Our topic this month for our newsletter and blogs is “How to survive in a lean market.” It’s an election year, and the economy is characteristically lean. Hence, we’re going to cover how to survive as a business in these times.
One way to NOT survive in this environment is to cut down on marketing to “save money.”
When Times Are Tough…
Of course, when economic times become challenging, a company will start trimming the budget. Complimentary lunches will become fewer. Company cars are assigned to senior executives only, if at all. Other benefits are cut where possible.
Unfortunately, it all too often happens that marketing falls under the axe when profits become scarcer. Marketing is a “big-ticket item,” so on the surface, it makes sense to cut it. It might look good on paper and on the balance sheet, but it will make for a far bleaker future than potentially lowered revenue.
Examine Your Income Sources
Company finance personnel often conduct income source summaries. They reveal which customers or clients generate the most revenue, which territories are the most fertile, and which salespeople or teams are the most productive.
Often, though, marketing is given short shrift in such analyses. Which marketing campaigns yielded the most viable leads and sales? Or (almost always omitted) which marketing or advertising campaigns were running when sales were high?
How You Reach Customers
What is marketing, really? Well, it’s undoubtedly the method through which you inform your potential customers about your products or services, product or service quality, and product availability.
But even more fundamentally, marketing is the communication between your business and your customers and potential customers. When marketing is cut back or reduced, so is that communication.
When that happens, what do your customers or prospects think? They start to believe that something might be wrong with your company. They already see that negative changes are happening with the economy and in the marketplace, so they associate the tightening up of the market with the lack of communication from your company. They’re trying to rationalize why they’re getting less communication, so they’re jumping to wrong conclusions.
So in addition to constantly informing prospects and customers about your various offerings, your marketing is telling them, “Yes, we’re still here and ready to service you.”
Loyalty and Retention
Our last article covered the vital importance of customer loyalty and retention in these times. Part of that retention is regular communication with them, which is done through marketing. When you fail to communicate, you lose the loyalty and retention that you already have. And you won’t be gaining new customers as your company is out of sight and therefore out of mind, if that potential new customer is even aware of your company’s existence.
Strengthen It!
Marketing is there to consistently promote your product or service to the potential public who will purchase it, whether that public is an individual or company. So, to start with, when you cut marketing, people don’t hear about your product or service. That allows them to consider a competitor’s product or service. This is compounded if they’ve incorrectly concluded that something is wrong with your company because they haven’t heard from you.
Secondly, marketing is the communication between yourself and your prospects and customers. Staying in touch and strengthening it means they won’t lose track of you or think something negative about your business.
The lesson to be learned is that, in a lean market, don’t cut back on marketing. This is the time to strengthen it so that even when economic times aren’t so good, your customers and prospects always know where to go for their needs and wants in your particular industry. More fundamentally, they know you’re there and ready to help them.
Just as a note, in terms of trimming the budget, there are probably ways to market more efficiently and strategically. Sure, you can save money that way—but whatever you do, don’t cut out that vital communication channel to your public. Maintain your marketing budget.
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