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2023 is expected to be a tough year for everyone. Companies have already scaled back programs, cutting funding for both line and staff organizations, especially marketing. This is different from what is typically taught in introductory level business courses. That means cutting back on marketing in a recession increases the damage to revenue in a recession. Companies that spend more instead (combined with strong execution, of course) are more likely to gain share and survive the event than their dumb peers. This may seem counterintuitive to engineers who tend to think in terms of direct action/reaction. Marketing functions work more instantaneously.
Let’s talk about why you don’t want to cut marketing in 2023.
Marketing is not voodoo
Marketing is often poorly understood in technology companies with a large staff of engineers. Engineers understand sales and generally get as far as finance and HR (although too many engineers, especially when it comes to misogyny, take HR duties as a proposition). But marketing often seems so ignorant about the subject that executives want to discuss it as if they were experts. If there’s one area in tech companies where he’s proven the Dunning/Kruger effect in spades, it’s marketing.
As a result, what should be one of the most powerful weapons in a tech company’s arsenal is often the weakest. Underfunded, often staffed with poorly trained personnel, and treated like some kind of necessary evil, marketing tends to decline even in the good years of technology.
Marketing creates demand for a product, creates and maintains a company’s image, protects a company’s reputation, and ensures consideration for a company’s products. Companies can and do thrive without marketing, but they can’t handle image issues (we’re seeing this in real time with Tesla and Musk). non-Apple consumer markets) and cannot protect CEOs in times of crisis. Marketing has the greatest ability to protect a CEO’s job by taking advantage of mistakes made.
As such, marketing is often the most powerful weapon and also the most powerful defense against a hostile world, yet it is always underfunded because most management doesn’t understand it.
marketing in the downturn
Realizing that marketing dominates a company’s image and creates demand for the company’s products, we find that marketing disparities in both funding and execution can lead to significant shifts in market share. increase. When Apple went against the smartphone market at the time with massive marketing and sapling campaigns, the dominant companies were unable to defend their solutions due to their lack of marketing ability. Worse, they didn’t defend their position at a time when smartphones were supposed to be business-centric, not entertainment-centric, and the market shifted to Apple models, effectively wiping out BlackBerry, Palm, Nokia, and LG. and pushed Microsoft out of the market. segment.
In a recession year like 2023, the overall available market will shrink. That means less money and fewer potential buyers for your product. If everyone cuts demand generation in their segment, things get worse when other segments keep or increase their spending. Because money follows successful demand-creation efforts. If a few or one vendor spends more and performs (doing is as important or more important than spending), they gain share and lose money to another competing segment versus a segment that may be better protected against
For example, in a good year a consumer may be able to afford both a new car and a new washing machine. In a bad year they will have to make a choice. Industries that do their best to build demand are more likely to have their products win. Same between companies. If you’re thrilled to see ads and placements for Motorola’s new phones while Samsung cuts marketing, you’re more likely to buy Motorola than Samsung. should beat Samsung in terms of
This is a difficult decision because while it is politically difficult to spend more in one area, especially in staff departments such as marketing, it is still the right thing to do.
summary.Phantom
It reminded me of a story told by the late captain of the Windjammer Ship Fantome. I got on her before she sank. The captain told this story on the first day of the cruise.
Prior to joining Windjammer, Skipper was a cruise line captain. He was docked at a right angle facing his one of his old cruise ships. As a sailing ship, Fantomé set sail in full sail to show off and put on a spectacular show. However, since she is a warship, she has battleship-level armor, so if you ram a cruise ship, you can cut through her butter with a hot knife. This quickly became a problem. Because the third mate, who had released the foresail to move the bow and missed colliding with the cruise ship, was instead chatting with some passengers in the galley. Given that the ship was aimed at the midsection of the cruise ship to increase its impact speed, and that it also had several military-grade engines, the captain had two viable options.
He was able to order a full astern that slowed the ship down enough to create a hole the size of a house big enough, but not enough to sink both ships. You can let it drop and miss contact, but even then a hit at that speed will sink the cruise ship in half (Fantome’s bow is designed for ramming).
He ordered flank speed. I grabbed the rudder, but not enough to miss the collision, but the Phantom turned just enough to take a hit. Both ships were saved, although the Phantom’s massive oak mast broke off, creating large scrapes along the sides of the cruise ships. His career survived, but the third mate did not. He even got a free cruise on his old line to show his appreciation for not sinking the ship and understanding that shit happens.
CEOs are often faced with decisions like this. Do you mitigate the damage? Or do you tear down the barriers with the belief that your team will take action and turn the coming disaster into an opportunity? The few people who commanded you to speed in the face, spit, and run (the run part is important, otherwise this move would be suicidal) are like Steve Jobs. will be remembered forever. Similar moves on his iPod and his iPhone.
Usually the story ends there, but Fantome has more. Years later, the captain had another choice to make. Mooring your ship during a major storm, or putting it out to sea to try to survive the storm, increasing your ship’s chances of survival but risking your life. Risk comes with consequences. But that doesn’t mean you should avoid risk. Recognize when they become irrational. And finally, please understand that women’s luck may not always be on your side.
I have a few things to think about during the holidays. I wish you all a wonderful Christmas and a wonderful New Year!
As President and Principal Analyst of the Enderle Group, Rob teaches how to create credible conversations with the market, target customer needs, create new business opportunities, anticipate technological change, and select vendors and products. , and provide guidance to local and global businesses on how to go for zero dollars. marketing. Rob has worked for over 20 years with companies such as Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM and Siemens.
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