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Pricing and value strategies to take on big brands during a recession and beyond

The marketplace is facing a never before seen combination of high inflation and recession-like conditions, so it’s no secret that small and big brands alike are weathering a tough economic climate. However, because increasing input costs are driving the need for increased pricing in order to maintain profitability, smaller brands are getting hit harder. As a result, they need to pivot their pricing and value strategies in order to stay competitive and relevant.

In the fourth installment of our interview series, ReveNew, Keen CEO Greg Dolan sat down with Bill Mayer, executive-in-residence at the private equity firm of Warburg Pincus, to discuss why thinking beyond the recession when making spend decisions can help smaller brands drive long-term value and better position themselves for future leadership opportunities in the market. 

Here are three big takeaways you don’t want to miss.

Understand how and where your dollars are working

Inflation costs have hit everything from raw materials to transportation wages to SG&A. And, because it has been so widespread, where marketers have looked to other solutions in the past to try and cut costs, such as ingredient swapping or package downsizing, they must now also use pricing action to come close to maintaining margins.

Smaller brands do not have the same scale and leverage with retailers as a lot of the bigger brands nor do they have the elasticity models, which can make it difficult to justify price increases. But ultimately, they need to walk in with the same data that shows strategic steps they are taking to offset these issues and that includes looking at things from a cost or procurement perspective (less transport volume, more automation, etc.). Decision makers also need to start paying more attention to the non-working dollars as they build out their strategies in the face of certain budget cuts. 

Pricing action is going to happen, but in addition, marketers should look at costs and change how that spend actually works from a cost perspective. The bottom line is you need to really understand your spending and whether or not it is working in the right way for your brand. Because if you don’t understand that, then what you are really putting your dollars against may not be generating the type of returns you’re looking for.

Use data to spend your money in the most effective channels

The problem brand decision makers face is threefold: maintaining shelf presence while also maintaining costs and some kind of trajectory in terms of revenue growth. It’s necessary to look at the effectiveness when considering where each of the spends are going and how you can quickly test, learn, and adapt for where you might want to go. And then, once you have the testing and data honed to support the business, it essentially comes down to being flexible and willing to shift your investment into those arenas while maintaining the agility to pivot as needs and situations arise.

Brands must also take into account the shift in the customer journey as people look not just across platforms but in them as well, and what that means for their strategy. Marketers need to have the chance to move across all of the platforms and decide whether or not they want to have their brand working there. The key will be understanding what those returns are giving to you by channel, and then really trying to push the overall media working dollars towards those places as quickly and as collectively as you can.

Your margins will ultimately impact how much you can spend behind the business. Then it’s about making sure you are spending that money in the right way. A big brand generally has a lot more to spend, so they can put their bets across a lot of different places. But a smaller brand typically has to be more selective and careful. And because they can’t afford to be wrong, a little bit of spend to support a system that can give them the right answers with confidence is crucial.

Consider your value beyond the recessionary market

In a lot of ways, some of the smaller brands are the ones really trying to drive innovation in the marketplace. There are varying estimates of how long this recessionary type environment could last, but pulling back on certain investments means that you are potentially ceding strategic leadership by driving the category to other competitors. Smaller brands recognize this and are trying to invest as best they can as long as they can afford to do it, because they’re usually the ones disrupting the categories.

Companies are going to find themselves in a better competitive position when the economy recovers if they maintain their spend, investment, and R&D innovation through difficult periods. This holds true for businesses of all sizes. If bigger brands pull back and there is a strong number two, or some of the smaller brands now have the ability to get a higher share of the voice, it could be problematic in the post-recession market. Essentially, whatever your position, it’s imperative that you think about forward trajectory because not doing so may wind up seeding leadership to someone else while doing so could create a new opportunity to lead.

As brands are trying to justify price increases and stay relevant to a consumer, the conversations being had are going to center more around value than they have in some time. Even premium brands understand that a certain gap has to exist between competitors and private labels in terms of where you are on the shelf, and not being in that range will hurt from a demand perspective. Being able to communicate the value relative to the price is going to be crucial. Especially because the retail brands and private labels will most likely grow share over the next couple of years at the expense of brands.

Make decisions now that drive long-term value

Though daunting, this is a time period that will pass, and how you invest now will set you up for what comes after. In a lot of ways, what you do could make or break where you’re going long term, so you don’t want to be shy, but prudent. It’s necessary to know where you’re investing and make sure you understand the returns. 

For brands to continue to operate–and hopefully grow–in a difficult environment, make sure you’re continuing to invest–to build the business, the brand, the equity that you’re going to need. And also continuing to invest in how you’re going to differentiate yourself in the marketplace, and how you’re going to grow your category and focus on continuing to be a leader. 

