Jun 29 2009

Managing Business in this Economy

by Bill Amirault

You just found out your staff and budget are being cut, a common reality in this economic climate. This scenario is the norm at most companies, it just depends on the severity and duration. If the reductions are 10-20% (you can manage it), 25-40% (it will hurt), 45-60% (brace yourself), 65% or more (you may be the one turning off the lights). So to chart the proper path forward, you need to take stock of the situation and the company on several levels.

1) Does the company philosophy and competitive situation indicate that marketing dollars are (a) an investment like R&D or (b) an expense like paper clips? It’s always some of both, but the former situation provides much more flexibility and opportunity with future programs than the latter.

2) What’s the actual or perceived ROI for each Marketing program? This is ultimately the litmus test for any advertising, promotion, PR, sales and/or e-Marketing event. The better you can measure this, the more likely your programs will have continuity.

3) What % of sales are normally devoted to R&D, Marketing, Sales, etc.? What will those percentages be after budget changes? If R&D receives funding any time it’s requested and you have to conduct a mid-Eastern bazaar for every dollar, it will be an uphill battle.

4) Where are the majority of your customers in the purchase cycle (awareness, consideration, trial, repeat, loyalty) and how are they faring in this climate?

For your loyal and repeat (meaning somewhat loyal) customers, make sure they don’t find a reason to go to a competitor at this time. Since you have established relationships, you may be able to cancel an expensive convention or road show, but still have to keep communications open by phone, email, blog, etc. to ensure they know any developments in your business that can benefit them.

If the purchase cycle is long enough so that your customers are effectively new each time, cutting back now could be disastrous, no matter what the CFO says.

5) Is this downturn really an opportunity to take a long a look at current and previous programs and either refresh them or overhaul them completely? Technology has helped make communications and even promotion programs more cost effective. But, before jumping on the social media bandwagon, for instance, make sure there’s a real business reason, and return, for everything you do.

6) Are there real customer opportunities out there that you may have missed because your message and targeting have been slightly off line, or just focused on customers who aren’t supporting you as they have previously?

So, what to do?  Your answers to the above questions will go a long way toward refining your strategy in the best possible way.  Here are some additional guidelines:

* Focus on those programs you know have a guaranteed return, with a caveat…  Familiarity can lead to complacency and mediocrity, even with reasonable returns.  One B2C company I worked with got so enamored with Sunday newspaper coupons (they’re easy to see, measure and bring instant spikes to weekly sales — like a direct mail program may be for your) that they didn’t realize how much overall returns had declined through the years.  These promotions also missed a very large % of the real target audience.  Make sure your programs are updated from a messaging and a delivery standpoint.

* Tighten up your strategy, positioning, branding, communications and media to ensure consistency and proper targeting.  Can’t emphasize this enough!!!  Though it’s easy to rely on those inside the company to chart the course, the far better approach is to focus on what the market needs are, and how your company best addresses them.  The B2B Marketing Posse is an excellent resource for developing these insights.

* Spend 10-20%, or more, on breakthrough (for you) test programs that have been proven elsewhere.  This may seem like the last thing to do in a downturn, but if you don’t create fresh programs, you can become stagnant.

Finally, keep your chin up!  Though this economic period has been difficult for many, but as has been true in all other downturns, this too shall pass.

Jun 25 2009

B-to-B marketers, it’s time to go direct.

by Jeff Propper

Most b-to-b marketers understand that for every twist and turn taken by the economy, there exists a specific strategy designed to capitalize on current market conditions. In our recent past, for instance, when economic times were booming, many business-to-business companies chose to establish or enhance their brand identities through image advertising. As we know, this strategy emphasizes building relationships between a business and its target market over the long haul, with sales rising steadily over time. But when the economic pendulum swings in the opposite direction, the “slow burn” of image advertising can become inadequate to sustain a company’s short-term growth.

That’s why for many marketers, the question raised by a sluggish economy all come down to “What can I do now?” In my opinion, nothing beats direct response marketing. Intended to generate an immediate reaction from a business’ target market, direct response marketing exists as a counterpoint to the more patient sensibilities of image advertising. With direct response marketing, a business engages its audience from a more urgent platform, and inspires a quicker purchasing decision. That consumer decision, in turn, translates into a stimulated sales effort for a business, one that can be augmented with a variety of different tactics. For businesses whose survival depends on an uninterrupted flow of sales, adopting a short-term direct response strategy can yield significant dividends.

Beyond Billy Mays

I’m not talking about a B2B variation on the “You-May-Already-Be-A-Winner”-style of junk mail and spam. In reality, direct response marketing should be a deliberate, methodical, and studied form of sales promotion. What’s more, to be most effective, the campaign should begin as an integrated media effort, which could include a variety of advertising vehicles: print, direct mail, email, internet advertising and more.

Stand out. Or stand aside.

Standing out in a crowd is a basic tenet of good advertising. And in today’s economic climate, standing out is more critical than ever. Direct response marketing lets you stand out distinctly in the eyes of your target because it allows you to convey to them how well you understand their needs, speak their language, and can satisfy their wants.

It’s about ROI. (or I’ve found the magic bullet)

The final key to a successful direct response marketing effort is a finely tuned media strategy — one
that begins with broad parameters, and then quickly narrows its focus. For example, to reach a particular target market, your media plan may include an integrated mix of print advertising, direct mail, e-mail, ad banners, etc. As the program develops, it becomes critical to measure each media outlet to gauge its value to your program. The weak elements are discarded until you determine the one or two outlets providing the desired response rate and cost per sales lead. In doing so, your advertising dollars attain the highest return on investment possible.

Need customers? Get direct.

Today’s economic climate demands that businesspeople reassess how they interact with their target markets. For companies intent on remaining competitive — and profitable — direct response marketing offers a results-driven strategy that can help them achieve their goals.