Posts Tagged ‘recession’

Using Marketing Research to Lead You Out of the Recession

June 8, 2009

Some economic indicators are starting to turn positive and suggest that the worst of the recession may be over. Even so, companies continue to cut their marketing budgets and this is perhaps the very worst time to do so. Cutting marketing expenditures at this time in the economic cycle is akin to stopping contributions to one’s investment portfolio during a bear market – in each case, one stands to miss out on the rebound.

Right now, marketing research is more critical than ever. Yes, business is still slow. But marketing research can be used ever more strategically right now. Your margins might still be tight, and you may still have some cuts to make. Many travel-related industries, especially hotels, are making use of marketing research to identify which amenities they can either eliminate or charge extra for, without negatively impacting customer satisfaction and/or loyalty. You should consider doing the same.

Marketing research can also be helpful in gauging the optimism of your customers and prospects, so that you can plan ahead for the future. Conducting marketing research right now can also inform you of what your target customers are substituting for your product or service to cope with these hard times. This information can help you accommodate them and/or find other ways to fulfill their needs.

You can also do marketing research relatively inexpensively with survey tools such as SuveyMonkey, Zoomerang, Survey Gizmo, etc. As long as you understand survey theory and sampling, you should be able to use these tools without compromising research integrity. You may even be able to reduce the size of your typical samples without sacrificing much accuracy. And you may be able to rely more heavily on secondary research. You can even track your competition with online tools like Compete.com.

Whatever the case, don’t abandon marketing research, especially now. Some carefully thought out, informal research is better than no research at all. Marketing research is the compass that will help you navigate out of these hard economic times.

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Cutting Your Marketing Investment can be Hazardous to Your Company’s Future

March 6, 2009

In a recent post on an online community for small businesses, the owner of a residential housepainting company wondered whether he should continue with his annual $50,000 direct mail campaign, the economy being what it is.

It is not uncommon for companies to slash or even eliminate marketing expenses during a recession.  But while cutting marketing can have immediate benefits to your bottom line, it can do long-term damage to your future sales, market share, and even your brand.

Companies often mistake marketing for an expense, when, in fact, they should consider it an investment.  After all, they are putting forth dollars into vehicles that are expected to return in the form of future sales, customer loyalty, and brand equity.  Cutting off this investment also cuts off any return they may generate.

Granted, when money is tight, you will need to cut budgets, even possibly marketing.  But the trick is to do so strategically.  Now is the time to take a serious look at all your overall marketing strategy and the tactics that comprise it.

Look at all the marketing tactics (newspaper ads, yellow pages, direct mail, etc.) you’ve employed in the past year as if they were a portfolio of stocks.  How much money did you invest in each during the year?  How much of your sales can you trace back to each?  How much potential sales can you trace back?  In doing this, you determine the current and potential return on investment (ROI) for each marketing tactic.  Cut out the tactics with the lowest ROI and concentrate on or expand those with the highest ROI.

Also, experiment with less costly, high potential ROI marketing tactics – social media marketing, blogging, Twitter, etc.  These vehicles can be helpful in creating buzz about your product.

And most of all, don’t forget your customers – especially not your most loyal and frequent ones.  Send them notes saying you appreciate them (rather than their business).  They’ll understand what you mean.  Also, in your communication with them, don’t try to sell them directly.  Instead, ask them questions about problems and challenges they are facing.  Show them that you care.

Companies who continue to market – and market smartly – during these economic times can gain loyalty from customers, promote awareness of their brand, and gain market share from their competitors.  Let one of those companies be yours!