“Doing more with less” has become today’s business mantra. It’s not a matter of battening down the hatches to get through the latest recession; in our volatile and unpredictable world, smarter working now has to be “business as usual”.
In reality, of course, doing more with less is a fallacy. The result would be to spread financial and human resources so thinly as to be counter-productive. What’s required instead is ruthless focus on those things where you can really make a difference – and, for marketers, the customer and the core brand idea have to be at the heart of this strategy.
“Focus and singularity about what you are and what the customer wants makes it a lot easier to prioritise and be effective,” says Amanda Mackenzie, chief marketing and communications officer at insurance giant Aviva.
And there is an important distinction to be made between efficiency and effectiveness, says Les Binet, European director at DDB Matrix, a consultancy that measures the impact of marketing communications on business results.
Efficiency leads to diminishing returns and effectiveness maximises profits
“Consider two alternative marketing plans,” says Mr Binet. “Under Plan A you spend £10 million and make £100 million profit, giving you an efficiency ratio, or return on investment, of 10:1. Under Plan B you spend £1 million and generate £20 million profit, giving you an efficiency ratio of 20:1. If you were pursuing the efficiency approach, you would go for Plan B, despite the higher profits generated by Plan A.”
Thus, efficiency leads to diminishing returns, says Mr Binet. “Effectiveness – maximising profits – is far more important.”
So how does a cash-strapped marketing director maximise profits? It boils down to quality and creative thinking.
“You can’t underestimate the sanctity of a great idea,” says Tim Pile, chief executive of marketing agency Cogent Elliott. Paul Walton, co-founder of marketing agency The Value Engineers, agrees. “You also have to find new ways and places to communicate your idea. You have to out-think rather than out-spend the competition,” he says.
Social media has an important role to play in augmenting traditional marketing and corporate communications, but relying on it exclusively as a sort of panacea for reaching your target audience at low cost is a dangerous strategy, warns Mr Binet. Nevertheless, some brands do use it in ways that appear to be highly effective, because they have a carefully thought through approach.
US domestic blender company Blendtec, for example, has been catapulted to fame and fortune through an original viral marketing campaign – “Will It Blend?” – featuring its chief executive Tom Dickson. Mr Dickson demonstrates the superiority of the blending technology by putting items, including a skeleton, an iPhone and a car, into his blender. Over the past five years there have been around 200 million views on YouTube and sales have increased 700 per cent.
Other companies get too bogged down in bureaucracy. Mr Binet says: “Some clients are so paranoid about not wasting money on poor advertising that they waste vast amounts on processes and research. They test ads and strategise to the nth degree, and produce nothing that affects their sales. On both the client and agency side, people with intuition, who can spot good creative work and get to an answer quickly, are worth their weight in gold.”
Investing in the best people and the best ideas may be expensive, but can increase the effectiveness and efficiency of marketing, he concludes.
Some brands have never had much money to splash around. Divine, the Fairtrade chocolate company that is 45 per cent owned by cocoa farmers, has only 17 employees and a marketing budget in “the low hundreds of thousands”, according to communications director Charlotte Borger. But it punches above its weight thanks to a combination of close-to-consumer activity and the assiduous telling of its story.
“We did print advertising for a time, but could never afford to buy media on a scale that made it worthwhile,” says Ms Borger. It now focuses on collaboration with big brands. Divine was the official chocolate bar at last year’s Glastonbury Festival, for example, and O2 recently used a bespoke Divine chocolate bar to reward 450,000 of its customers.
“These sorts of activities give us extraordinary reach,” says Ms Borger, adding that Divine is also experimenting with social media. “We are a social brand, so social media is a good fit and it also allows us to tell what is quite a complicated story.”
At First Direct, the online and telephone banking service, necessity has always been the mother of invention. “We make our budgets work hard for us, and we’re also very ideas-driven, innovative and creative,” says Natalie Cowen, head of brand and communications. To this end, it works in collaborative partnerships with its agencies, most of whom are long-standing.
“Because they know us well, they ‘get’ the brand, which means we can short-circuit things. But we also have to make sure that we inspire them to come up with fresh ideas,” says Ms Cowen.