Marketers on how to stop budgets becoming ‘a self-fulfilling prophecy’
As inflation takes its toll, marketers should get the whole business involved in the conversation about how to be smarter with budgets, says Paws.com marketing boss Adam Lawrenson.
The tough inflationary environment is putting pressure on marketers to justify budgets, as businesses search out new ways to cut costs and mitigate supply chain issues.
Speaking at Marketing Week’s Festival of Marketing this week, chief product officer at online pet food retailer Paws.com, Adam Lawrenson, admitted his business has been challenged by inflation in several ways. These span from the rising investment needed for raw materials, to issues around cost per acquisition, delivery, labour and packaging.
However, he argued marketers simply staring at the marketing budget becomes a “self-fulfilling prophecy” and instead the whole business needs to get involved to understand the levers that can be pulled to make a difference.
“Fortunately, as a young brand we’ve got a number of levers we can pull in the marketing space. Because we are relatively new there is a massive opportunity in general expansion, a big opportunity in the affiliate marketplace, opportunity in organic social and SEO,” said Lawrenson.
“We see there is going to be growth there to minimise some of those inflationary pressures. But we also need to look outside of that and understand across the organisation how we can be smart about the products we sell and the price at which we sell them.”
We have to get a bit creative with how we do our brand marketing and we have to rely on some of the key assets we have available to us.
Warren Fiveash, Teenage Cancer Trust
Lawrenson was joined on stage by Teenage Cancer Trust’s head of marketing, Warren Fiveash, who noted marketers in the charity sector have always worked with small budgets. For this reason, the focus is on maintaining investment through difficult periods.
Fiveash recognised the cost of acquisition of donors is going up while inflation takes its toll, meaning the marketing budget is not stretching as far.
“That means we sometimes have to focus on short-term gains, the fundraising products that are bringing in money,” he explained. “We have to get a bit creative with how we do our brand marketing and we have to rely on some of the key assets we have available to us.”
These key assets include working as closely as possible with partners and media owners who support the Teenage Cancer Trust, as well as ensuring the charity is speaking to “effective audiences” who can help grow its brand in the long term.
Fellow panellist Toni Wood, CMO of search engine for furniture and furnishings Ufurnish.com, discussed the impact of being a startup dealing with a cash runway.
“We are trading off all the time between managing to acquire new customers, at the same time as we are trying to build brand. We are trying to go up the funnel, as we all do, to avoid getting stuck at the bottom,” she explained.
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Wood described the challenge at Ufurnish.com as different to the ones she experienced at brands like DFS and Costa Coffee. She outlined the importance of building the internal business case for marketing, particularly in the current economic climate. When talking to her engineering team, for example, Wood doesn’t discuss brand building, acquisition or lead generation.
“I’m literally saying to them: ‘You can build an amazing product, but unless I have the ability to market it – to tell people about it – it doesn’t matter. We are just talking to ourselves,’” she said.
The Ufurnish.com marketers take a “fluid” approach to prioritising investment, balancing the goal of driving traffic to retail partners with the need to build a brand and business culture from the ground up.
“Those choices are constantly toggling and the other bit that comes over the top of it is raising investment,” said Wood. “There is an external optic that is slightly different all the time which is, what do your investors see you doing?”
Lawrenson identified with the process of going through multiple investment rounds and the pressure to show uplift in certain areas over a three- to five-year period. Paws.com is conscious it must keep investing in tech to differentiate the customer experience.
“If we don’t do that then there’s little point investing in marketing, because we’re just pouring money into one area and we don’t get a flywheel set-up that only technology can bring,” Lawrenson explained.
He also pointed to the importance of scale and growing at a pace whereby the business can bring down the costs for the entire organisation, which feeds into more money to invest in tech.
“It’s that constant balance,” said Lawrenson. “Investing in marketing to bring down the cost of the business, so you can invest in technology and the marketing then works.”
He explained that while Paws.com has been careful about where to spend money this year, it has invested more in marketing in terms of both the team and budgets.
Leap of faith
From a charity perspective, Fiveash said he is fortunate that at the Teenage Cancer Trust fundraising and marketing are one unit, known as the engagement team. This has helped make it easier to communicate about where to invest and work to “one funnel”.
The team is now looking for new ways to be more efficient, although the long-term value of marketing is well understood across the business.
“Sometimes it’s about trying to sell in the benefits of marketing to fundraising. But it works the other way as well. We try to listen to the fundraising side and the sales side, and make sure we’re compromising and meeting in the middle,” Fiveash explained.
During the pandemic, the Teenage Cancer Trust chose to decentralise decision making for products the charity was trying to push, which cut out “over-consulting” and helped the team go to market quicker. The product development team, for example, created fundraising challenges and owned the delivery of those campaigns via Facebook.
We are trying to go up the funnel, as we all do, to avoid getting stuck at the bottom.
Toni Wood, Ufurnish.com
“We were able to get to market quicker and saw significant uplift in our fundraising during that period, which made up for the shortfall from the events we weren’t running,” said Fiveash.
“We’ve taken that forward in the long term and built it into the processes and structures of the team to make sure we carry that on. We’ve put in a really good project management framework and made sure we don’t over-consult.”
He explained that as a result of Covid, the organisation learnt people are motivated by being more agile, rather than responding to “three lines of command all the time.”
The Teenage Cancer Trust also used the pandemic to reset its marketing channels in a bid to build engagement with an audience on social media through emotive storytelling. This approach is built into the plan going forward.
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For Wood, earning the right to exist in the future means the brand winning today. Much of this mentality is centred around transparency and ensuring everyone in the business is on the same page.
“For us it comes down to the simplest things, such as: ‘Do I put a head into marketing? Or, if I put a head into engineering and give my investment pot to an engineering team, can the product go faster?” she said.
When it comes to making such decisions, Wood insisted everyone at Ufurnish.com “gets it”. This understanding comes from the transparency of communication. The business has an all-hands meeting every Monday where the team share everything on the agenda and all Slack channels are fully open.
Ultimately, all the panellists agreed in the importance of taking a “leap of faith” when marketing in challenging conditions. For the Teenage Cancer Trust, this means exploring new opportunities, such becoming a beneficiary of the Omaze million-pound house giveaway TV campaign.
“It is about making the most of those opportunities. We are looking at uplifting our marketing around those periods to boost that awareness,” Fiveash explained.
“We know that is going to have a longer-term effect and improve our efficiency. It is about taking that leap of faith and that balancing act to make sure we still look at the short term to bring the money in.”
The leap of faith for Paws.com came when the business acquired Ocado’s DTC pet business Fetch last year. Lawrenson noted the short-termist approach would have been to retain the Fetch brand, which arguably had greater equity than Paws.com
“But we felt that it was going to be better long term to align all the brands we have under Paws, both in the UK and in Europe, and that that would pay back,” he explained.
“It is a leap of faith. You can run some models on it, but you are never going to quite know.”