Is today's economy the "new normal"?

By on Wednesday 23rd September 2009

Categorised as: Marketing, Strategy

enjoy capitalism Is today's economy the "new normal"?Picture by Jacob Botter

I recently debated this question with some exciting Brighton digital businesses via the MDHub 100 network.

So what do I think the answer is?

Well, undoubtedly the economic downturn has certainly changed e-commerce and digital marketing, which are areas I think about daily. I believe at least two key changes are here to stay:

Offers have changed consumer purchasing behaviour

Back in May, fellow Cubeworks Director, Simon Booth, gave his thoughts on digital marketing trends for the recession and one of the topics was generosity. In particular, Simon talked  about how companies were increasingly using voucher code websites (like www.vouchercodes.co.uk) to publicise offers. A recent article on voucher codes by the Brighton & Hove Economic Partnership confirmed what we suspected. There has been a staggering 47.5% increase in web searches for voucher codes in the past 12 months with retailers and restaurants benefiting the most.

With consumers hunting down bargains, this has increased general awareness of the availability of voucher codes. In turn, savvy businesses – like the Cubeworks perennial favourite, Gourmet Burger Kitchen – have made voucher codes a key part of their marketing strategy. In turn, this has helped fuel consumer demand for voucher codes. With restaurants fighting for our hard-earned cash at the moment, a bargain-hunting diner can simply hunt for the best offer and base their restaurant choice on who is offering the best deal. That’s certainly what I’ve done on more than one occasion lately.

Given that switched-on businesses are reaping the benefits of this strategy, it seems very unlikely they are going to turn their back on voucher codes, even when trade picks up. So expect the importance of ‘offers marketing’ in businesses’ marketing strategies to keep on increasing.

Tight business marketing budgets have shifted focus

With the purse strings being tightened by many businesses, and the marketing pot being particularly effected, there has been a keen focus on ways businesses can market themselves more effectively while spending little. I’ve lost track of the number of articles I’ve seen in recent months with low-cost marketing tips – with Twitter usually being touted as the channel to consider most.

As with voucher code usage, what this focus has brought about is a new awareness by businesses of how to do things differently. Digital marketing is no longer the sole domain of marketing and web agencies. The tools exist for businesses to manage marketing, advertising and customer service themselves – Twitter accounts, Google Adwords, Survey Monkey to name just three. Of course, this doesn’t always mean that it’s a good idea for businesses to manage everything in-house as some well-publicised social media disasters attest to! Devising successful digital marketing strategies  is where the experience of digital agencies still plays a key role, but I suspect the day-to-day management will increasingly be brought in-house.

Sure, this increased awareness of what can be managed in-house was probably inevitable at some point. But there’s nothing like a recession to sharpen business leaders’ focus and ensure every penny is delivering ROI, and this has accelerated people’s awareness of the possibilities. Overall, I believe this is great news for businesses but also good news for agencies like Cubeworks. We want our clients to be aware of what’s possible, and be asking us for advice. It just means we have to make sure we evolve our capabilities so we can stay one step ahead, which we’re doing. But that’s our job as an agency – to make sure we stay that step ahead – so I’ve no problem with that. However, clients or agencies who are standing still right now could be in for a rough ride ahead.

Have you any thoughts on other aspects of the economy and how you think they are changing forever? Or have you got more examples of how the recession is changing the digital space? I’d love to hear your views.

Follow me on Twitter (@alexcowell)

  • http://www.theeconomicadvisor.com Stacey Derbinshire

    Nice writing style. I look forward to reading more in the future.

  • http://www.cubeworks.co.uk Jesse

    Interesting article!

    We in the UK seem to be lagging behind on discount voucher codes for use during online checkout. The US has been strongly into these for years now, way before the current recession. I noticed these spreading by word of mouth in forums like the camera review site http://www.dpreview.com. Now it seems we are seeing a more centralised effort with the business itself in control.

  • http://www.twitter.com/faithyj Faith

    I think the user’s perception is often that they are getting a cheeky deal, but sites like http://www.myvouchercodes.co.uk are actually controlled by Affiliate Marketing networks and are massively putting the business in control. I wonder how long until the consumer cottons on. I expect when they do this will help enforce this approach as the norm, rather than a recession fad.

  • http://www.businessblueprints.co.uk Helen Bailey

    What is incredibly interesting is the change in attitude to discounts that has not been seen before, in over 20 years of owning, marketing, researching and advising restaurants. The new cool is to use a discount – even on a date! In recent research we conducted, 97% of regular restaurant visitors claimed to use a voucher when they dined, 50% of those used one on every single dining occasion. People are choosing where to dine based on where the discount is rather than the food! You can now afford to trial somewhere new to eat that you did not wish to risk before. The key point for me is giving discounts at the moment is exactly what the customer wants and needs to get them out shopping and eating. Ensuring that you always respond to your customer’s needs is critical for surviving. This could not happen at a better time – when a lot of the tools you need to listen and interact with your customers, as Alex mentions, are available cheaply or for free – all you then need to do is interpret and respond accordingly! Maybe this is the “new normal” listening and giving your customers exactly what they want, when they need it, more than ever before!

  • http://www.cubeworks.co.uk Alex Cowell

    Thanks for the comment Helen. Great insight into how offers are affecting the restaurant market.

    Social media, where the conversation is happening about your brand whether you engage or not, is undoubtedly forcing B2C businesses to sit up and listen to their customers. Those who don’t give their customers what they want will simply lose out to those that do.