Welcome to Marketing in a Down Economy
Under the best of situations, marketing can be a daunting task. Competitive pressures are significant and in many cases this means that you have to do more with less. But in every economic slow down there are always companies that actually excel and prosper. They are strategically able to seize market share, reach new customers, and streamline their marketing operations.
Marketing in a down economy is just like when you faced those final exams in school. You had studied (or planned), reviewed, and prepared. Then the next natural component was test time. I don't think many of us actually enjoyed taking those tests, but we knew they were just a natural part of the learning process. In essence, marketing in a down economy is the final exam. We laid our plans and strategies, now we have to make sure they produce.
The Marketing in a Down Economy website is dedicated to providing you with the tools and resources to more effectively help you respond to today's business climate and also to prepare for tomorrow.
We've created this website to provide you with marketing information, resources, and also tactics that you can integrate into your current marketing plans. The bigger part of this website is providing you with insights from other marketing professionals that they have used and that are paying dividends within their companies.
Zephoria Inc. the company behind this site has also created a new marketing diagnostic tool to give you insights and perspectives into how you can improve your site's marketing performance. You can receive a free, complimentary Executive Summary report to help get you started. Click here to learn more.
The Marketing in a Down Economy Framework
We organized our content with two primary focuses. First is discussing the actual marketing tools that can help you not only survive in a down economy, but that can help you thrive with significant marketing success. Second, we'll detail the strategic marketing insights to help you implement these strategies into your organization.
Public Relations: Your Ace in the Hole During a Recession
By Dick Shaner, Jr. / Travers Collins & Company
How many of you are being asked to increase your marketing budgets and to find ways to spend the additional dollars that are flowing your way?
After all, don’t all the articles you’ve been reading speak to the fact that the best-positioned and most successful companies actually increase their spending during an economic recession in order to achieve superior business performance, build their brand and strengthen their competitive advantage in the marketplace?
Let’s face facts. When times are tough, the vast majority of businesses react by cutting budgets, mistakenly believing these dollars are discretionary, or some of the functions expendable.
The following suggestions and resources, with an emphasis on public relations, will hopefully help you and your organization ride out the recession and be stronger for it.
The Survey Says! – While bigger budgets are unlikely, you can use research to fight for every dollar. A February 2008 study by professors at Penn State’s Smeal College of Business and the University of Texas, “Turning Adversity Into Advantage: Does Proactive Marketing During a Recession Pay Off?” is especially relevant. It cites firms that have not only survived, but thrived during difficult times, including Proctor & Gamble pushing Ivory soap during the Great Depression, Intel launching “Intel Inside” during the 1990-91 recession, and Wal-Mart launching their “Every Day Low Prices” campaign during the 2000-2001 post dot-com bubble slow down. There’s plenty of other research out there. Find it and use it to your advantage.
A New Mindset – Marketing and public relations should be seen as a strategic asset for a brand or company, not a drain on profits. Laura Lake, of About.com Marketing, says one of the keys to succeeding during a recession is to look at these dollars as an investment and not an expense.
Addition by Subtraction – If your competitors are slashing their budgets, you can gain an edge simply by maintaining your spending, or minimizing your cutbacks. You can also look to add to your PR budget by pulling dollars from other departments and eliminating ineffective advertising or marketing programs that no longer add value. Also consider reallocating money from your sales budget, realizing that excellent public relations and image-building efforts drive sales and support your company’s overall goals and objectives.
Stay Focused – According to Nigel Hollis, chief global analyst at Millward Brown, one of the world’s leading research companies, a key to success during a downturn is to keep your wits about you and focus on four things: your competition, your brand, your customers, and your communication. If you have a strong, successful brand, focus on what has worked for you so far. If your brand is in a relatively weak position, focus on systematically exploiting your strengths while addressing your weaknesses.
Take Charge – Rather than calling a retreat, it’s time to take the hill; charging forward with a plan to communicate with your key publics on a consistent basis. Let them know how your company is dealing with these tough times we are in. Update them on every success or new development. In the words of American Express CEO Ken Chenault, “In tough times your instinct is to hold back, but your competitors are going to be distracted. That’s the time to be aggressive and on the balls of your feet! …invest in your own success while others are afraid and burying their heads. As a result, your public relations program will stand out among your competitors ... and give your organization a clear competitive advantage with sales, reputation growth and brand management.”