Having a strong brand in this market is going to lead to the equity that gives the pricing power that helps maintain the margins, and gives you all the dollars you need to invest. But you don’t have to be a big business to make this happen. By pivoting some of their pricing and value strategies and providing data that demonstrates their return on every dollar invested, smaller companies can still position themselves as big players in the marketing world, both through the recession and beyond.

Keen to learn more? Check out the interview here.

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ReveNew: Pricing and Value Strategies to Take on Big Brands During a Recession and Beyond

ReveNew: Pricing and Value Strategies to Take on Big Brands During a Recession and Beyond

In this episode of ReveNew, Keen CEO Greg Dolan and Bill Mayer, executive-in-residence at the private equity firm of Warburg Pincus, talk about how small brands can stay competitive with bigger companies through tough economic times by pivoting their pricing and value strategies. Plus, they discuss why thinking beyond the recession when making spend decisions can help smaller brands drive long-term value and better position them for future leadership opportunities in the market.

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How to effectively implement and support change in marketing strategy

The old approach to making marketing decisions was fairly uncomplicated, and essentially consisted of investing money into traditional channels such as broadcasting, print, and direct mail. However, the rise of the digital era in the early aughts ushered in a new normal with an explosion of digital channels that quickly started to take prevalence over the more traditional ones and disrupted the marketplace. As a result, the evolution and complexity that has emerged in marketing, the environment, and across media has brought a series of new challenges to brand managers and organizations.

In the third installment of our interview series, ReveNew, Keen CEO Greg Dolan sat down with Liz Mayer, partner, omni-channel commerce at The Partnering Group, to discuss why putting strategy before structure is fundamental when thinking about shifts in company organization in an age of disruption.

Here are three big takeaways you don’t want to miss.

Build a clear, actionable plan

One of the most rapidly changing spaces in the marketplace is that of retail media–both in terms of its emergence and the amount of budget dedicated to it. Most CPG companies have relatively mature shopper market organizations that are used to doing their own thing, meaning many of those teams report to sales and not brand. But with the emergence of retail media, not only are the tools, targeting, and capabilities within the retailer space (and shopper marketing teams) enhancing, you also have the digital shelf requiring brands to think differently about how they build. So the scope of brand management is also changing and decision-makers need to spend the same energy (if not more) on their digital presence as they do on their packaging, or physical, in-store one. 

Implementing organizational change involves a lot of moving parts and can be difficult to navigate and execute without a cohesive understanding of the strategy driving it. By putting strategy before structure, companies can align on big questions, like where and how they want to grow in the future, which facilitates a smoother transition. Because ultimately, when you’re clear on the work, then you can be clear on the jobs needed to be done, and then you can be clear where the strategy needs to evolve. 

Change management, or transformation, always requires a level of transparency and context. First, in making certain that senior leaders understand and embrace where they are (and aren’t) in relation to their ambitions and ability to remain competitive; and then, in ensuring these leaders are equipped with a roadmap to transform. From there, it comes down to galvanizing support for that agenda through the organization and making sure individuals have a clear understanding of what the change is, why it is happening, and how it will impact them.

Get a holistic view of your organization

A good portion of how a brand shows up digitally is related to how they’re leveraging their retail digital media and ensuring they have a holistic approach to their business. In essence, there is no lower and upper funnel anymore, but rather a robust commerce ecosystem. So organizations have to shift from segmented efforts to a holistic approach and move beyond seeing retail media as a tactical element to how the properties and engagements within those spaces (i.e., Walmart or Target) are working in relation to how they could be working somewhere else (i.e., NBC Media).

It can be difficult to have a unified approach to your marketing strategy when the budget is separated between sales and the CMO with different teams reporting to different leadership–especially now, with new distribution channels and a booming e-commerce. To be successful in today’s landscape, marketing organizations need to understand their business from a customer and category perspective as well as how they want to engage with their shoppers, and bring those together to make the right decisions. This requires different ways of working, different strategies, and ultimately, different tools and resources.

At times, it can feel like big retail media has all the leverage over CPG brands. However, marketers have the chance to take some back in the relationship by using data at the holistic level to justify spend and use every dollar to its full potential. Employing an omni-channel approach is key to making this a reality. To have a holistic view of your marketing mix across different channels, you need to be more agile and sophisticated with measurement–and have the tools necessary to look across the board and know what dollars are going to be working the hardest and where to best support your business growth goals. Otherwise, you’re essentially wasting money.

Maximize value with an omni-channel approach

For many brand managers, the focus always comes back to what you are trying to achieve as a business and how to best leverage the dollars available to you to reach your goals. Again, an omni-channel approach is going to provide the best perspective on how all the dollars work together and halo off of each other. This visibility into interaction effects is a crucial piece of the puzzle.

