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© 2009 Smart Business Network Inc. Reprinted from the March issue of Smart Business Dallas N ow is the time to win big. If you go against the flow, you could experi- ence remarkable opportunities to dif- ferentiate yourself. “According to one study, during the last recession, 25 percent of businesses aggres- sively increased marketing expenditures and, as a result, increased market share 2.5 times the average for all businesses in the post-recession period,” says Jonathan Fisher, CEO of BrandExtract. “Conversely, during expansion periods, 80 percent of businesses increased advertising budgets with no improvement in market share — because competitors did the same thing!” Smart Business asked Fisher what mar- keting strategies can fuel your company’s success in today’s economic climate. How does the challenging economy affect marketing? The stronger a company’s brand recogni- tion, the greater the chance it can win busi- ness and retain price points. Business own- ers are demanding returns and tighter value propositions. Consumers are looking more closely at their purchasing relation- ships. This means buyers want proven products or service providers they know and trust. Cutting marketing budgets in down mar- kets is one of the worst moves a company can make. Case study after case study shows that a down market is one of the few situations when a company can differenti- ate and gain ground on their competition — without increasing last year’s budget. In tight markets, businesses are able to buy media, services, printing and more at dis- counts. This translates into increased bot- tom-line gains unlike any other time. Why is using the right strategy important? Strategies that yield quality over quantity have proven to be the most effective when you must do more with less. You should also make every effort to increase your bond with current customers to protect against competitors. If you have the cor- rect plans in place, you can thwart the aggressive tactics of other businesses that are desperate for business. How can companies in today’s economy evaluate their marketing? Aside from looking at the returns, com- panies should view the cost per reach and conversion, both short and long term. Marketing departments will defend their investments by touting numbers like hits on the Web site, but business owners should look closely at the cost to acquire these leads or hits. By comparing the cost to acquire these returns against each mar- keting channel, you will see a holistic pic- ture of the expense of marketing efforts. What should be considered in developing a new plan? Marketing plans are investments and, like retirement portfolios, should be diversified. This means including a mix of the tried-and- true on up to highly creative (such as new media) strategies and tactics. Also, plans should be geared to the goals and personal- ity of the company — generic, one-size-fits- all methods rarely work. One of the most effective methods for developing plans in a down market is to consider each quarter an investment over the next. We call this momentum market- ing, as you are building on the momentum over each quarter. If your agency or mar- keting manager is proving that their strate- gies are working, be willing to increase the budget. This approach will yield greater returns and not stifle the progress your marketing investments are making. How can a business measure marketing ROI? Marketing has many measurements, ranging from brand awareness to traffic to sales. Generally, we look at the equation ratio of leads to prospects to proposals to conversion rates, but every company’s goals are different: some want to reduce attrition, others are seeking to reverse a negative trend, and still others are zeroing in on aggressive growth. An important, though often neglected, point is that you need to invest in establishing your current baseline for your measurement to have meaning. Any other points to share with readers? ■ Beware of discounting fees unless the price reduction is truly strategic. ■ Promote value and benefits over fea- tures. ■ Watch for market demand because it may lead to new services, products or packages. ■ Talk with your customers and form focus groups with strategic partners and vendors, as they will be your best referral sources. ■ Concentrate media buys and agency services for negotiating power. ■ Get creative with balloon contracts and multiyear retainer options to save money. Now is a perfect time to negotiate long- term contracts at reduced rates. Remember, the decisions you make in a down market will have an enormous impact on your brand. If you let it slide now, it will be twice as difficult and expen- sive to get it back to where it is now. << Unparalleled opportunity Don’t miss out on the best time to grow your business. Interviewed by Elizabeth Saunders JONATHAN FISHER is the CEO of BrandExtract, an integrated branding and communications firm that guides growing companies by providing strategic branding solutions, marketing communications, advertising, print and interactive services. Reach him at (713) 942-7959 or [email protected] or go to the company’s Web site at www.brandextract.com. Jonathan Fisher CEO BrandExtract Insights Marketing & Branding is brought to you by BrandExtract Insights Marketing & Branding
