Invest in the 3 R's of MarketingBy Kathleen A. Martin | Print
Businesses often mistakenly cut marketing during a recession thinking they'll save money. Investing in marketing, though, is one of the best ways of surviving during a bad economy.
You can call our current economic state a downturn, recession or depression, but either way it means that money is tight and it takes more effort to drive customers to your doors. Now is the time when most businesses are reviewing expenses and looking to cut anywhere they can.
One of the favorite sacrificial lambs is marketing, which executives often perceive as a cost-center that can easily have funding cut without a detrimental effect on the business or revenues. This is often a fatal mistake.
Marketing is the means of reaching out to existing and new customers, demonstrating product and services capabilities and creating awareness that leads to sales. Cutting marketing means fewer people will see your company’s potential value you their business.
Good marketing is a vehicle for successfully riding through the toughest of economic climates. Now is the best time to look at all the "R" words: review, retrench, reinvest.
Do you know what marketing programs are working and which ones are not? Do you have metrics and systems to capture results? By tracking as many items as you can as it relates to your programs, you will quickly begin to notice which marketing techniques work and which don't. This will provide you with a measured indication of where you are in relation to the key objectives you set for success. As you make small tweaks to the programs, track every change. Anything that improves your results and gets you closer to your objectives is worth further investment. Conversely, negative results will show where you can cut spending.
In today's recession, retaining your existing customers is critical. Remember this saying "If you don't give your customers some good reasons to stay, your competitors will give them a reason to leave." Adding new customers to your business can cost five times more than increasing customer satisfaction and retaining the current customers. While the average business loses 10 percent of their customer base a year, a simple customer retention program to keep 2 percent of those customers can have the same effect on your profits as if you had cut expenses by 10 percent. Now is the time to reach out to each of your customers and plan for your mutual success in 2009.
Now it is time to take the money you have from customer retention and discontinued programs and reinvest in your business. If you reinvest up to 50 percent of your profits in down times back into your business, you can keep your spending equal to the good times and maintain profitability. With your new analytics, consider changing your marketing mix. Instead of reinvesting in more advertising, take a look at your communications. Improvements in your Web site, business cards, marketing and sales systems, and brochures can pay big dividends. This is also the time to outsource those small projects you do not have time or in-house expertise. Not sure where to start on your communications? Hire a copywriter to assist with your sales letters, presentations or Web site text. A minimal investment in a graphic artist to design a logo or provide new graphics can pay for itself.
By following the three "R’s" of marketing, you can recession-proof your business and increase revenue and profits in a down economy.
Kathleen Martin is special projects coordinator for Channel Insider and a channel marketing expert.