The Skinny on Marketing in a Recession
Archives: Daily Issues | Wealthy
Issue# 2720
- WEALTHY: How has the recession affected your marketing practices? (Bob Bly)
- HEALTHY: Making exercise a positive, life-altering experience (Craig Ballantyne)
- WISE: Thomas Jefferson on advertising
ALSO IN THIS ISSUE:
- Is this cheating? (Ilise Benun)
- When customers like your mistakes (Howie Jacobson)
- It’s Fun to Know… about pirated video online
- Add “succor” to your vocabulary
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“The man who stops advertising to save money is like the man who stops the clock to save time.”
- (attributed to Thomas Jefferson)
The Skinny on Marketing in a Recession
By Bob Bly
Whenever the country is in a recession, marketing trade publications run articles extolling the importance of continuing to advertise. Since these articles are usually contributed by ad agencies and marketing consultants, one could argue that they are self-serving.
As Warren Buffett says, “Don’t ask the barber if you need a haircut.”
Marketing professionals make money only when companies buy their services. But do they REALLY believe that spending money on advertising in a recession is smart business? Or are they pushing clients to keep spending so they themselves won’t starve?
During a recession, when money is tight, should companies ramp up their marketing… keep it steady… cut back… or stop altogether?
Following the 1981-1982 recession, the McGraw-Hill Research Laboratory of Advertising Performance analyzed the performance of some 600 industrial companies during the downturn. Of course, we must keep in mind that McGraw-Hill, as a major publisher of trade journals, depends on ad revenues to maintain profitability. That being said, they found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following 3 years than those which eliminated or decreased marketing.”
In a different study, Management Review asked American Management Association (AMA) member firms about their spending during the 1990-1991 recession. The data showed that most firms that increased their marketing budgets enjoyed gains in market share.
One of my readers, MT, owns a software company. In response to the recession, he has cut his budget for Google AdWords campaigns in half.
How did he determine what to trim?
Before the recession hit, MT ran 10 Google PPC ad campaigns – all profitable. “When the economy turned south, six of those PPC campaigns, those targeted mainly at fence-sitters who don’t buy any longer, began to lose money,” said MT. So he wisely cut those unprofitable PPC campaigns – and kept running the four that were moneymakers.
According to an article in Internet Retailer, nearly four out of five households earning $100,000 a year or more said they are cutting back their spending. And when consumers cut back on spending, your business can take a real hit – especially if you sell a product that’s “nice to have” vs. one that customers absolutely must have.
So what can you do to maintain healthy sales during a recession that is likely to continue for some time?
The first thing big corporations cut in tough times is marketing. That’s really stupid. And, yes, I know that, as a copywriter, I sound self-serving when I say this. But marketing, when done right, makes money, brings in customers, and generates sales.
During a recession, your biggest problem is making sales and maintaining revenues – exactly what marketing is designed to accomplish. So stopping all marketing really makes no sense. What DOES make sense is MT’s approach:
1. Precisely measure the ROI (return on investment) from all your marketing campaigns.
2. Cut the ones that lose money.
3. Keep the ones that make money.
John Wanamaker, a famous retailer in his day, once said, “Half my advertising is wasted, but I don’t know which half.” But today, with direct-response measurement and Web analytics, we DO know which half is wasted. So we can fix or eliminate the wasted ads, and generate a positive ROI by running the ones that do work.
I am taking a survey on my website (www.bly.com) on how the recession has affected my visitors. So far, 38 percent of survey participants say their sales are flat, while 25 percent report increased sales and 37 percent have seen sales fall.
Eight out of 10 express some degree of worry about the effect the recession will have on their business and their sales. In response, 32 percent have increased their marketing budgets and 24 percent are spending less on marketing. Yet most are holding firm on pricing. More than 8 out of 10 say they have not lowered their prices to stimulate sales.
When it comes to predicting economic recovery, my survey participants are slightly pessimistic. Just over 57 percent believe the recession will end this year or (more likely) next year. Almost 43 percent say the country won’t recover from the recession until 2011 or later.
To find out more about marketing and selling in a recession, click here now.
[Ed. Note: Bob Bly is a freelance copywriter and the author of more than 70 books. To subscribe to his free e-zine, The Direct Response Letter, and claim your free gift worth $116, click here now.
It might surprise you to know that many marketing channels cost nothing or next to nothing to explore. If you know what they are, and the best ways to use them, you can attract paying customers no matter what the economy is doing. Join Early to Rise and world-class marketing genius Bob Bly in the remarkable new program we've put together solely to solve today's most pressing business problem: How to make money during the recession. Get all the details here.]