Having an omni-channel approach requires some cross-pollination between teams because you need marketers that understand sales, marketers well-versed in the digital shelf, and then you also need shopper marketers to understand media. It’s critical to ensure anyone who is having touch points with the customer, shopper, and consumer ultimately understands these fundamentals at all levels.

When talking about change management, the formal competency training is critical, even at a foundational level, because it makes the business decisions and strategic implementation that much better. It also allows you to continue to develop the talent in accordance to where you want your growth to come from and where your business goals are at. And when talking about retail media in relation to structure, one of the main principles is to ensure you have an end-to-end integrated marketing organization with the competencies to understand both in-store and digital. 

Don’t be afraid of change

There is no optimal structure when it comes to managing retail media and being able to support the business holistically. It ultimately depends on several factors, but one of the obvious ones is the size of the company. While some brand managers may think along the lines of, we’re too big to change or we’re too small and don’t have the resources, these perceived limitations can actually be enablers as long as you are clear on your strategy and where you are going to win. 

The more siloed, complicated, and matrixed structures are, the harder it is for companies to support retail media and other emerging spaces because there are so many different touchpoints. Alternatively, the more integrated the strategy, activation, and ultimately, the measurement within an organization, the better the results. Essentially, when it comes to effectively implementing and supporting change in your marketing plan, it comes back to strategy and the structures. And from there, staffing and getting the right talent on board to be able to deliver the strategy that will help your business reach its growth goals. 

Keen to learn more? Check out the interview here.

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ReveNew: Overcoming Big Retail Media Leverage Without Increasing Costs

ReveNew: Overcoming Big Retail Media Leverage Without Increasing Costs

At times, it can feel like big retail media, such as Walmart, has all the leverage over CPG brands. As budgets tighten, marketing leaders are left to figure out how to produce the same, or better, results without spending more money—and sometimes making it work with less. Greg Dolan and Liz Mayer discuss how brand managers can hit their goals by changing their spending approach and shifting their focus on a few key areas. Watch this clip to find out more!

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ReveNew: How to Implement Change in Big CPG Brands with Liz Mayer

ReveNew: How to Implement Change in Big CPG Brands with Liz Mayer

Driving organizational change can feel impossible for leaders, but it doesn’t have to be that way. In this clip from our interview with change management expert Liz Mayer, learn how to build a clear, actionable plan to lead your team to success and the components you need to get there.

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How to troubleshoot common challenges in the current recession

The pandemic ushered in an economic climate like no other in recent years, and with it came a unique set of challenges for marketers. Brand managers are being asked to meet expectations and still grow with limited resources as budgets are being cut across the board. And the evolving role of data and advanced technology platforms in driving future marketing plans continues to increase.

In the second installment of our interview series, ReveNew, Keen CEO Greg Dolan sat down with Cesar Brea, partner at Bain & Company, to talk about common knee-jerk reactions marketers make during recessions and why they are bad for business. They also discuss the impact of supply chain, labor, and inflation challenges on marketing decisions. 

Here are three big takeaways you don’t want to miss.

Find your bottleneck

While previous recessions have often involved demand and unemployment problems, unprecedented factors like the pandemic and War in Ukraine have impacted the current economy in new and different ways. An increased inability to source products has contributed greatly to supply chain shortages and the labor problem is twofold–not only finding potential recruits, but also being able to pay the salary they demand. With inflation, things are more expensive but people have less disposable income, and this collection of challenges is hitting us in new ways.  

It’s less about cheap capital, low interest rates–and knowing you could be profitable with some support–and more about execution, or making sure you don’t waste money. Essentially, it’s about selection, and being precise with regard to the opportunities you choose to pursue. And knowing you can have success with these specific products and customers because the supply chain, labor, and price dynamics are such that people are still demanding in those sectors.

In today’s landscape, it’s essential for marketers to know their purchase paths and be able to identify bottleneck areas along it. If you have a conversion issue–whether it’s a technical, economic, or price issue–it doesn’t make sense to keep pouring money into the engagement and awareness buckets because you’re not converting that traffic. And in a recession,  that is going to do damage to your brand and bottom line. So the best case is to know where your bottleneck is and shift your attention, spending, and solutions to that place in the path.

Campaign optimization is key

When faced with unprecedented challenges, it can be difficult to know which key levers to pull in order to address them. Oftentimes, marketers’ knee-jerk reactions are to make sure search engine marketing is performing effectively or to pull the promotional optimization lever, which are both important to efficiently harvest near-term demand. But the foundation to any good solution actually starts with an accurate identification of the problem you’re trying to solve.

Identifying the objective of your business based on what environment you’re in, and then being able to have the data and information to understand what’s impacting your business and why, will give you a better understanding of what to do. Not having that clarity of understanding can lead to impulsive decisions, like cutting all the spend, moving money into the wrong buckets, or optimizing in the wrong direction from a creative perspective.

