Marketing in tough times 'what winners do!
You don't need a degree in economics to understand that the markets are sluggish around the world. In general, companies are nervous. A level of investment paralysis has occurred. These are uncertain times. When will it change? When will the good times come back? How can I maximize my organization's market position during this murky financial period?
Don't be caught looking in-ward
Clearly, today's business environment is recessionary and filled with challenges. Customers expect more and hold higher value expectations. Stakeholders look for increased returns on their investment. The competitive climate has moved to the world stage and is more intense. Technology continues to compress product life cycles from years to months, and in some cases weeks. The world-manufacturing sector is in recession.
In a time of uncertainty (when is it not some form of uncertainty) it might be tempting to pull back. Under the guise of ‘being prudent' senior managers begin to contract their thinking. The organizations focus bears down on plans to cut back while finding logic in not investing. Advertisement, creative marketing programs and seeking new business takes a back seat to cost cutting. Putting off new product ideas or delaying product introductions becomes appropriate behavior.
This thinking begins to pervade the organization. Soon everyone is looking for ways to lower costs. People find ways to rationalize cuts in customer service, or prudent (there is that word again) ways to lower quality standards. Increasing discounts, or lowering your bid to ‘get-the-job' becomes the norm. Generally the organization begins to over-commit and under-deliver.
Your organization may now be in a prudent mode, but missed an opportunity to grow by taking market share from timid competitors assuming the same ‘prudent' position.
Now's the time to act
Remember that economic black clouds also hold silver linings. Opportunities always exist, but you have to be looking. Companies that seek new business potential and muster the courage to act now will gain competitive advantage, while propelling them to an increased level of market leadership as the economic turn-around occurs.
What do winners do during turbulent times?
Winners advertise, advertise and advertise some more
In funky financial times the first cut is to the advertising budget. Why? Because it appears to have no short-term business impact, while providing immediate cost reduction. Unless your company is in danger of going belly up, this is exactly the wrong thing to do. Anyone can perform this short-term thinking.
Advertising during tough times holds tremendous value. It keeps alive the connection between you and your customer. It let's them know you're doing fine and still in business. Don't under-estimate this point. Advertising at this time communicates a powerful message. It says you are strong, in it for the long-term and re-enforces their decision that they made a good choice.
Advertising during tough times frightens competitors and will gain business. Customers look for better deals and don't seem fearful of moving to other companies that appear to be stronger during uncertain times. Give a potential customer the visibility of your company through advertising. Usually, more individuals will see your ads because fewer people are advertising during these times. Besides, I usually find that periodicals and mediums are more than willing to reduce their rates. Some cutting them in half or more.
McGraw-Hill evaluated the performance of 600 industrial companies following the 1981-1982 recession. Their study found that business-to-business firms that maintained or increased their advertising, during the recession grew their sales 275% from 1980-1985. Sales of those firms that cut their ad spending averaged only 19% growth during the same period.
Another study in 1990 examined 339 consumer businesses to determine the relationship between advertising spending and market share during a recession. The study found that those companies that aggressively increased their ad spending (20-100%) gained 0.9% share of market. Those that moderately increased ad spending (1-19%) gained an average of 0.5%. Those that reduced ad spending gained 0.2%.
An earlier study was conducted with industrial product and service companies. It yielded similar results. During recession, company market share increased with ad spending. Businesses increasing their ad spending "gained an average of 1.5% market share."
There is a correlation between advertising, market awareness, and business
Winners challenge sales Reps 'put more "feet-on-the-street"
Nothing happens until a customer decides to purchase and that usually occurs when a salesman is involved. Get creative. Find ways to spark interest in your company and products. Make a list of customers that haven't purchased in 6 months. Have your sales reps call on them.
Who are your best customers? Make sure you protect these accounts during tough times by having your sales reps key in on them. You'll be amazed at how often added business occurs.
Make a list of all leads less than 6 months old. Everyone knows that leads aren't followed up properly. Have your sales people follow up on these leads again. Implement a pro-active telemarketing program for leads. Find out a few of your competitors key customers. Formulate an aggressive plan to ‘take-away' these accounts. Wrap all these plans around added incentive programs. Added incentives get the sales reps attention motivating them to spend more time prospecting as well as keeping your accounts.
Put more "feet-on-the-street". Whether you're trying to win a war or gain market share. Those with superior forces usually win. Find ways to re-direct money to hire additional sales people. Review your present sales force. Now would be an excellent time to increase your minimum acceptance level for sales performance. Sadly, you may find that 80% of revenue is generated by 20% of your sales people. Do the math. Get rid of the non-performers and you'll have plenty of money to expand your sales force with fresh, motivated individuals.
