26 May 09 Marketing in a Recession: To do, or not to do?
As the recession settles in, most of us are shifting our focus to short-term growth. However, marketing is an investment, not an expense. The proven correlation between share of market and share of voice means that if you increase your marketing investment at a time when competitors are reducing theirs, you should substantially increase the long-term value of your brand. John Quench, a professor of Business Administration at Harvard supports this notion. Increasing advertising during a recession while your competitors cut-back is an opportunity to improve market share and your ROI.
But cash is tight right? You’re looking to cut costs, and that fat marketing budget seems like the perfect place to start slashing. Rather than cut back on marketing expenditure, it is better to optimize your campaigns by more effectively targeting your prospects. This requires running your business on customer intelligence. For pure-play online retailers, this is easy. All of your customer interactions are trackable and the data is mineable.
Amazon.com is the defacto example of this type of ‘data driven’ company. By leveraging their customer data, Amazon.com are able to up-sell their shoppers by recommending additional relevant products and also getting them to come back to their store with an effective customer lifecycle messaging plan. They are also not afraid to try new things. They have deployed applications on social networks like Facebook and Linkedin, launched a mobile phone version of their store and run text message marketing campaigns to support its launch.
Take extra care of your existing customers As the life-blood of any business, customers should be well taken care of in any case. Competitors will be slashing prices in an attempt to lure your customers away. Recessions are the perfect time for new start-ups to enter the market with a product offering that is better tailored to your customers current needs. It’s important to increase your service levels and adapt to the current operating environment in order to continue to succeed. People are looking for convenience, to save money and for convenience. What are you doing for them?
But not everyone automatically loses out in a recession. Read about why luxury brands and value players will survive remarkably well and why the real problem is with players in the middle market. For them, it becomes a case of catering to consumers current needs. For example, you might normally purchase Tide laundry powder. But feeling the financial pinch, you may decide to switch to a generic supermarket brand and save money. If Tide had offered a special or coupon which cut their price to match the generic brands, then they would have a good chance of retaining that customer. After all, why would they want to risk the consumer experiencing the lower-cost brand and finding it does just as good a job? On the flip-side, the consumer also takes a risk since they don’t know how the new detergent will affect their clothes.
Update: Indian Study Shows Recession Spending puts marketers ahead
Read more: Tactics for Marketing in a Recession
Resources I used for this post:
New Ad-ology Study: Reduced Advertising During Recession Negatively Impacts Consumer Perception
Should You Up Your Marketing During a Recession?
Marketing Your Way through a Recession
Tags: customer service, linkedin, optimize ROI, recession marketing
04 Mar 09 Marketing in a Recession III: The Practical Guide
While it’s clear that maintaining your share of voice in the marketplace is important in a recession, the reality is that if your ads are not converting like they used to, then the burn may not be sustainable. One solution to this problem is to develop your Customer Lifecycle Marketing Plan. This means delving into your customer data and sending targeted, well-timed communications to previous visitors and customers to your online store.
Since you only get paid when you make a sale, it makes sense that your marketing should only cost you money when it generates a sale. That’s why you should pay more attention to your affiliate marketing program.
Marketing in a Recession. To do or not to do?
02 Dec 08 Email Marketing in Practice
For the moment, most marketers still rely on email marketing as their number one direct marketing channel because it’s proven, cost-effective and easy to track. At Fishpond.com.au, we constructed some pretty elaborate emails as part of our Lifecycle Marketing Plan which delivered measurable gains in our sales. From this experience I can say that a sound email marketing campaign should have the following components:
- Personalization: A first time customer requires a different message than one that’s bought from you several times in the past. See Customer Lifecycle Marketing for more on this.
- Time sensitive offers: You’ll get the best return on investment from limited time offers like: 50% off Today Only” It’s generally ok to do a loss-leading promotion in your email, because your customer will probably end up buying more than one product anyway and you make up the margin.
- Time of Day: The best open rates tend to occur just after lunch time, when people have food-coma and are less likely to be wanting to work and more likely to be looking for a distraction. The next best time is before the end of the work day, when they are just looking for something to get them through to 5pm. (This assumes your targeting your average office worker) Furthermore, you want to give people enough time to make use of your time-sensitive offer, so time your send-outs carefully.
- Frequency: Too much and they will ignore you. Too little and they will forget you. Repeating the same message or offer too many times makes it less valuable to the recipient. You can only cry wolf so many times before everyone just ignores you. Godaddy.com are guilty here. I get a domain registration discount offer every second day. The offer is further devalued because its easy to find a Godaddy promo code on coupon websites anyway. But criticisms aside, Godaddy.com is the first place I think of when I want to buy a new domain name. So while i get a little annoyed with their over-promotion, they have gained front-of-mind value – A tactic Amazon.com also employs.
- Keep it short and to the point. Have a unique and compelling value proposition in your subject line. Add alt text to all your images. Furthermore, any text should be in small and easily consumable chunks. Virgin America do this really well. Sign up to Elevate for an example.
- Make it easy for people to sign up. Include receipt of promotional emails as one of your terms and conditions of using the site. That way, everyone who makes a purchase is automatically opted-in.
- Make it easy for people to unsubscribe. If you annoy someone, it’s best you both have some breathing space before your next interaction. A simple ‘click here to unsibscribe’ should be all it takes to be removed from a mailing list. Making the person sign in to their account, the (password to which they have probably forgotten) is too long a process and will simply result in your future emails being marked as SPAM.
- Email Design: Get a designer to make you one good HTML, Spam-compliant email template, then stick to it. People are more interested in the value that your email offers them rather than the design of it.
- Track everything: Every business is different. Your target audience and where they live determines how you design your email marketing campaign. You can track anything on the internet, so make sure you track everything. Use this data to optimize your campaigns for maximum ROI.
