As the jaws of the recession tighten on businesses, it seems, as is often the case, that marketing budgets are amongst the first to be slashed. But is this the right approach? While reducing marketing spend might improve your figures in the short term, the long-term consequences can be disastrous.
It makes sense that if people are spending less, you need to work harder to encourage them to spend money with you. If you’re not out there communicating with potential customers, how are they going to know about you and what will differentiate you from the competition?
An opportunity to gain market share
While there is no doubt that the current climate is difficult, it can also be seen as an opportunity to gain market share. After all, if your competitors are doing less in the way of marketing, surely now is an ideal opportunity to make some noise and win new customers. Your audience are more likely to be receptive to your message if they’re not being constantly bombarded by communications from businesses similar to yours. While it’s true that people are cutting back, they haven’t stopped spending altogether.
If during the good times you’ve concentrated on building your brand and winning market share, it’s crucial that you maintain this during the bad times so as not to lose that market share. Once lost, you’ll spend far more money trying to win it back.
Make the most of your existing customers
It’s cheaper to retain an existing customer than it is to gain a new one, so make sure you cross-sell and up-sell wherever possible. Maintain a dialogue with your customers to make them feel valued. Ensure that communications are relevant and, where possible, give your customers extra value. Remember that existing customers are your advocates and positive word of mouth is an invaluable way to attract new customers and build your brand.
Targeting is key
It’s important to think about targeting and segmentation, not only so that you don’t waste money sending blanket communications to everybody on your database, but also because people want communications that are relevant and of interest to them. If they regularly receive communications from you that aren’t relevant, they will start to switch off and ignore your marketing.
Don’t cheapen your brand
Keep your brand integrity and be wary of cheapening your brand. It can seem tempting to slash your prices and position yourself as the cheapest on the market when everyone is tightening their purse-strings, but if you’re a premium brand, think what effect this will have in the long term. When things return to normal, it will be hard to re-establish your previous positioning.
However, that’s not to say that your market won’t appreciate good value. Your product might not be the cheapest, but if they feel they’re getting a quality product at a special price or with added value, that can be the incentive they need to purchase your product. It’s also worth demonstrating an appreciation of your customers’ changing needs and making clear that your product is still worth buying even when things are tight.
Monitor your marketing
In a recession, every penny counts and marketing activity needs to be measurable and accountable. You need to be able to monitor your marketing activity, understand what’s working and what isn’t, then act accordingly, which is why direct marketing becomes the marketing activity of choice for so many during a recession. It’s far easier to obtain marketing budget if you can prove that a particular activity is effective.
Proactive, not reactive
In times of crisis, many businesses fall into the habit of reacting to situations as they happen, which can drain resources and negatively impact on your brand. While a degree of flexibility is healthy, a longer-term strategy and some advanced planning are crucial. Customers notice when businesses adopt a ‘me-too’ approach, so make sure you differentiate yourself from your competition and lead from the front.
The importance of integration
With so many marketing channels now available, it’s crucial that you choose the ones that are best suited to your market and apply them in a way that is most likely to achieve your objectives. An integrated approach to marketing, with consistent messaging and look and feel, strengthens your campaigns, ensures your target audience don’t get mixed messages and improves the effectiveness of your marketing.
Article by Corrina Hinchliffe - Senior Account Manager. ©2009 Marketing Team Direct.
Published May 2009
