Marketing in a Recession: Be Brave and Smart
It’s a tough economy. No doubt about it. Ok.. so that’s not news to anyone… But even in the worst economic situations companies still need to buy products, services etc. You want your company to be the one they buy from which means you still need to market… and more effectively than ever before.
Here’s a few interesting marketing-related facts from recessions past:
• 1970 Recession Year — American Business Press (ABP) and Meldrum & Fewsmith study showed that “sales and profits can be maintained and increased in recession years and [in the years] immediately following by those who are willing to maintain an aggressive marketing posture, while others adopt the philosophy of cutting back on promotional efforts when sales appear to be harder to get.”
• 1974-1975 Recession Years — ABP/Meldrum & Fewsmith 1979 study covering 1974/1975 and it’s post recession years found that “Companies which did not cut marketing expenditures experience higher sales and net income during those two years and the two years following than those companies which cut in either or both recession years.”
• 1981-1982 Recession Years — McGraw-Hill Research’s Laboratory of Advertising Performance studied recessions in the United States. Following the 1981-1982 recessions, it analyzed the performance of 600 industrial companies during the economic downturn. It found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following three years than those which eliminated or decreased marketing.”
• 1990-1991 Recession Years — Management Review asked AMA member firms about spending during the 1990-1991 recession. “Fortune follows the brave”, it announced, noting that the data showed that most firms that raised their marketing budgets enjoyed gains in market share.
These statistics suggest that where there is risk there is also opportunity. So how can you reinvent your marketing to make the most of the current economic climate? How do you ensure that marketing is an important, effective contributor to revenue?
Consider these thoughts on making your marketing work for you in a down economy:
Evaluate your marketing budget — Marketing budgets need to be directly related to your company business objectives. Make sure that every marketing activity you plan to execute is directly in line with your business goals. Don’t just execute marketing activities, be smart thoughtful and purposeful about it.
Scrutinize your marketing programs — Run marketing programs that generate measurable sales leads and help to nurture and develop leads into paying customers. Each marketing program should have a measurable ROI. Any marketing program that cannot be tracked back to lead generation should be minimized or eliminated.
Make CRM your friend — CRM systems can help you track and measure any marketing program. Tracking and measuring will help you weed out marketing campaigns that are working well from those that are not. This allows you to do two things: 1) Replicate programs that are working and 2) Modify programs that are not working well so they generate a higher return or eliminate them altogether. CRM is critical in bringing your marketing efforts to a new level of effectiveness. Continuous evaluation of each and every program is of paramount importance.
Review your messaging — Take a look at your marketing messages. Are you positioning yourself as an expert on what your customer wants to do and providing insight on how they can do it better? Or are you simply promoting yourself as an expert on what you sell? Your customers want to know that you understand their challenges and that you have the knowledge and capabilities to identify a solution for them. Make sure your messaging reflects this.
Develop your leads — It’s easy to focus on “hot” leads generated, but overtime most of your sales will come from prospects that were not classified as “hot” the first time they respond to a marketing or sales call to action. Don’t leave these B-C-D-leads on the table. Nurture them into paying customers. This can be done by adding consistent marketing “touches” that complement sales activities around these leads. Consider the information needs of a prospect at various stages in the sales cycle. This will help you determine the types of marketing content, tactics, and deliverables that map to the sales cycle and push these prospects to purchase faster and more efficiently.
Don’t forget to mine your customer base – Your customers can be a gold mine for new business. Review your customer base and look for opportunities and events that may mean a sales opportunity for you such as industry regulation changes, company mergers, business expansions etc. Marketing programs, content etc can be developed to maximize each one of these events.
Make the most of your marketing programs — Think of your marketing not as a series of isolated activities and events, but more holistically. Integrated marketing campaigns provide higher ROI than stand alone activities. Cross promote your events, tradeshow participation, webinars, available white papers etc. into print and/or radio ads, newsletters. Maximize what you’re already doing.
We’ll dive into more of these considerations in detail in later blog posts. In the meantime, how will you adjust your marketing in the coming year to maximize on sales opportunities?