Now is the time to win big. If you goagainst the flow, you could experience remarkable opportunities to differentiate yourself.
“According to one study, during the lastrecession, 25 percent of businesses aggressively increased marketing expendituresand, as a result, increased market share
2.5 times the average for all businesses inthe post-recession period,” says JonathanFisher, CEO of BrandExtract. “Conversely, during expansion periods, 80 percent ofbusinesses increased advertising budgetswith no improvement in market share —because competitors did the same thing!”
Smart Business asked Fisher what marketing strategies can fuel your company’ssuccess in today’s economic climate.
How does the challenging economy affectmarketing?
The stronger a company’s brand recognition, the greater the chance it can win business and retain price points. Business owners are demanding returns and tightervalue propositions. Consumers are lookingmore closely at their purchasing relationships. This means buyers want provenproducts or service providers they knowand trust.
Cutting marketing budgets in down markets is one of the worst moves a companycan make. Case study after case studyshows that a down market is one of the fewsituations when a company can differentiate and gain ground on their competition— without increasing last year’s budget. Intight markets, businesses are able to buymedia, services, printing and more at discounts. This translates into increased bottom-line gains unlike any other time.
Why is using the right strategy important?
Strategies that yield quality over quantityhave proven to be the most effective whenyou must do more with less. You shouldalso make every effort to increase yourbond with current customers to protectagainst competitors. If you have the correct plans in place, you can thwart theaggressive tactics of other businesses thatare desperate for business.
How can companies in today’s economy evaluate their marketing?
Aside from looking at the returns, companies should view the cost per reach andconversion, both short and long term.Marketing departments will defend theirinvestments by touting numbers like hitson the Web site, but business ownersshould look closely at the cost to acquirethese leads or hits. By comparing the costto acquire these returns against each marketing channel, you will see a holistic picture of the expense of marketing efforts.
What should be considered in developing anew plan?
Marketing plans are investments and, likeretirement portfolios, should be diversified.This means including a mix of the tried-and-true on up to highly creative (such as newmedia) strategies and tactics. Also, plansshould be geared to the goals and personality of the company — generic, one-size-fits-all methods rarely work.
One of the most effective methods fordeveloping plans in a down market is toconsider each quarter an investment overthe next. We call this momentum marketing, as you are building on the momentumover each quarter. If your agency or marketing manager is proving that their strategies are working, be willing to increase thebudget. This approach will yield greaterreturns and not stifle the progress yourmarketing investments are making.
How can a business measure marketing ROI?
Marketing has many measurements,ranging from brand awareness to traffic tosales. Generally, we look at the equationratio of leads to prospects to proposals toconversion rates, but every company’sgoals are different: some want to reduceattrition, others are seeking to reverse anegative trend, and still others are zeroingin on aggressive growth. An important,though often neglected, point is that youneed to invest in establishing your currentbaseline for your measurement to havemeaning.
Any other points to share with readers?
- Beware of discounting fees unless the price reduction is truly strategic.
- Promote value and benefits over features.
- Watch for market demand because it may lead to new services, products or packages.
- Talk with your customers and form focus groups with strategic partners and vendors, as they will be your best referral sources.
- Concentrate media buys and agency services for negotiating power.
- Get creative with balloon contracts and multiyear retainer options to save money. Now is a perfect time to negotiate long-term contracts at reduced rates.
Remember, the decisions you make in adown market will have an enormousimpact on your brand. If you let it slidenow, it will be twice as difficult and expensive to get it back to where it is now.
JONATHAN FISHER is the CEO of BrandExtract, an integrated branding and communications firm that guides growing companiesby providing strategic branding solutions, marketing communications, advertising, print and interactive services. Reach him at(713) 942-7959 or email@example.com or go to the company’s Web site at www.brandextract.com.