Why PR? – Public relations is a management function that helps companies build trust, and maintain relationships. It encourages two-way communication and transparency. PR provides credibility and can enhance reputations. It allows companies to do more with less spending, delivering tailored messages to key publics through a variety of channels. Advertising and more traditional marketing campaigns, which can be highly effective and should be part of every company’s arsenal, can get very expensive, very quickly. People tend to rely more on word of mouth and personal recommendations during times of economic trouble, rather than risking the unknown or believing solely in advertising. Bill Gates is quoted as saying, “If I was down to my last dollar, I’d spend it on public relations.”
More Bang for Your Buck – Publicity or “earned media” has long been an essential component of PR and remains an extremely important tool for creating awareness, influencing opinions and changing behavior. It works indirectly – through an editor or reporter – who can reinforce the clarity and context of an organization’s messages. Journalists, often working under deadline pressure and juggling multiple stories, look to PR professionals to help them ensure the accuracy of their information, get relevant quotes and obtain story ideas. A recent survey of U.S. journalists found that tips from PR professionals helped generate nearly half their stories. Favorable publicity provides a critical, third party endorsement for a product, service or company and the “implied” endorsement of a reporter who chooses to cover a story lends valuable credibility. Studies have also shown that more people read articles than ads (by as much as 7-to-1), and that editorial coverage is more believable than advertising.
An Oldie but Goodie – For years, the op-ed has been an essential tool in the public relations practitioner’s kit. And with newspaper circulation down, many newsroom staffs are finding their numbers dwindling. That’s bad news for the print media but good news for you. Because it means that editors are increasingly open to copy from outside sources. Just keep in mind that the successful op-ed is about the issue, not the author. Further, the massive influx of blogs and commentary pieces on the Internet might seem to overshadow the traditional op-ed, but it also offers an opportunity. Utilize new social media tools to give your op-ed more legs. Post it on your company blog, on Twitter, your Facebook page, or link it to your online newsroom. You’ve put the work into it. Get as much of a return on your investment as possible.
In Good Times and in Bad – What better time to dust off your company’s written crisis communication plan than right now? (Don’t have one? Better give us a call!) Keep in mind that the vast majority of crises fall into the category of “smoldering” – they start small and take weeks, even months before they get out of control and draw public attention. An effective crisis plan can help your company prevent a “situation” from becoming a full-blown disaster. Given the existence of a crisis plan and a “do-the-right-thing” management philosophy, virtually any situation can be dealt with and the damage minimized. In fact, handled properly, such situations can actually be opportunities to improve an organization’s reputation. A good plan is like a strong partner; it’s there for you in good times and in bad, in sickness and in health.
Every Little Bit Counts – Keep in mind that everybody in your company and every point of contact with your customers and other key publics – from the receptionist to your website – says something about your organization. Building your reputation and brand isn’t solely the job of your PR or marketing folks. It’s a company-wide effort.
High-Value Customers – New business is always important, especially right now, but don’t lose focus on your high-value existing customers. Losing loyal customers can be very costly. Make sure that you are not only meeting their existing needs, but also anticipating new ones. Work overtime to keep them happy.
Be Visible – More than ever, now is the time to be here, there and everywhere. Be sure to participate in community affairs, volunteer efforts and professional organizations. Get yourself and your company on the agenda for an upcoming panel discussion conducted by your local chamber of commerce, Rotary, or industry group. Keep reminding yourself of the old saying, “Out of sight, out of mind,” to inspire you to stay visible.
Look Inside – Don’t forget about your employees. Their engagement and productivity is vitally important to your business during good times and especially during tough ones. Communication is key. Be as direct and honest as you possibly can about the complexities and challenges. It’s easy to want to pull back, and natural to want to withhold divulging negative information. But that is the hand we’re all being dealt right now. In the absence of substantive news from the top, employees will fill the void with half-truths from the rumor mill, which definitely doesn’t help morale. Tough times naturally breed anxiety and uncertainty. Being transparent with your employees can help them maintain the enthusiasm needed to do great work, which is exactly what your company needs during times like these. And if layoffs become necessary, there are steps you can take to minimize the damage.
History shows the U.S. has experienced nine other recessions since World War II, but this one is clearly unprecedented in its severity. It’s going to be some time before things return to any sense of normalcy, say nothing of a full recovery. There are no easy solutions, no cutting corners. It’s been said that 90 percent of being successful is just showing up, but it’s going to take a lot more than that to survive this one. Hopefully, these tips will be of value to you and your organization in the difficult days ahead.
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Dick Shaner, Jr. is senior vice president with Travers Collins & Company. For more information contact: dshaner@traverscollins.com or call 716.842.2266, ext. 326.