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How to Instantly Grab a New Contact’s Attention With Your Answer to One Question
By Ilise Benun
One of the first questions you get when you meet someone at a networking event is “What do you do?” You need to answer this question not only at networking events but on job applications… on your website or blog… in promotional materials… and that’s just the half of it!
Clearly conveying the kind of work you do can be something of a challenge. You don’t want to say “I’m a copywriter” or “I sell shoes.” Boring! You want to capture the other person’s attention and get them to remember you.
Last week, a new client gave me a great idea for how to answer this critical question: Get the language from your testimonials (or even the testimonials on your competitors’ websites).
For example, I could take this testimonial for my business, Marketing Mentor:
“Thank you so much for helping me – I think I’d still be spinning my wheels! You’ve been a great partner in this sometimes halting process of getting the word out about what I do.”
… and turn it into this:
“We partner with you so you can stop spinning your wheels and get the word out about what you do.”
[Ed. Note: Ilise Benun is an author, consultant, national speaker, and co-founder of Marketing-Mentor.com. She helps her clients learn the tools they need to market their services, get ideal clients, and grow their businesses.
You can get twice-monthly marketing tips and a free report on "20 Ways to Get Your Prospects to Call You Back" when you sign up for Ilise's Quick Tips newsletter.]
The Dirty Secret of Screw-Ups
Here’s something I discovered shortly after launching my business in 2001: Up to a point, customers don’t really mind when something goes wrong.
What drives them batty is when they complain and nobody cares. And when you make it clear to everyone in your organization that listening to customers is the Number One job of your business, you can turn the inevitable screw-ups into opportunities to build loyal customers and passionate fans.
Luckily for me, I made lots of mistakes when I was starting out. That gave me constant opportunities to provide great “I’m really sorry” customer service and improve my business – the marketing, products, fulfillment, and more – rapidly.
What about your business?
Do the customer service folks on the front lines really feel remorse when your business screws up, or are they just punching the clock? Do your employees feel empowered to admit mistakes, their own and yours? Do your customers feel respected and heard?
If not, you have your marching orders.
[Ed. Note: Howie Jacobson (www.askhowie.com) is an Internet marketing expert specializing in pay-per-click advertising. In fact, he literally wrote the book on the subject: AdWords for Dummies.
Find out how Howie increased his income by five times - by accident - and how his unintentional good fortune can make YOU rich right here.]
5 Simple Steps to Making Weight Loss Fun and Effective
Your biggest roadblock to staying fit is probably that it isn’t fun. I just read a study which found that most overweight folks don’t find exercise enjoyable. Worse, instead of feeling energized, they feel tired after a workout.
No wonder it seems to be so hard to lose weight!
But, no matter what you have experienced in the past, losing fat can be fun and fast. It doesn’t require long, boring workouts. It can also mean making new friends by participating in fat-loss forums and group training or fitness classes.
If you are just getting started, here’s what you need to do…
1. Get a trainer or nutritionist for professional accountability. Research from Stanford University found that this improves fat-loss results.
2. Work out with a friend who is also losing weight. It will help keep both of you motivated.
3. Go online and get social support in a weight-loss forum.
4. Join a bootcamp and work out to cool music with new friends.
5. Get a nutrition buddy at work who will help you stay on track.
Combine the social support with good eating and proper workouts, and you’ll feel energized all day long. Soon you’ll completely transform your body and boost your confidence… and you’ll be living the fat-loss lifestyle forever!
[Ed. Note: Exercise doesn't have to be grueling or boring. Fitness expert Craig Ballantyne has put together a high-energy program that allows you to burn fat and build muscle in three 45-minute sessions each week. Learn more here.
For more easy-to-implement ideas about how to live longer and feel better, get your free subscription to ETR's natural health newsletter.]
It’s Fun to Know: Pirated Video Online
A new survey from FutureSource Consulting has found that 10 percent of Web surfers in the U.S. and Europe have watched illegally downloaded videos. France appears to have the most violators, with 25 percent of respondents from that country admitting to accessing pirated TV shows, movies, and the like.
(Source: PC Advisor UK)
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Word to the Wise: Succor
“Succor” (SUHK-er) – from the Latin for “to go beneath” – is help or relief.
Example (as used by Daniel Gross in The New York Times): “The financial meltdown has sent the literary-minded scurrying back to the classics for insight and succor.”
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