Winners invest in growth 'in bad times as well as good
Don't take your foot off the investment pedal. It is tempting to reduce your R&D budget, even a little to make things easier. Don't fall into this trap. When you look at companies that consistently grow, you'll find that they invest wisely in their R&D programs during uncertain economic times. When times are good they invest even more. New products are the lifeblood of most organizations. Defining a need and filling it with your technology is the best way to get through turbulent times and set-the-stage for renewed growth in better times.
Move products to market faster. Develop a few "quickie" projects that enhance or add to present products. Find ways to get these products in the hands of your sales reps sooner than normal. Remember that a sales person needs a reason to visit a customer. It's even more important to give them that reason when times are slow. More often than not, while he is introducing the new or enhanced items, he will sell legacy products or get a line on a new project. I've seen this time and time again.
Winners stay connected with customers 'enhance their buying experience
It's always about the customer. Tragically, during rough economic times, companies become in-ward looking and lose focus on the customer. Companies begin to find ways to cut costs and usually this means reduced service to the customer. The toll-free number goes. The financial people convince you that reducing the warranty will help reduce corporate liability. You ask about all the sales literature being used and decide a 10% cutback won't hurt you. And so on. Reject these and any other idea that is a backward step in customer service level.
Again, get creative. Many customer service ideas cost little and mean much to the customer. Talk to you customer more during turbulent times. Find out what their business is doing?
Determine how you can better service them..Find ways to make their buying experience even better. When was the last time the CEO or President of the company sent a letter to your customers thanking them for their business? IT technology makes this too easy not to make it a routine and something that can be inserted quickly. Do you routinely survey your customers on your service, product, quality level, etc.? If not, begin it today. IT can help and e-mail makes it easier and cheaper than ever. One caution on surveys. Make sure you act on the feedback. Assign a team of sales people to each customer. It's easier than it sounds. The team should consist of an inside sales support person, a technical person and a salesperson that leads the team. Make it known to your customer that they have a special team working for them. Proactively and timely communicate bad news to your customer. If you can't meet the delivery you quoted, let them know. Honesty is still the best policy.
Use technology and the Internet. It's accepted, pervasive, and efficient to use. There are ways to inform without being intrusive to your customer and potential customers. And the good news it that it's inexpensive too. Create a weekly or bi-weekly eNewsletter. Send out information on products or programs. Revisit legacy products. There must be plenty to brag about.
All these points seem easy, perhaps trivial, but add them up and they are a powerful reason your customer will stick with you during tough economical times. It might even garner you new business.
Winners target a new customer or industry
During my time as CEO of Action Instruments, a leading provider of industrial instrumentation, we had on-going programs that attempted to seek out new business. Results were mixed. One year we hired a new regional manager with exceptional selling skills, but little direct experience in the petro-chemical, and automation areas.These were traditional markets for Action Instruments. At first we tried to expose him to our markets and train him in our way of doing business. He had other ideas, and to this day I'm glad he did.
This RM looked around to find out who was spending money and why. He found out that the semi-conductor industry was a good choice to investigate. He then decided that our technology (not our present products) would be competitive. Within a few months he introduced us to the semi-conductor market. He methodically made a targeted list of potential customers and visited each one personally. Within 6 months he had us on the bidders list and within the next 6 months we became the successful bidder. We went from zero revenue in semi-conductor to over $2m/year of new business. We enjoy this business today more than 5 years later. Aside from gaining entrance into a new market, we implemented his sale methods with other sales people within the company. Clearly, this helped accelerate the growth of the company 'in good times and in bad.
You can do this too. Invest today and motivate your people to investigate and get new business.
Do you have faith in your company? Do you trust your people, programs, and long-term vision? If so, then stopping, delaying or eliminating programs during tough times is exactly the wrong strategy. I'm not talking about being foolish with budgets and programs. Depending on the economics and revenue realities, you must pay attention to your budget. However, keep your eye on the longer-term. A balancing act to be sure, but one that can pay dividends if done right.
Someone I respect once mentioned to me that you can't tell a winner when his winning. You tell a winner by what he does when times are tough.
Times are definitely tough...Are you doing things that make you a winner?
About the Author
Frank Williams is a marketer. With many post graduate courses in management, leadership, marketing and technology to his credit, Williams is a widely respected speaker, author and technologist. He has significant knowledge in marketing strategies and is the founder and CEO of Global Marketing, Inc. 'a leader in business, marketing and sales consulting
Other valuable articles can be found at: http://members.cox.net/glmarketing/glmarketing/index.htm