Based on what I observe with many of our clients these days, particularly the ones that are hurting the most, I wonder if, "Hard times bring forth innovation.” Clients in multiple industries seem more open to considering new ways of doing things, perhaps because the same old same old is simply not working anymore. Is it perhaps because they are so desperate, they will try anything? Having spent some time with senior marketing executives as well as general managers, I think the smart ones see an opportunity to actually use these hard times to implement ideas they have had for some time – so it may be a case of not letting a crisis go to waste. I have been very impressed by the fortitude and foresight displayed by some of our clients during these hard times.
What is the nature of this innovation? Not necessarily new ideas but, sometimes, it means executing old ideas that may have met organizational resistance in good times and gone nowhere. Earlier this week, I was with the CEO, CFO and CMO of a hospitality company, a luxury marketer that has been having a hard time this past year. Instead of cowering with fear, they are thinking boldly. This is a company that has traditionally taken a very traditional direct marketing approach with their guests - with little tie in to web strategy, the call center and other channels. Now, in a drive for ambitious growth, they are developing a whole new approach to the guest experience and letting customer insights drive this experience. Direct marketing is just one part of it. Building brand, better relationships with property owners, personalized experiences, better data that is designed to yield superior insights, are all fruits of the effort.
Such change would have been unthinkable in this company, just a year ago. Now, they figure they have nothing to lose. Business could hardly get worse.
Another client, one of the top three hotel chains in the world, decided to take a hard look at their marketing spending across the board – including, regions, brands, and channels. The CMO decided that they were spread too thin in their marketing efforts and eliminated some areas of spending completely, streamlined others and then invested a good chunk of the savings in key areas which he estimated would pay off in a big way if the investment exceeded critical mass. In some cases this meant huge increases in budget during a period of double digit revenue declines and huge bottom line pressures. One of the focus areas for investment was marketing infrastructure (technology, people, and processes) that would enable them to be smarter in building relationships with their most valuable customers and delivering a superb experience on property. They expect this to provide them a key competitive advantage in the future rather than continued spending on “me-too” type loyalty and rewards program.
Innovation does not always have to mean new ideas. Dusting good ideas off the shelf and actually executing against them can also be innovative, particularly in hidebound organizations. Hard times are great times to push through changes that would not be accepted when folks (both employees and executive management) are fat and happy.
It so happens that both of these examples are in the hospitality industry, which has been hard hit by the downturn but we have other clients who are showing similar grit as well. We fully expect to see these companies emerging stronger when the recovery rolls around. If so, this nasty recession might have served at least one useful purpose.
Perhaps the hard times will be remembered fondly when the good times roll again.
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