A colossal man-made storm known as “the fiscal cliff” looms on the horizon of the United States economy. Much attention has been paid to the political wrangling behind this situation in Washington, while Congress seems oblivious to unanimity among economists that large-scale abrupt austerity measures like this “fiscal cliff” generate more harm than good. And most troubling is that while all parties agree that it should be avoided, no deal is likely before the end of the year, so the fiscal cliff is looking mighty inevitable.
For a good non-partisan explanation of the fiscal cliff and its consequences, it’s worth reading this post to the Washington Post Business Blog called The Fiscal Cliff: Absolutely Everything You Could Possibly Need to Know, in One FAQ. In that post, it describes the “fiscal cliff” as an “inapt metaphor for the looming consequences of some very bad congressional decisions,” further clarifying it as
“much too much austerity, much too quickly.”
At its simplest, the fiscal cliff is a combination of taxes, government spending cuts and a debt ceiling aimed at reducing the federal government deficit. It's universally accepted that it will have negative results for individuals and businesses alike. The Congressional Budget Office (CBO) projects it will weaken the economic recovery and possibly plunge the United States economy back into recession – retracting in 2013 by 0.5% versus the current projection of +2.4%, and spike the unemployment rate to 9.1% from the current 7.9% rate. Private sector analysts also consistently predict gloomy outcomes from the fiscal cliff, and it’s generally recognized that it will affect some industries more than others, but all of them negatively.
The uncertainty generated by this situation has been reported by CNBC as already having put the damper on the economy by suppressing stock prices and making companies unwilling to make the kinds of investments that drive employment growth. Since growth for most organizations is driven by some combination of consumer or government spending, I believe the fiscal cliff highlights the role that marketing can play for each organization to counteract its negative effects in some important ways. Here are some of the ways marketers can make it happen:
Find your true north
In the field of navigation, “True North” references the need to calibrate magnetic compasses based on the ever-shifting magnetic anomalies of the earth – without doing that, navigation is inaccurate. The same holds true for business – you need a clear point of reference to set direction amid great uncertainty.
One simple place to start is with a cue from brand management - validate how your organization’s mission statement fits with your customers’ experience. Are you in business to solve world hunger? If so, is that clear from the experience that individuals and organizations have while engaging with you? If not, it might be time for a closer look and some important changes. Taking such a brand management approach should span all areas of the enterprise that engage with the customer, with marketing as hub of the customer relationship.
I'd like to suggest one resource for "finding your true north" in this way - an e-magazine produced by the ANA for SAS, called Standing Out – Rethinking Brand Differentiation for Competitive Advantage.
Complete your 360° view
Once you’ve established your true north, complete the picture so you have a 360° view. Just as your true north should be centered on the customer, your view of the customer should be as complete as possible. An important way to accomplish that is by combining online, offline and social data about your customer that result in richer profiles and more meaningful segmentation that heightens the relevance of your customer engagements.
There is a great story about how national clothing retailer Chico's did just that in the white paper, Ten Ways to a Customer-Centric Data-Driven Business Strategy. You can read how they tripled their win-back rate of lapsed customers and achieved other amazing results with a total, multichannel view of each customer.
Chart your course wisely
As your organization becomes more adept at marketing analytics, it will become clear that some combinations of plans and actions yield better results than others. The keys are hidden in your customer data and can provide answers to two critical questions:
- Given the current objectives and corresponding constraints, how can we maximize the overall contribution of our marketing program to organizational growth and profitability?
- If we increase the marketing budget, what would the payback be?
The answers are found with marketing optimization, which applies marketing analytics to consider multiple possible scenarios and choose the one that delivers the best result – lowest cost, highest revenue, or however you define "result." I recommend this short, on-demand webinar produced by the DMA that outlines marketing optimization and provides some great case studies: Improve ROI with Marketing Optimization
One of the best examples of how marketing can make a big difference in the middle of a recession is the story of telecom giant Verizon. In the middle of the 2009 recession and while facing stiff competition and sweeping technology changes, Verizon boosted the revenue lift of their campaigns by 25% and improved their campaign close rates (sales) by 250%. They achieved these results in less than 3 months with applied marketing analytics and a 360° view of their customers.
As we face the fiscal cliff, these are all changes that can make a difference in how your organization weathers the storm. Embrace marketing analytics and the improvements can have a big impact across your organization. Let me close with a final suggestion - take a look at this article on MarketingProfs: Six Tips for Creating an Analytics-Driven Marketing Culture. The article was submitted by our VP of Marketing, Adele Sweetwood, and she provides the six practical tips from how SAS has implemented a marketing analytics culture.
In any situation, it's important to know all the variables that are within your control, and all of these suggestions are within reach and are proven approaches. Let us know if you're ready to get started. Until then, I welcome any and all comments and I always appreciate your sharing my posts with others or simply following this blog.