We’ve all felt it for awhile now. You know what I’m talking about. It’s that R word that most of us just can’t bring ourselves to say. Instead, we prefer words like downturn, challenging economy, or tough times. But it all comes down to fewer sales showing up on the income statement. So what are we supposed to do with our marketing budget—increase it, decrease it, or change it up? The key is to look at your marketing dollars as an investment, not an expense. Use the customer knowledge that you have and implement SMART marketing during these times of financial distress.
SMART marketing consists of the following:
S – Strategize – this is not the time to skip strategy and try any new idea that comes to mind; strategy and the marketing plans that follow still begin with your customers’ needs and wants
M - Maintain market spend – do not decrease your budget; fill the gap that your competitors leave as they reduce their spending by building your brand awareness
A - Assess and allocate the budget – look at tactics that might achieve similar results but with lower cost and more track-ability (i.e., online tactics)
R - Research your customer thoroughly – don’t save money by cutting out processes or surveys that help you get to know your customers better
T - Target and reach out to them – live in your customers’ world and empathize with the economic challenges that they are experiencing
Hold your marketing budget steady.
A series of six studies conducted by the research firm of Meldrum & Fewsmith showed conclusively that advertising aggressively during recessions not only increases sales but also increases profits. This fact has held true for all post-World War II recessions studied by American Business Press starting in 1949. Even more, in a study written by Penn State’s Smeal College of Business entitled Research: Proactive Marketing During Recession, they remind of us of companies that weathered the storm and succeeded. A few examples include:
Proctor and Gamble - During the Great Depression they pushed Ivory soap.
Intel - In 1990-1991, during economic hard times, they deployed the "Intel Inside" campaign.
Wal-mart – Wal-mart launched their "Every Day Low Prices" campaign in 2000-2001.
Now’s not the time don’t cut back on your marketing. You can often score media buys at a discount, and even a modest investment can reap big rewards: once the economy brightens and competitors rush back, custom¬ers will already be familiar with you.
Double-down on your current customers.
Yes, the thrill of the hunt resides in getting new customers, but during an economic downturn it’s more practical to provide more value (and get more in return) from your current customers.
When customers make decisions in a downturn, they're more likely to go with a more trusted source. If they're more likely to go with you, then you want to make it easier and more obvious to them to go with you. Market to them. Enable your sales teams to be more effective with them. Ask current customers what they need from you.
Stay in front of them regularly with consistent messaging that reinforces your value propositions to this key audience. Love your core customers and they'll love you back, in good times and bad.
Ramp it up online.
One of the mis¬takes many organizations make in a down economy is to simply cut their current mar-keting mix by 30%. But using the same tactics and channels with less investment leads to predictable results: Fewer sales leads and lower brand recognition.
Instead of spending less, show the powers-that-be that you’re spending smarter. According to the Pew Internet & American Life project, 81% of Web users go online to research products or services before they buy. Whether your market is consumers or businesses, those are your prospects. Get in front of them with more aggressive search and online advertising cam¬paigns...track-able marketing that can get local and deliver leads close to home. Integrate social media--such as blogging, on-line networks, and MySpace— into your traditional marketing plans. Nowadays you can’t rely on marketing to your prospects, you need to live and breathe in their space.
Invest in growing market segments.
When you’re building or reviewing your marketing strategy, be sure to assess market segments that grow faster than others. Take some time to understand these markets and determine whether your company has a strategic fit and can quickly win business in those fast-growing market segments.
These may be segments you're already selling to, but not particularly focused on; or they may represent new segments—and new opportunities for your company. At the same time, you will want to reduce your investments in the segments that will get hit the most in the downturn.
Train like a distance runner.
Remember marketing is a marathon, not a short-distance sprint. Think about a distance runner — if the distance runner is really strong, when the runner hits a hill, the runner is going to speed up. What happens? The runner has the capacity, but he also has the strategy and the nerve to do it.
Companies that have been looking at marketing as an investment, and not an expense, and have been running their business with customer-focused marketing are the ones that are going to come out of this [bleep] really, really well.
Michelle Lanter Smith is Chief Executive Officer of Hi-Impact Marketing & Sales Solutions, Inc.
