DID YOU KNOW THAT COMPANIES WHO INCREASE MARKETING EFFORTS DURING A RECESSION, AS COMPETITORS SCALE BACK, CAN IMPROVE THEIR MARKET SHARE for a lower cost than during more robust economic times? As your competition cuts back, they relinquish their future clients. This is prime time to step in and fill this gap in the marketplace, claiming those prospects as your own.
Come out of hiding
Tell people what you do! By adjusting your vision and how you approach the next few months, you will see significant results by consistently keeping your name in the marketplace. A study conducted by Penn State’s Smeal College of Business, titled “Turning adversity into advantage: Does proactive marketing during a recession pay off?” found that companies who dig deep during slowdowns reap great payoffs.
“Think about a distance runner,” said Dr. Gary Lilien, one of the authors of the study. “If the runner is really strong, when they hit a hill, they will speed up when everyone else is slowing down. They strategically choose times of stress to mount attacks: increasing their pace on hills or other challenging conditions. Similarly, proactive marketing includes both sensing opportunity (a tough hill and fatigued opponents) and an aggressive response (possessing the strength and guts to seize the moment).”
Gaining market share now will pay dividends in the future. Each piece of new business you pick up translates into one additional word-of-mouth referral opportunity…priceless! The additional leads you acquire increases the activity level of your business, and further establishes your credibility to future clients.
Your experience will mean little to your prospects if you don’t educate them about it. Consider McDonald’s signs…”Over 1 Million Served”. There’s a reason they post that number for everyone to see! In today’s busy environment, your prospects are overwhelmed and are looking for shortcuts to decisions. If you can legitimately show clients you have helped, you leap to the top of their shortlist when they decide who to work with.
“A challenge is merely an opportunity in disguise”
In his book, “7 Habits of Highly Effective People”, Stephen R. Covey explains how he assisted a client through a marketing brainstorming session during particularly difficult times.
The team met during a time of heavy recession, and the economic impact was hitting their industry particularly hard. On the first day, they discussed “What is the situation? What is the stimulus?” Times were tough, and since most of the news was bad, many people were discouraged by the end of the day. On the second day, they addressed “What is going to happen in the future?” They studied upcoming trends and realized that things were going to get worse before they got better. Everyone left even more discouraged.
By the third day, the group collectively decided to focus on the proactive question “What is our response? What are we going to do? How can we exercise initiative in this situation?” They discussed managing and reducing costs, and explored increasing market share. As they concentrated on practical, actionable items, a ‘spirit of excitement, hope, and proactive awareness concluded their meetings.’ The summary:“What’s happening is not good, and while it will get worse before it gets better, we are reducing costs and increasing market share. Therefore, business is better than ever.”
The urge to spend less and cut back on marketing can be overwhelming…expenses continue to roll in regardless of your cash flow. Now more than ever, keep the big picture in mind and follow your own plan. Remember, recessions are an opportunity to dollar-cost average and improve your long-run returns. By knowing where your dollars are going, and understanding which marketing channels give you the best return, you can drill down to the highest-leverage methods. Times like this provide a valuable chance to streamline your operations.
Jay Conrad Levinson, the author of Guerrilla Marketing, writes that average prospects must be exposed to various forms of your marketing nine times before making a decision. His rule of thumb is that ‘your marketing will miss a prospect two out of three times, so you must plan 27 attempts to achieve those nine exposures.’ Aim for maximum exposures with the smallest cost. Here are some ideas to get you started:
• Choose frequency over ad size and color to generate inquiries or direct sales. To achieve branding and increased awareness, negotiate lower costs and proceed with larger ad sizes and full color
• Repeat direct mailings to the same list within 30 days will pull 40 to 50% of the first mailing
• Media feels the crunch too. Negotiate with your reps for lower rates, extra space, and volume or frequency discounts
• Leverage free publicity through community involvement and networking
You can only manage what you measure, so track your results and stay focused on methods which bring the greatest results. Make the most of this time to establish yourself as a force in your area of business. After all, much of the competition is temporarily sitting on the sidelines, so it should be easier to make a name for yourself.
Building Market Share Is Like Building a Retirement Fund
As you can see, simply having a game plan will put you light years ahead. Keep in mind that returns on your investment will take time to realize. Consistent efforts are cumulative, and they also compound. Start out by building awareness with prospects, transition into generating leads, and begin paving the way to PROFIT.