Are you convinced yet that we are in an economic downturn, recession, slow period, lousy economic cycle?
Whatever you want to call it, it's here. I wish it wasn't so. But now is the time to do something instead of waiting it out. What you do with marketing your business from now on can either set you up to surpass your
competitors, or put you in catch-up mode when the economy recovers. Being disciplined, being targeted
and being creative with your marketing efforts are more important than ever before.
I tackled "Being Disciplined" in my last column in April. Typically, a downturn prompts businesses to pare back marketing budgets. But before you do that, make sure you know exactly what is producing revenues for you now by investigating your marketing return on investment. Budget cuts in the wrong places start a downward momentum not only on revenues, but in your employees' and customers' minds. Remember, marketing dollars spent during a down economy are far more powerful than similar dollars spent during good times because you can grab market share as your competitors wilt. It is also the cheapest time to improve your market share.
Being targeted with your marketing efforts and dollars is important any time. But since all businesses have less money to waste now, consider the following tactics that may help you effectively target and communicate to your customers:
Know your customers: Resolve to spend more time understanding your customers and how to meet their needs. More than ever, customers are more outspoken about what they buy and whom they buy it from.
Research their motivation, likes and dislikes of your products, services and communications.
Know the customer experience: Do you really know what it is like to be a customer of your business? You may be shocked. First, research the whole transaction of dealing with your company beginning to end. All of the touch points. This can be done by contacting a consultant, soliciting a friend, or assigning this to an employee or a team of employees. Make sure they report straight to the CEO so that the information is unfiltered.
This reminds me of a local restaurant I have frequented for many years. I go online to look at daily specials and order take-out. I have lunch there at least twice a month. And yet, every interaction is like I am a new customer. No recognition, no specialized emails, no special offers, no incentive to return. I know I would be prompted to frequent there more if they even tried. Here are some ideas: an email survey on the experience right after purchase, a return offer, recipes, or just a plain thank you.
Fix the problems right away: There is not much patience in this economy. Empower your staff to make customer service decisions on the spot, without making your customers grovel. And, most of all, when you learn of service issues, fix them and say thanks.
Strategic messaging through all channels: Relate to your customers by creating content in all of your communications that is relevant, authentic and engaging. Segment preferences. Provide context, rather then sheer content. Treat your customers as groups of individuals rather than faceless masses. Make sure the messaging is consistent in all channels, so that they don't have to re-establish their relationship with your company with each communication.
Focus and double down on your primary and current customers: Don't let your good customers fall through the cracks. The 80/20 rule applies to your customer base, I am sure. Prioritize the 20 percent of your customers who are producing 80 percent of your revenue. Have several "A" lists and focus your efforts on your best customers. Communicate with them frequently and don't wait for them to come to you. Meet their needs better. Provide more value, more responsiveness. Add value whenever possible. Remember: your competitors can compete on price and delivery, but you have a relationship with them that competitors can't take away keep those relationships alive and healthy.
Ask for referrals and turn the above 20 percent into evangelists for your company: Customers who really love a service or product will share information with like-minded people. Develop special offers for passing on information, emails, coupons, and offers and motivate them to do so.
Look up your dormant customers: They may be disgruntled now. Sure it's fun to get new customers, but finding new customers costs more. It's more practical in a downturn to provide additional value to your current customers. When customers make decisions in a downturn, they're likely to go with a more trusted source. Send them a gift out of the blue to remind them that you are still around. The theory of reciprocity works.
If a customer leaves you, go ask why: This might be the best free information you can get. Then make the proper adjustments.
Spin off costly customers: If you are a
business to business company, you know who your unproductive projects and customers are. They may be costing you more than they are worth.
Focus on mature, traditional and growing business sectors: Another B to B tactic, develop a plan to go after only business that are solid and that you are sure to get paid. Now is not the time to speculate.
Capitalize on your competitors' misfortunes: Make sure you know what your competitors are doing. Are they losing customers? Is there a way to get them? Are they going out of business? Can you buy/get their customer list? Sometimes it's a matter of being clever.
I love the story about Sharper Image and Brookstone. As Sharper Image declared bankruptcy earlier this year, Brookstone was ready. In order to "right the ship," Sharper Image dumped a large liability in its outstanding gift cards. Cancelling a liability like this is normal business practice when in Chapter 11. Its chief rival, Brookstone, took advantage of the situation. Brookstone announced that it would accept gift certificates from Sharper Image, and grant a 25 percent discount to anyone presenting one. This was mainly accomplished through publicity and Brookstone gained new customers without much of an effort.
I tend to be very optimistic, but I am getting an education in just how long this economic cycle might last. In my CEO peer group, we had a presentation just recently from a company that studies economic trends, comparing the rate of change to the year before. The growth rates of Gross Domestic Product, U. S and
Global Industrial Production, retail sales, customer sentiment, employment, construction and all other business sectors indicate that we still have more correction to make. According to the Institute for Trend Research, the U.S. will not start pulling out of this cycle until 2010 or early 2011. At that point, they predict that the U.S. will execrate out lean and mean and better than before.
The reality is that down economies offer a tremendous opportunity to streamline your business. Don't forget that some businesses grow during downturn, too. It is a great time to grab market share and gain the loyalty of customers and employees. As the economy recovers, what you do now will put your business in a stronger position than the competition. I hope your company is learning through this downturn. My
next column will focus on being creative with fewer dollars.
Is your company ready for this challenge? Hope is not a strategy.
Marlene Olsen is president of Olsen & Associates a public relations agency in Reno. Contact her through www.o-apr.com.
