings, and whilst competitors can respond with short term activations such as online review ratings and customer testimonials they will land with less significance to consumers than established brand strengths.
So if you can, find some budget and pull the marketing lever marked brand. It may seem counter intuitive, but building a brand promotes security, longevity and commitment. And those sentiments will really resonate with consumers right now.
James Gambrill CEO of Mountain Trade Network will present