A Time for Reflection
While retailers lament that holiday sales are still in the doldrums, retail analysts note that, this year, the economy is not the only reason for consumers to hold back. Rather, it is a lack of innovation. Other than Zhu Zhu hamsters, there are few must haves for this holiday season. The analysts note that “Cash for Clunkers” recruited consumers for auto dealers in the midst of the recession. Likewise, iPhone sales continued strong. Meantime, the Financial Times reports on the rise and fall of MySpace, and though the settings are different (notably MySpace went through a huge culture shock with the acquisition by News Corp.), the lessons for marketers are very similar.
One, tough times are not a good reason to stop innovating, which inevitably involves taking risks and, just as important, making innovation the top priority. Typically this means putting innovation ahead of short-term profits. Zhu Zhu pets come from Cepia, a relative newcomer in the toy business. The MySpace story is more complex, but the first parallel is the focus on making numbers (revenue promised to Wall Street pushing managers to make decisions that compromise customer experience). I’ve watched and experienced this irony many times in my career. Anytime profit is put ahead of customers, customers go away and so does profit.
Two, take your eye off the ball and you can expect competition to take it away from you. In many ways, it is hard to expect innovation at a time when companies, especially the smaller and medium-sized businesses, are struggling to stay afloat. And in the case of MySpace, chairman Rupert Murdoch had a huge distraction—the all-consuming acquisition of Dow Jones, the company that owns The Wall Street Journal.
This all goes to say that in our business of marketing and communications, good ideas come first, budget cuts and poor economy notwithstanding. And if we believe that a smaller budget means doing less, which means thinking less, we are conceding to competition who are willing to think harder and work smarter to get more accomplished and make a bigger impact with less.