small business advice
Marketing During a Recession
This depression was deep, and you don't climb out of anything as quick as you fall in.
— Will Rogers, Dec. 31, 1933
There is no question that we are in a serious recession with no end until at least 2010. However, it will end, I promise you that. With that said, however, you need a marketing plan to get through these difficult times and it really must be a different strategy from what you have done in the past. Conditions and consumers have changed and now you must change your marketing strategy.
The first thing is to not cut marketing dollars but to spend them wiser. Look for any dead wood to eliminate and look at each and every marketing expense to make sure you are getting the highest Return on Investment that you can. Just because you have done something in the past is not justification to continue with these expenses. Especially pay attention to those marketing dollars that just go to promote your name or company(image ads) that do not necessarily bring in customers right now. Current advertising must be geared to bring customers in or make them call your business.
Make your entire advertising outcome driven, as much as you can. Find out how customers found you and then allocate dollars accordingly. By far, one of the least productive sources of advertising, are the phone directories. Most people use the internet to find people and craigsnet.com seems to be one of the hottest sites. The point being, however, that you must put each and every advertising dollar in a place that has the biggest bang for the dollar.
Another thing that you must do is making advertising value driven. Value driven marketing just means that you must get to the heart of what your customer needs and wants. I thought one of the best efforts at this was with Hyundai cars. The automobile manufacturer’s campaign said that if you lost your job, you could return your new car to the dealer. Now I know there must have been 10 pages of legal limitations on this, but the ads got to what the customer really valued. In this case, the fear of losing their job, stopped the customer from buying a car, but Hyundai understood what the customer valued, and provided this commodity.
Customers are really looking for values in pricing and expecting the customer to pay the same prices they paid last year, are unrealistic. You must make your prices appear that the customer is getting tremendous value from a purchase from your company. Just look at how the majority of fast-food chains indicate their value meals at less than $4. The clearly understand what needs to be sold.
The final point about marketing during a recession is that you must concentrate on your existing customers. They trust you and are much more willing to buy from you than a new customer. Up selling to existing customers is not only profitable it is really the only viable market for so many businesses. Having to watch every marketing dollar demands that you deploy the dollars where you have the greatest chance of success and that clearly is with your existing customer base.
Now go out and make sure that you look carefully at every marketing expense to make sure you are getting the highest return you can. Second, make sure that you are selling value driven products and services and, finally, concentrate your sales efforts on your existing clients.
You can do this!
Jerry Osteryoung is the Director of Outreach of the Jim Moran Institute for Global Entrepreneurship in the College of Business at Florida State University, the Jim Moran Professor of Entrepreneurship; and Professor of Finance. He was the founding Executive Director of the Jim Moran Institute and served in that position from 1995 through 2008. He can be reached by e-mail at firstname.lastname@example.org or by phone at 850-644-3372.