Will marketers rise to the consumer inflation challenge?
Covid presented a test that could be matched by the current record levels of inflation we face, but there is a way through it
23 May 2022
If ever there was a time to demonstrate the importance of marketing, this inflation crisis is it. The Bank of England has forecast that inflation will top 10 per cent this year and consumers are cutting back; marketing will be a key determiner of which brands weather the storm and which brands seal their demise.
This is an opportunity for smart, creative marketers with a solid grounding in the strategic not just tactical levers of the discipline to fully prove their value in the corporate boardroom. Less well-equipped marketers, though, might find their toolbox rather limited.
There was a time when marketers were schooled in the 4 Ps: product, price, promotion and place. Not so much these days. Promotion – and performance-based promotion – is the main focus of so many marketing roles. We probably shouldn’t be too surprised by that; the tech giants like Meta and Google have invested an awful lot of time and money over the last decade or so tutoring a new generation of marketers in digital marketing and its efficient tools, and too many young brands have effectively out-sourced their marketing training to these platforms. It’s no wonder if their marketing teams see their role as predominantly performance-based digital comms, and measure success by sales volumes rather than margins and profits.
Apparently many marketing departments aren’t even at the table right now when their companies are working out how to deal with spiralling costs from their supply chain and what can be passed on to consumers; they’re simply being told to cut their own costs.
So these marketers are pulling on the easy levers they know and understand - cutting ad budgets and putting the squeeze on their agency partners. But this is the time to put that emphasis on trust, reassurance and certainty as brand differentiators. And to lean on your agencies as critical partners in your mission to defend and grow sales without matching bottom-dollar prices.
Most senior marketers are telling us that while businesses are putting customers under a microscope, their customers are, in turn, examining them more closely than ever. As one CMO of a tech-led brand said to us recently: “My priority now is to focus on value. Creating, generating, communicating the brand value for my business. But I need to find the new breed of marketers who understand the concepts of brand building, creative excellence and who aren’t just using the language of data and technology to hack away at the very things that underpin premium pricing and give us some room to move prices up in line with costs.”
But as our Creative Marketers series continues to remind us again and again – strategic marketing insight, with the right tools, the right mindset and the right partners, will figure out how to meet short-term challenges without compromising long term brand value. We thought Covid was our generation’s big test, but inflation adds a whole extra complexity to the marketing challenge. It’s time to show what marketing can really do.