Marketing and strategy consultant
For marketers working in the financial services sector, in the countries where marketer is a young profession (most of the post Soviet bloc, including Kazakhstan), the unfolding 2008-2009 financial crisis which has already been called one of the worst in history and compared with the Great Depression, is the first crisis in their careers. Marketers are facing slashed budgets, redundancies, bankruptcies, drying up of once abundant funding and even the most reliable of financial institutions trembling under weight of past competitors going down and pressure from investors and creditors who are losing hope.
Various questions come to marketer's mind. What's next? How to protect brand and sales when your budget has been slashed or is nil? Stay in the financial sector, and if not, then which sector to choose? Financial sector is not expecting any good in the next 1-2 years around the world. In such environment, FMCG companies, not for profits and governmental sector turn out to be most stable for marketers. People always have to eat, drink and follow personal hygiene. Not for profits exist on grants and subsidies. However not sure if there are any marketing positions in our government. Some marketers working in the financial sector may decide to at all change their occupation - in the UK, for example, government is going to introduce a programme where redundant bankers will be trained into teachers.
On the other side, the role of the marketer in the company and whether s/he can help their company during crisis depends on their professionalism. Crisis is the best business school, best training that any marketer can have. It's exactly during crisis that it becomes clear which business model is based on which goals - short term dust in investors' eyes and quick sale, or long term stable growth and reliable products. It's exactly during crisis that it becomes obvious which products do actually deliver customer value and which marketing and sales teams are most professional. Selling during boom is easy, but only professionals can sell during crisis.
As any marketer would tell you, good marketer can sell anything. Main thing is to know basic principles and understand consumer phychology. That's why a good marketer will always be in demand. In financial companies in Kazakhstan, even if there are professional marketers, they rarely take part in strategic decisions. Finance guys are the ones ruling the ball. Hence, basic marketing mistakes are made, such as radical advertising budget slashes, panicky price increases, cut of investment into product development, etc. While the company is going through turmoil of extreme decisions, its consumers take a decision to stay away. Or not to ever come back. As a result, sales fall. This is how financial brands and companies vanish into non existence.
So which principles are the professional marketers working in the financial sector using to help their companies to overcome crisis and come out of it even stronger than before (i.e. with larger market share)?
First of all, professional marketer knows that crisis or not, client is the priority. It's important to stay close to the client during crisis, communicate changes and avoid unpleasant surprises (hidden fee increases or terms and conditions change not in favor of the client, for example). Like a good dentist who explains every next step, good marketer not only stays in touch with his/her customers during crisis but strengthens the relationship, by communicating the changes, and continuously educating the customers on how financial products can help them weather the crisis and save or avoid negative consequences.
Second, professional marketer knows that crisis is not a reason to not meet the sales targets, and though crisis can affect performance negatively, smart marketing strategy may actually lead to exceeding pre-crisis results. During crisis, financial services consumer is looking for reliability, brand that can be trusted, and also simple and easy to understand product solutions which are easy to buy. In terms of sales and advertising, direct marketing methods (direct mail, direct sales, interactive, etc.) get prevailing importance. Direct marketing in financial services is more effective than traditional advertising because when implemented right, produces immediate results. Main thing is not overdo it and remember that excessive marketing communications can be perceived by customers as sign of unreliability, and that communications of a brand with low awareness or unclear preferences (as a result of insufficient information) are unlikely to cause trust.
Third, good marketer knows that if s/he wants to get a campaign budget, their top management will need a clear business plan. In many companies, the reason for marketing and advertising budget cuts is mistrust to marketers who spent funds in the past but without showing results. Each good marketer has a strategy for at least a year, and clear cut financial calculations for each campaign - what is its goal, how many prospects will be reached, how many of them will purchase a product, how much the campaign will cost, and how much will acquiring one client cost in the end. And of course professional marketers do not just use calculations for getting the budget. They are checking with their business plan on a regular basis, correct it, i.e. use it for day to day planning. If we sold less than we planned in May, for example, why did that happen? What do we need to correct in our strategy in June? Does it mean we need to recalculate the campaign budget and the total budget? etc.
Fourth, professional marketer knows the value of partnerships. During boom working with suppliers and partners is easy. However during crisis it becomes important to keep strategic partners, approach payment terms on a mutually flexible basis, resolve potential conflicts, exchange additional benefits. For example, when budgets are cut, marketer may decide to significantly decrease volume of orders from advertising agency. But s/he can also work together with the agency to look for options of work optimisation until crisis ends. Ending work with the long established partner or, even worse, part with a conflict is a sign of unprofessionalism.
Finally, every good marketer knows that all crises end at some point. They know they have to think strategically and long term, crisis will end, and one has to remember this working with customers and partners and when taking strategic decisions.
Good marketer also knows that crisis is an opportunity. During crisis weak and unstable companies who are panickily slashing budgets or inflating prices go, while those with the well thought marketing mix will emerge with larger market share. From the analysis of product offerings and advertising of the banks, 2009 will be the year of the small banks in Kazakhstan.
While competitors are losing precious market share and clients are running away from their panicky actions, a strong market player has a rare opportunity. Who realises this opportunity on the Kazakhstan's financial services market next year will show whose business model was most sustainable and where truly professional marketers work.