Navigating an Economic Slowdown

Sales are slow, the checking account is getting low. You've got to cut costs and/or raise revenue. It's tempting at times like these to look at your ad budget for solutions. That's actually not a bad thing to do, but your aim should not be to reduce the amount of advertising, just the cost.

The last thing you want to do during a prolonged slow period is reduce or eliminate your public profile. People may not be in a buying mood today, but when they are, they are much more likely to head for the familiar. If you've been out of sight, you've been out of mind.

There are ways to stay visible and cut costs, especially when business is slow and you've got more time on your hands. Consider using doorhangers and newspaper inserts as opposed to direct mail. Use regional newspapers and organizational newsletters as opposed to the major daily. Spend more time attending networking events. Take advantage of events large and small where you can set up a table and hand out information and promotional material. Consider hosting a network event or fundraiser. Send out update letters with your regular invoices. Develop in-store or in-office advertising displays. You can also use any extra time you find yourself with to get around to those tasks you'd been putting off. Finish the website. Start the blog. Update the business card.

This is also the time to evaluate your product and service line and see what needs updating, replacing or eliminating. People love new stuff. Give them some. While you're at it, put anything new and different into a 100 word press release and send it to the local media. Follow up with a phone call asking if they received it and if it's something they'll consider running.

Don't think of a slowdown as crisis time. Think of it as half time. Review your past performance. See if there are lessons to be learned, adjustments to be made. Get ready for the next round. When they economy does come back, and you've got to assume it will (there is absolutely no point in assuming it wont), you want to hit the ground running. Don't get caught flat-footed.

Need Customers? Go Get 'Em!

By Timothy Wenk

In our society there are two kinds of people. MarketERs, and marketEEs. The people who create and disseminate marketing messages, and the people who receive (we hope) and react to those messages.

In marketing, there's a fundamental truth that is counterintuitive: "The initial spark that leads to the vast majority of transactions, emanates from the marketER."

When I say that truth is counterintuitive, I mean the typical consumers or potential customers believe the 'opposite.' What they believe would appear to be perfectly reasonable. Something like, "Back off marketers! If I want to find something, I'LL go out and I'LL find it for myself. Your ads and other marketing efforts have no effect on me. I will behave in exactly the same way (buy or not buy the exact same things), with or without your marketing efforts." Again, that seems to make perfect sense.

The average marketEE believes this: "The initial spark that leads to the vast majority of transactions, emanates from the marketEE."

Problem is, this is incorrect.

And if you market your small business as if it IS correct, you are making a fundamental mistake. Possibly a fatal mistake.

The truth is, the most effective marketing happens when the marketER reaches the marketEE, not the reverse. Further, the marketER must reach the marketEE, whether the marketEE wants to be reached or not! I know that's a bold statement, and it flies in the face of 'modern,' so-called 'permission marketing.'

But let me build my case...

Here are two words which, if you take heed to the lessons they can teach you, could change your business for the better: END CAPS. End caps, as you may know, are the ends of the aisles in stores. Let's take supermarkets, for example. Ask any supermarket manager why the end cap 'real estate' is so valuable. He or she will tell you, whatever item is placed there 'automatically' sells much better than otherwise. How much better? Well, one manager I spoke to said it's a boost of about 60%. Same item at the same price as the one sitting on the shelf where it usually is. He said, if the item's on sale, it's an increase of 100%, compared to the same item, at the same lowered price, on the 'regular' shelf!

Think about that. Buy merely putting a product in front of the consumer's face -- whether he asked for it or not -- produces an increase in sales of 60-100%. The ONLY difference is creating that 'initial spark.'

Here's another example: Your local newspaper. Let's agree that the ads therein are effective to a certain degree. Keeping that degree of effectiveness in mind, let's try an experiment. Let's rearrange the paper's format. Let's put all the ads in one section, and all the news in another section -- and let's try that for several months. What would be the result? Answer: The paper would go out of business. But why? Of course, because everyone would read the news section, and ignore the ad section, which would cause the ads to LOSE whatever effectiveness they had before the change in format. To the consumer, the ads are an unnecessary annoyance. If the audience is given a choice about viewing the ads, they will choose NOT to view the ads, in general. In other words, the effectiveness of the ads is dependent on their intrusiveness. Now I KNOW no one wants to hear that, but it's true.

Here's another example: McDonald's. You already know everything there is to know about McDonald's. You know (pretty much) where they are, how to find one, what their menu is, what the food tastes like, how much it costs, what you 'experience' will be like when you go there, etc. If you wanted to eat at McDonald's, you certainly would have no problem doing so. So, why do they advertise? What in the world could they POSSIBLY tell you in an ad, that you don't already know? The answer is, telling you something you don't already know is not the PURPOSE of the ads. Bugging you is. Bugging you repeatedly.

