This year (2010) may be the toughest year for business for more than two generations. Most of the world has suffered from recession and corporations are failing. Past recessions have shown, however, that some businesses will continue to thrive. A key factor in their success will be marketing.
When times are hard, the temptation is to cut back on “avoidable” costs such as marketing. Such an approach will have an immediate positive impact on profits, but if you do this your business may not survive. During and shortly after a recession, marketing is vital, but you need to use both your time and your money wisely; you should not necessarily be thinking “marketing more” but “marketing harder and smarter”.
Did you know that 80 per cent of your profits probably come from 20 per cent of your customers? It is, therefore, important that you identify your top customers and analyze how they became top customers. Your priority is to keep your top customers and gain more just like them. Keeping them involves looking after them; there is always someone else ready to take them on. It is much easier to keep existing customers than to gain new ones.
Post recession, you need to focus your marketing; you and your competitors are chasing a reduced volume of business and you need to generate good new sales leads. You will probably find that buyers tend to take fewer risks. This may mean that they opt for a “safer” tried and tested product or choose a larger established supplier. If you are a younger business, you will need to do more to reassure buyers and build trust. Risk-averse buyers will take longer when considering a purchase and a sale may occur only after 5, 10 or even more contacts. You will need a proper system for managing sales leads.
Make it your business to know which of your competitors have cut back on product development and / or marketing. For those that have, identify their top customers worth pursuing. Once you identify a potential new customer, carry out a credit check before spending time and money; the buyer may be looking to change supplier because their business has run out of credit.
There is no point in marketing unless it is successful. Therefore, you should always test your marketing, measure the results and use those results to improve future marketing. During a recession, such testing and measurement are especially important because money is scarce and action must be taken on a timely basis; if a marketing campaign is not working you need to change it quickly so that it does work.
Recessions bring out all sorts of “gurus” with new “schemes” to sell. In general, these schemes are either an existing method, reworked so that it is impossible to recognize, or just crazy, but you will find that tried and tested marketing methods usually work best.
Some businesses choose to use a marketing consultant. Good consultants should pay for themselves after a relatively short while, but marketing is not rocket science; if you have more time than money then do it yourself. After all, you should know much more than a consultant about your business, its customers and probably its competitors.
Whatever your approach to marketing, it should be planned. You should review, and if necessary revise, your plan on a regular basis.
When the economic cycle turns upwards strongly once again, your competitors who have neglected their marketing will be weaker and will have lost market share. You, on the other hand, having invested in product development and marketing, will be stronger and will have increased your market share. You will also have gained a good number of sales leads that did not actually convert to sales, for whatever reason. You should revisit these leads more aggressively with a view to converting them to sales.
If you view the current tough times as an opportunity rather than a threat and plan your marketing accordingly, the result will be a better customer list, an increased market share and a stronger more profitable and valuable business.