Too often, when businesses are facing difficult times the first thing they do is cut from advertising and marketing spending. Studies have shown that in previous recessions the businesses that continue to invest, not only grow through recessions but capitalize on the eventual recovery. Many equate marketing effort with advertising expenditures. However, marketing refers to many efforts – including; product design, service offering, pricing, distribution, and sales promotion. With documented best practices, businesses shouldn’t make the mistakes of generations past, yet they do. So, what can we do? Here’s what you need to remember to keep your business on track even through difficult times.
During an economic downturn, a business can feel anxious and hastily cut expenses or lower prices in an attempt to capture market share. This can cause long-term challenges like product degradation and strained customer relationships, which are difficult to fix. Not only does this create declining profitability during the recession, but it prevents organizations from positioning themselves to capitalize on the recovery. If you are able to maintain marketing spend, perhaps you can negotiate lower advertising rates and lock them in. If you have to cut marketing spending, consider strategic reductions in advertising frequency and reach.
Make a Plan
When the economy slows it can be an opportunity to take time and re-think your overall strategy. What purpose was your business founded on? Does that still hold true and resonate with your customers today? Don’t be afraid to re-invent yourself and adapt to changing environments. Look at brands like ATCO, 3M, Levi’s, Madonna, or M&Ms who have stood the test of time from continual adaptation. A plan means smarter, more targeted marketing strategies. Look at a few examples from the past; P&G launched Ivory soap during the Great Depression, Intel started “Intel Inside” during the downturn in 1990, and Wal-Mart went to market with their Everyday Low-Price strategy during 2000-2001.
Invest in Areas Your Customers See Value
Make sure that you understand your current and prospective customers. What are the characteristics, services, and features that they desire? Remove product or service elements that are not adding value to your customers. The savings can be used to increase spending on more desirable features. Slow economies generally favor standardization over customization, and it’s an excellent time to cull poor performing product lines in addition to removing undesired product features. Focus on data that will give you behavioral and attitudinal insights on your consumers. Consumers and businesses are more discerning in tough economic times and only want to pay for true value-add benefits.
Are there prospective customers in different markets that would benefit from your product or service? What about thinking more nationally or internationally? Make sure to do the research on the competition and market pressures. Simple tools like Google Trends can drill down on geographical areas and uncover opportunities that may be worth further investigation. Pick a city or two where you don’t usually promote your service and test the waters. Some tools and technologies allow you to expand your reach whether your business is product or service based. Be strategic, be confident, and get creative.
Once you’ve determined what sets your organization apart, use your unique selling proposition and explore new tactics that will reach your ideal customers. The cost of online and email marketing has made it more accessible, and the results are often faster with more measurable results. Explore opportunities to co-promote or partner with organizations that would benefit from a mutual target market.
For example, offering space in your e-mail newsletter in exchange for space in another organization’s quarterly print magazine. The key here is to make sure there is value in the partnership to your customer. Don’t forget about public relations as well, which can complement a campaign and have a huge impact. You can use web channels to distribute press releases, as well as traditional media sources. During tough economic times, it’s not uncommon for media sources to be looking for some “good news” stories to share.
Have you done everything you can with the resources you have? Have you pulled every lever? Leave no stone unturned. If you don’t ask, you’ll never know if it is possible. Call past clients, prospects, partners, and suppliers – are their opportunities to collaborate or find mutual benefits? Can you redeploy resources? When business is slow, make sure every employee understands your unique value and is able to act as a sales ambassador. You never know when an everyday interaction can lead to a new opportunity.
The above merely outlines a few areas to consider. Many strategies and tactics should be used, and no single effort will be a solution on its own. Some things will work for one organization, and others are not possible for specific sectors, products, or services. Your best strategy is an integrated and customized plan. The firms who survive and thrive through tough economic times are typically those who focus on the fundamentals and look at marketing as an investment rather than an expense.
To access even more help, contact Tenato today.