The shaky economy doesn’t have to mean a direct marketing retreat. Author and lecturer Andrew Razeghi explains why your brand should act now to prevent losing customers later.

An interview with marketing expert Andrew Razeghi

The secret to flourishing in today’s economic downturn is to challenge convention, according to marketing expert Andrew Razeghi, a lecturer at the Kellogg School of Management at Northwestern University.

In a recent paper, “Innovating through Recession: When the Going Gets Tough the Tough Innovate,” Razeghi argues that recessions provide fertile ground for launching new businesses, developing disruptive new products and strengthening customer loyalty. Numerous high-profile name brands were born in the shadow of the Great Depression, he notes.

“Get creative,” says Razeghi, who advises organizations on creativity and innovation. “Ideas are cheap. You don’t have to spend money in order to solve problems. But you do need to spend time.”

Razeghi, who is also author of The Riddle: Where Ideas Come From and How to Have Better Ones, talks about the upside of a down economy and how direct marketers can benefit.

DELIVER: Your white paper contains many examples of companies that prospered by marketing new products during recessionary times. What do these companies have in common?

RAZEGHI: They focused on more than just cash flow during tough times. You need three things to innovate: ideas, talent and capital. In a downturn, there is almost an exclusive focus on capital, on hoarding cash. Although managing cash flow is important, successful recession-period innovators also continue to invest in research and development and marketing rather than put them on hold. And instead of choking off innovation, they listen to the market, invest in products for the long term, and keep in front of the customer.

DELIVER: So they don’t cut back on marketing or communications?

RAZEGHI: On the contrary, they spend aggressively on these activities. In a recession, the worst thing you can do is to hide — to cut off communications with customers. This is true for companies operating in the business-to-business environment as well as consumer-products companies. Customers are often skeptical, but they tend to be even more so during a recession.

Fear creates focus: They wonder how you’re doing. And they ask themselves, “Should I buy that product when its supplier might be out of business in six months?” Now is the time to increase communication and restore customers’ confidence not only in the products you are selling, but also in the company behind those products.

DELIVER: Who is making noise now?

RAZEGHI: A good example right now is a very well-known investment company that’s been producing effective, 30-second ads reassuring customers that the business has been through recessions before, and that it will get them through this one. On the other hand, one Japanese car manufacturer recently announced that it would not be attending the new car shows in either Chicago or Detroit, only to switch gears abruptly after U.S. dealers voiced their discontent with the announcement. The company has since said it will be attending both shows. What is interesting, however, is how the company “got creative” about solving the problem, which involved balancing fiscal responsibility to shareholders and keeping their dealer network happy. Their solution: Work with local dealers to help staff the show. Now, that’s creativity at work. It’s not about go or don’t go. It’s about finding a third way. Sometimes necessity is indeed the mother of invention.

DELIVER: In your paper “Innovating through Recession,” you make the case that economic downturns are good times to break with the status quo. How can people turn direct marketing on its head?

RAZEGHI: Perhaps it’s time to rethink the whole concept of direct mail and ask what is its purpose, where are we trying to get the piece to, what do we want people to do with it, and are there ways to better integrate it with the Web? A few years ago, one of my clients owned a patent for a technology that involved swiping a pen over the label on a direct mail piece and being taken directly to a Web site. Anything that saves a customer time or facilitates what people are doing already will always be relevant.

DELIVER: So this is really no time for marketers to hide their heads in the sand?

RAZEGHI: Now is the time to get back to your knitting. Direct marketers need to play to their strengths and rethink how they may be able to translate those strengths into new opportunities. Direct mail is more physical, less disposable and more sensory than digital media. Start with these benefits and innovate from this core idea.

As marketers continue to clamor for attention, we know that sensory branding will grow increasingly relevant to help cut through the clutter. Direct mail is perhaps the best vehicle for distributing all of a brand’s senses. Whether you’re a car company working to promote that “new car smell” or a coffee roaster coming out with your “Christmas blend,” get creative about the benefits of sensory marketing and direct mail’s role in helping make your case to consumers.

DELIVER: Agreed. But the push is increasingly toward using the digital space — social networks, e-mail, blogs, etc. Given this growing reliance on the Web, what are the future implications for direct mail?

RAZEGHI: It’s been my experience that people still trust what they read on paper much more than they trust what they see in digital media. Direct marketers have a chance to capitalize on this trust by making direct mail more compelling and innovative. For example, physical marketing touch points have a huge advantage when it comes to experiential marketing. Whether it’s a food company sponsoring bus shelters in Chicago to promote stuffing mix, or product samples sent via direct mail, experiential marketing can be as compelling as digital media, if not more so, because it incorporates multiple sensory experiences. Physical product sampling, coincidentally, also happens to have very high conversion rates. Even in a recession, customers will continue to value those types of activities.

DELIVER: How else can mail make a difference?

RAZEGHI: I think there is also an opportunity right now for custom publishers to carve out a new niche by becoming a one-stop-shop for small retailers to help promote private-label products, which do well in economic downturns. Private label products also build the retailer brand while increasing profits. Custom publishers could develop a service allowing retailers to log on, create a custom piece, and mail it out to a target audience, similar to the way authors use online services to self-publish books.