Reorganization and full integration can be intimidating, so it’s smart to look for the practical thing you can do. One value opportunity is campaign optimization, which requires a certain degree of information integration. This means bringing together data and people that don’t often experience high levels of engagement, but doing so at a slower, more collaborative pace than suddenly shifting the existing structure. Having this ethos of lightweight integration, both organizationally and data-wise, is key in getting your brand through the recession. 

The evolving role of technology

The value of coordination and cross-functional collaboration is undeniable when it comes to making marketing decisions from a holistic perspective. But so is thinking about the evolving role of technology. As data becomes more organized and access to platforms with the ability to analyze and leverage machine learning to optimize decisions more available, marketers will be able to see results more quickly and  action them through a more agile organization. This will, in turn, help support quarterly and yearly initiatives and goals, and ultimately lead to a higher ROI.

Some of the latest machine learning technologies enable us to more efficiently generate the content we need to support experiments that aren’t possible from a traditional, manual approach to content creation. Marketers can feed the tech content and it comes up with automated or AI authored images or videos. And, if you can take text and create images, you can also evaluate images, extract metadata, and do automated tagging, which might find new dimensions to describe content that creative taxonomies haven’t anticipated or emphasized. This, In turn, creates new optimization opportunities.

Technology is a major player in the field of marketing. The ability to be agile in leveraging data at a granular, localized level is paramount to drive the business forward. In fact, some CMOs would like to see the majority  of team decisions made through automated technology and data. This means content optimization or deployment of resources and investment across channels could all be fueled through data and advanced technology platforms that can continue to help the marketer learn as the future unfolds.

Plan for the future, today

In recent years, many organizations have begun making digital transformation efforts–which largely took the form of foundational investments in tech, customer data platforms (CDPs), dashboards, or other platforms. But one of the challenges is making sure you implement these initiatives with a focus on delivering a quarterly return on investment. Otherwise, without an end-to-end perspective, they have the potential to grind to a halt before they’ve had a chance to restart.

Today, things are doable in a way they have never been before, and it’s time to invest in these capabilities. That way, when this tough economic period passes and the market moves into a recovery phase, your brand or organization is in a much better place to effectively compete than your competitors. Get ahead now by improving your ability to leverage the data you’ve already invested to have, and by taking the necessary marketing steps to prepare for challenging times.

Keen to learn more? Check out the interview here.

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ReveNew: Effectively Implementing and Supporting Change in Marketing Strategy

ReveNew: Effectively Implementing and Supporting Change in Marketing Strategy

In this episode of ReveNew, Greg Dolan and Liz Mayer, Partner Omni-channel commerce, talk about an omni-channel approach, retail media, and the importance of both change management and tools in a rapidly evolving market. Plus, they discuss why putting strategy before structure is fundamental when thinking about shifts in company organization in an age of disruption.

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ReveNew: 3 Things to Do When Facing Marketing Budget Cuts

ReveNew: 3 Things to Do When Facing Marketing Budget Cuts

In this episode of ReveNew, Cesar Brea and Greg Dolan discuss several things brand managers can do when being asked to still grow with more limited resources, including spending at the bottleneck and improving their ability to leverage the data they’ve already invested to have. Plus they talk about the evolving role of data and advanced technology platforms in driving future marketing decisions and plans.

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ReveNew: Breaking Down Silos to Make Better Marketing Decisions from a Holistic Perspective

ReveNew: Breaking Down Silos to Make Better Marketing Decisions from a Holistic Perspective

In this video, Keen's Greg Dolan and Bain and Co.'s Cesar Brea talk about the value of coordination and cross-functional collaboration when it comes to making marketing decisions from a holistic perspective. They also discuss the importance of in-campaign optimization and developing an ethos of lightweight integration–both organizational- and data-wise–to get your brand through the recession.

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ReveNew: Overcoming Common Marketer Knee-jerk Reactions in a Down Economy

ReveNew: Overcoming Common Marketer Knee-jerk Reactions in a Down Economy

In this episode of ReveNew, Greg Dolan and Cesar Brea discuss common knee-jerk reactions by marketers when faced with a recession, like cutting all the spend or moving money into the wrong categories, and why they are bad for business. Plus they dive into the importance of having an end-to-end perspective when implementing digital transformation efforts in order to support your quarterly and yearly initiatives and goals.

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ReveNew: Identifying Problems in Your Marketing Plan and Optimizing in Challenging Times

ReveNew: Identifying Problems in Your Marketing Plan and Optimizing in Challenging Times

In this video, Bain & Co.'s Cesar Brea and Keen's CEO and Co-Founder, Greg Dolan, break down some necessary first steps for marketers to take when preparing for challenging times. They include: being aware of all potential problems and their cause, selecting the correct problems to focus on where to optimize, and planning next steps to be more effective in these areas.