Nigeria, the so-called giant of Africa, is experiencing severe economic challenges presently, with her growth of around 7% for the past decade being threatened by exchange-rate volatility and falling global oil prices. Since May 2015, inflation has gone beyond 9%, and the foreign exchange policy has led to job losses, business shut down and import inhibition. To aggravate the situation, foreign investors are holding onto their dollars, waiting for the biggest decline of naira, while Nigerian business people are holding back their naira due to a lot of uncertainty about government policy direction and results. Governments at various levels owe civil servants salaries, the federal government is cutting cost and former government contractors are selling their properties to return loots to government’s coffer before the anti-corruption corps’ comes to their doorsteps. It cannot be worse than this for Nigeria – this is austerity. The implications of austerity are: the consumers have low purchasing powers, make more of rational buying-decisions and are less receptive to sales and marketing. This is not a perfect time for talking about brand; it is either a good time for marketing drive.
However, it is the best time for marketing initiatives, if done well. The caution is that the market landscape has changed and the marketing strategies and tactics must change. Austerity has changed the choices of consumers, and has re-arranged the order of Maslow’s theory. In a time of austerity, consumers think more of utility than luxury, more of functionality than design, more of must-haves than good-to-haves and more of reusables than consumables. No one knows how long the austerity will last. In a time of austerity, Peter Drucker’s critique of Maslow’s Theory becomes obvious: “What Maslow did not see is that a want changes in the act of being satisfied”. The same way a want changes form in the act of being dissatisfied. When a need is being dissatisfied, the need state becomes obvious, and the need becomes as basic as the need state – and probably falls to the bottom-level of the Maslow’s pyramid. The need to get a job with a blue chip company changes to the basic needs of making a living; the need to fly changes to the basic need of transportation; the need to drink a coke changes to the basic need to quench a thirst; and the need to go to cinema changes to the basic need for entertainment.
How do we go about marketing, when there is scarcity of money? We have to go the unconventional routes: flip the Pareto Principle, narrow your targeting, focus on repeated sales, and make your customers brand ambassadors. In flipping the Pareto Principle, create new product mix that can make 80% of your customers generate more income for you. A product mix that can easily initiate upselling and cross selling is a good strategy in motivating customers to spend more. During this period, you will have to narrow your targeting to the core of the prospects that need your services/products. For example, everybody may needs fumigation to protect against lassa fever, but families with children will respond faster to that need because the stake is high. There is always the core of the market that would be readily receptive and responsive to marketing. If that core is identified and engaged, it yields better results. Rather than focusing on increasing the number of customers, focus on generating repeated sales. Frequency of patronage can make up for loss of customers and it is cheaper to manage. Also, in terms of exploring cheaper approach to marketing, your customers will do a better job marketing your brand than your employees. Your employees are compelled to market because they are paid to do it; but your customers would do it because they are convinced to do it. Marketing staff can generate some big purchases, but happy customers will generate streams of patronage and you may not need to pay them for the job. Working around these tactics is simple, but results will depend on the peculiarity of your products. The idea is: you can make things work during austerity, if you can change the game.
Olufemi Babalogbon is the Chief Marketing Strategist of Brand Soulhouette Limited. He can be reached via www.brandsoulhouette.com or 08036292636.