No COVID cuts, upweighting brand, less lower funnel 

Suncorp’s board and top brass have spared Mim Haysom and her marketing team a marketing meltdown. While other blue-chip marketing teams have been decimated in recent weeks – airlines, hotels and travel sector companies have seen marketing teams of 70 people and more vanish overnight – Suncorp is holding firm on its marketing and brand investment strategy.    

Haysom’s 18-month effort to convince Suncorp’s leadership and board to view long-term investment in brands and marketing as a growth driver have paid off. “We haven’t cut our marketing budgets and we have no intention of doing that,” she says. 

“The board and leadership team were there from the get-go. But I would say that is a result of the work that we've been doing over the last 18 months, two years. When I came into the role at Suncorp, I was really keen to shift the dynamics so marketing wasn't seen as a cost centre but as a revenue growth driver. Part of that was educating the board and the c-suite that brand equity is top-of-funnel, if you want to call it that, and is just as important as the acquisition and the sales numbers that they're looking at. You don't get one without the other. And so, having done a really solid education piece over last 18 to 24 months, the automatic response in a situation like this was not to go straight to marketing to save costs. All of the work that's been done has held us in really good stead because I think our board and our leadership team really understand the importance of brands and the importance of having the right kind of spend to support the required activities.”

Ritson: She’s brilliant

Haysom’s response elicits as close as you’ll get to a squeal of delight from the former Melbourne Business School associate professor and hard bastard of marketing,  Mark Ritson.

“I have to tell you, that’s your textbook answer,” he says. “And I'm telling you, you're going to get one out of a hundred CMOs being able to answer it like that. First, most aren't at the same level as Mim. Second, even if they are, they're not going to be able to sell it to the board. And third, even if they can sell it to the board, getting the money to maintain a marketing budget during this pre-recession and into a recession is the ultimate test of brand building.”

Ritson is the marketer’s frenemy, constantly pushing and probing marketers to become more than “communications muppets” - more of that a little later.  But his glowing tributes for Haysom – he quips he’s giving her a “far too easier time” – and his insistence that there’s “100 years of cases studies” for continued marketing investment in a downturn, is not rhetorical indulgence. 

Most brands will now lose their nerve

 “It’s not hyperbole. I can show you right now 40 really good peer-reviewed studies from properly big samples in business-to-consumer and business-to- business - insurance, consumer goods, you name your industry. We’ve got the data that will prove, and I don't use that word lightly either, that not only should you maintain brand spend during a recession if you possibly can, you actually want to up your investment in it proportionately, as Mims says. 

“What we've known for 100 years, again no exaggeration, is although a recession is an incredibly difficult time for a company and a marketing team, it’s a massive, massive opportunity to build brand and also gain a huge marketing advantage. It comes down to the fact that most of your competitors will either go out of business or will lose their nerve and cut back their marketing spend. When inevitably the recession ends, you come out of it with 20 to 30 points worth of increase growth versus the category.”

Ritson says if marketers are properly trained and “able to do what Mim’s just done”, Suncorp’s brands will be in a “rare position” to strengthen as a result of the COVID-19 crisis.

Right, enough of the high praise for Mim Haysom.

COVID extremes: marketers in boom or complete shutdown 

Suncorp, like Telstra’s CMO Jeremey Nicholas, Woolworths, Uber Eats and Coles, are holding their own but ADMA CEO and Kathmandu and Rip Curl board director, Andrea Martens, says many of  ADMA’s marketers are dealing with “complete shutdown”. “There’s extreme diversity. It’s heartbreaking,” she says. “Customers are reacting really, really quickly and in order to protect their cash positions, organisations are responding just as quickly. They're eliminating all their capital expenditure but also variable costs wherever they can, which is where the marketing costs and that staff headcount falls into it. So from a marketing perspective, companies are going completely dark and having to let teams go where basically all that is left is what is required to leave the lights on. Having the conversations with some CMOs in the last week, those that have had to let 50, 60, 70 people go are themselves now also looking for contract work and temp roles. That's on one side. What we're saying on the other side, however, is other industries around alcohol, fitness, health and food where we're seeing either whole organisations or industries thrive or else otherwise departments within organisations thrive.”

What now for Suncorp’s media, AFL, netball sponsorship black holes?   

It was around March 11 when Mim Haysom says her team started shifting marketing priorities, working from home and realised major sporting codes and events would start to be cancelled. Part of the rapid response was to salvage what they could from their decimated sporting and sponsor partnerships and rework them into something that will contribute to Suncorp’s brand building strategy. Haysom says Suncorp has partly returned to an “old school” media strategy. 

