Smart Marketing : All Access Marketing For Growth
Marketing in a bad economy: Luxury or Necessity?March 2010 By Carl Mandelbaum, president, Almond Tree Marketing
The talking heads say that the recession is over. However, the economy has yet to recover, and it may take a good bit longer than anticipated for that to happen. Often one of the first things to go in a bad economy—or at the very least have its budget slashed—is marketing and advertising.
That does not have to be, nor should it be the case. Marketing experts have proven that it is sound advice to spend more on marketing during a recession, but it's hard for a company that is intent on tightening its belt to understand that.
The key is to focus. For example, if you have a successful, strong brand already, focus on what has worked. If your brand is relatively weak, systematically focus on your strengths while addressing your weaknesses.
Let's look at some other areas on which to focus and some helpful ideas on how to weather this economic maelstrom. And remember, it is going to get better.
Know Your Customer
Now more than ever it's imperative that you know your customers. Generally speaking, consumers spend more time searching for products and services and negotiate harder at the point of sale. They are more willing to postpone purchases, buy less or trade down. Must-have features of yesterday are today's can-live-withouts, and conspicuous consumption becomes less prevalent.
Keep In Touch
It doesn't matter whether your category is B2B or B2C; your biggest asset during a bad economy is your existing customer base. Think about starting a monthly e-newsletter or a direct-mail campaign as a way of touching base regularly. Try to resist the urge to make a sales pitch in these pieces as that can come off as pushy and may turn them away.
Don't Price Promote
It's very tempting to cut prices to retain those price-sensitive customers. But once a price premium is lost, it tends to not be regained. In fact, frequent price promotions train your customers to expect lower prices and purchase only when "it's a good deal." Try promoting your value-adds instead.
Don't Cut Quality
Avoid at all costs the temptation to cut back on the quality of your products and services. A product or service that delivers exceptional performance will keep people coming back. Although a reduction in quality may go unnoticed for awhile, your competitors could exploit it later on.
Review Budget Allocations
Your customers are looking to maximize their value for money, and you should do the same. Prices for traditional media will most likely be depressed during a bad economy, so you may find yourself in a buyer's market. If you can negotiate more for less, lock in a long-term deal. Remember that if you can commit the resources, social media is a virtually new marketing and advertising avenue. However, be sure to know whether your customers participate in that medium.
Cut the Right Costs
If you do find yourself in a position where costs must be cut, make sure you cut the right ones. Companies that cut administrative and manufacturing costs tend to do well, but businesses that reduce product quality or cut marketing budgets tend to underperform.
Make Your Creative Work Harder
In any communication channel, the best way to leverage spending is to put it behind high-quality, cost-effective creative. Now more than ever you need to set the bar high and use that media budget as effectively and efficiently as possible. If you don't have in-house staff handling your marketing, partner with professionals who can come up with a plan just for you.
Bad Economy: Threat or Opportunity?
How you react to a bad economy comes down to your personality; are you a glass half-full or a glass half-empty kind of person? The fact is that a bad economy is a terrific opportunity to deal your competitors a killer blow. Your marketing return-on-investment often increases in a recession, because marketing costs tend to fall faster than sales in most cases. The combination of cost-effective marketing and weak competition gives companies a unique opportunity to earn more market share on the cheap. CR