Because McDonald's knows (and so should you), "The initial spark that leads to the vast majority of transactions, emanates from the marketER, not the marketEE."

If that's NOT true, then McDonald's is wasting millions on ads every year! But it is true.

Let's put it this way: What would happen to McDonald's if they were to STOP bugging you repeatedly? They would go out of business, because ALL 'sparks' (bugging) would then emanate from the competition -- and the vast majority of the transactions would go to them.

It's a shame, but so-called internet marketing has made this consumer's myth even stronger. The temptation to rely on search engine and pay per click marketing comes from believing (incorrectly) that the group called, "my potential customers" is exactly the same group as the one called, "people already searching for what I offer." That's not so. That's thinking like a consumer.

Let me ask you this: Have you ever been to McDonald's? Have you ever been to McDonalds.com?

The lesson here is, don't market your small business using a "consumer's mindset." Realize it is YOUR responsibility to send out as many 'initial sparks' as you can. Don't wait for your potential customers to come looking for you, believing they will behave in the same way (buy the same things), with or without your ads. Look for ways to DELIVER your marketing message -- yes, even without your potential customers' "permission." And, most of those ways can be found OFFline.

___________________________________

Timothy Wenk, marketing consultant, can be reached at 518-448-6642 and TW@USPexpert.com .

You down with "OPP"? Other Peoples Products

Everyone likes to get free stuff. This is why it's such a great promotional tool. But most businesses give away their own products or some little trinket with their logo on it. That's fine, but consider another alternative: OPP, Other People's Products.

Free stuff can generate traffic, good will and awareness. It doesn't have to be your stuff though. Give away a free coffee from a nearby shop, an order of chicken wings from a local restaraunt or wing joint, a free oil change. The possibilities are endless and it can be just as inexpensive as giving away your own stuff.

Talk to your network partners or neighboring merchants. Many of them will agree to give you the items free if you pay for the printing of the coupon and limit the amount you're going to give out. For example, a free coffee with a purchase of $x or more, or a free apple pie certificate included with an invoice.

Promotions like these can generate value for both the business giving out the free goodies and the business providing them. Your customers will love it and they'll remember you, even if you are a hardware store giving away hamburgers. The idea is to make their visit to your establishment pleasant, enjoyable, fun, something they want to do again.

Free stuff is a great promotional vehicle, especially when the economy is slowing down and consumers are feeling tight on cash. Be a hero, get down with OPP.

The Value of Raising Your Profile

Raising your profile in the marketplace, promoting awareness, branding, whatever you'd like to call it, can greatly enhance the effectiveness of your other marketing efforts. How should one go about it? How much of one's budget should one dedicate to it?

Marketing designed to raise your profile or increase awareness of your business includes things like calendars, event marketing, newsletter sponsorship, networking and other activities that primarily make your company name and image visible rather than promoting a specific product or offer. It doesn't have an instantaneous, at least not immediately trackable impact, so many businesses don't recognize it's value. If you ask a customer why they came in today or how they heard about you, they're not likely to say, "well, I saw your logo at the Fun Run and just decided to drop by." But these types of ads do have an impact on the effectiveness of your other ads.

A customer may report that they responded to an offer you placed in the paper. What they may not report, or even be aware of, is that they responded to your newspaper ad because they were familiar with the name or logo. They may not know where they've seen it before, but they have. Consumers are more likely to respond to companies that they've heard of before, than one they're seeing for the first time.

Awareness ads are usually targeted at general audiences. They don't require a tailor-made mailing list or a lot of demographic research. They can be as simple as a logo on a concert or event poster, or a business card ad in the homeowners association newsletter. Networking is another form of profile raising. The idea is to make it more likely that when your company name comes up in conversation, or someone sees one of your other ads they'll say or think "oh yeah, I've heard of those guys".

Think of profile raising or awarenss ads like adding gas treatment to your tank. You'll get more milage out of the rest of your marketing. A good rule of thumb might be around 20% of your ad budget, although it can be less if you use your imagination. A banner can be used again and again, as can car magnets and decals, shirts and hats. Link exchanges with other websites can often be had for free. Co-op marketing can give you wide exposure at a very low cost.

This part of your marketing tool kit can inspire people to seek more information and take a closer look at your other material. Of course you have to be ready to provide the more detailed info when they come looking for it. Have brochures and flyers on hand, ready to email, mail, or hand out upon request. Make sure your employees are up to date on your latest promotions and ready to answer questions.

Good marketing campaigns are like good songs. A nice mix of vague and specific, familiar and new, predictable and unexpected. Strike a chord with the marketplace. Draw them in with a catchy refrain and then give them the lyrics.