“We're still working through that with the AFL but from a media perspective, we know we won't have the broadcast sports so we're working through how we replan media to still be on TV in the right channels and right environments for the brand. So we're kind of shifting the TV spend from sports programming integration to what I would call old school spot and dots [TV advertising]. Apart from that, we're looking at how we use some of the [AFL] ambassadors that we've got connections with again to create messages for our internal frontline teams, to keep them motivated and messages to customers that we can run through our online channels. So we're looking at how we can leverage some of those ambassadors that we've got across the portfolio with all of our brands. But right now, it's about keeping the brand visible and working through our media schedules to make sure we've still got a presence in the right environments.”

Haysom calls out Suncorp’s partnership with Netball Australia as lead example of how the group is continuing its brand investments and “not so much selling a product”. Haysom says Suncorp has “moved fast” with Netball Australia. “Obviously the games aren't going ahead therefore we haven't got a whole lot of broadcast activity, but also content that we would normally have. We've built a great program around that partnership and sponsorship called Team Girls, which is all around keeping girls in sport and giving them skills to be confident, resilient and stay and participate in sport. Now, with netball, without the grassroots activity happening, without the local games, without the big Suncorp Super Netball games going ahead, we've looked at how we can shift to an online environment and still give our customers and our Team Girls advocates that kind of access and activity to what they've always loved in that program.”

Suncorp is backing Netball Australia and a partnership with Netfit which in a COVID environment is going to deliver online programs, school holiday programs, fitness programs and tools for girls to stay connected with their teams and to still keep up their netball skills. 

“For me, that's brand activity and that's a great brand play, says Haysom. “We really believe in building resilience and confidence in young girls. We believe in our netball partnership and keeping girls in sport. And so that activity, while it's shifted, is a great example where we haven't stopped it. Brands have a real opportunity in this environment to be really relevant. Content is a really interesting space too because I think right now we're all focused on getting relevant information that's quite dry to our customers.”

Ritson’s final words: Recession 

The brutal truth, as Ritson sees it, is the COVID-19 infection curve will inevitably flatten and “we’re going into a big recession”. He says marketers need to be very careful. Many, he says, are “in love with the pornography of change and obsessed with new bright, fluffy feelings. I'm already seeing articles left, right and centre from people, who frankly should really stay quiet, talking about how everything has changed, the consumer has changed, the media will change, the nature of brands will change. None of that is true. Not an ounce of it is true. It will take a year or more for things to stabilize. And the consumers and the brands and the way that marketing is done will return to how it was before. We'll get a lot of people losing their jobs. The smart ones will stay focused on the recurring lessons of marketing and they will prosper despite the tough times ahead.” 

Ritson is scathing of “every useless CEO” in Australia sending the “same pathetic email: I feel your pain. We're in this together. Yada, yada, yada.”

Ritson says consumers don’t care and it proves that most brands aren't thinking properly. “And it proves that most marketers are obsessed with communications, which I would argue right now is the weakest of the ‘Four P’s. If you look at brands that are doing it properly, they're brands that are reconfiguring products distribution, certainly pricing.” Woolies, he says, isn’t necessarily the world's best supermarket, but the $80 box sent through the mail to communities and people that are in need is strong brand and marketing work.

Communications muppets - Haysom v Ritson

“The problem is the majority of marketers in Australia think marketing is advertising. Advertising is the least important thing right now,” says Ritson. “What we need during these next few weeks and probably months of the crisis, are marketers that can think on their feet and do proper pricing, product innovation and distribution work. But the problem is we all know there aren't many of those men and women around. They're outnumbered by communications muppets who are obsessed with sending out inane messages and advertising where they move their logo around to help the community realise they should stay separated. The best thing we can do for Australia is generate value for customers, generate value for companies so we can keep people employed and keep our economy moving. Put down the communication tool box and pick up the other tactics, because that's what we need.”

Haysom, however, ain’t buying all of Ritson’s worldview. She says Suncorp’s three-pronged COVID strategy includes maintaining visibility for the brand.   

“I love Mark. He doesn't hold back on either end of the spectrum. Look, our three key themes that we're working towards are being visible, being relevant and optimizing. And so I think we do need to be visible. I think advertising helps us be visible. But to my point before it's got to be relevant and I agree with Mark on the product and the pricing. The work that we're doing right now isn't what is the next shiny TV commercial we're going to film. It's what is the next message we take to customers in terms of their financial support packages that we're developing as an organisation. That falls into in my world. I agree with him that product and pricing is essential and you have to be focused on that right now to meet the customer demands. For me, I think advertising helps me be visible and to get those messages to customers. It's how we combine that context and that content and get it right.”

Here endeth the lesson.