[THRIVING IN A DOWNTURN ECONOMY: TOP STRATEGIES TO RECESSION-PROOF YOUR MARKETING]
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1 2008 Protocol Integrated Direct Marketing Lisa Cole-Paquin - SVP, Principal Marketing Strategist [THRIVING IN A DOWNTURN ECONOMY: TOP STRATEGIES TO RECESSION-PROOF YOUR MARKETING]
2 It s official. The country has officially begun its decent into a Recession. Legendary billionaire investor Warren Buffett believes that the economy has entered into in a recession and will continue to be in one for at least several more months. 1 If this prediction holds true, consumers will dramatically reduce spending and businesses will be more cautious about investments forcing other businesses to either downsize or close altogether. Because of this chain of events, people will lose their jobs causing a ripple effect in the economy. While a downturn economy is difficult for all, it is especially trying for marketers. Because of a commonly held view of marketing as a cost center, many companies will cut marketing budgets significantly and for the dollars that remain, there will be increased scrutiny for each marketing activity. Every dollar will be expected to show a direct impact on the company s ability to generate revenue. Adding insult to injury, companies will notice 66% of American Marketing Association s member marketers say the current state of the economy is having an impact on their marketing plans. 2 when their competitors are lifting their foot off the gas pedal and use that as an excuse to do the same. But here is the irony: For the companies that choose to see marketing as profit center, economic downturns present marketers with an opportunity to outmaneuver the competition and grow their businesses profitably. That s right. A recession presents Marketing with an opportunity. Consumers will still spend (albeit cautiously) and businesses will still need to invest in their infrastructure, provided there is a positive return on investment within a reasonable time frame. When the economy rebounds, the companies that continued to invest in marketing will have outmaneuvered their competition. Just as you learned from your years in high school, it is not always wise to follow the pack and do what everyone else does. Be a leader and you will see that this is a situation where you will be rewarded for your bravery.
3 In an analysis of the recession, Penton Research Service, Coopers and Lybrand, and Business Science International, found that better performing businesses focused on a strong marketing program enabling them to solidify their customer base, take business away from less aggressive competitors and position themselves for future growth during the recovery. 2 Reducing your marketing budgets in a recession could leave your company worse off (in terms of marketing momentum, profitability and market share) than if you continued to spend. In a study of U.S. recessions, McGraw-Hill Research analyzed 600 companies from 1980 through The results showed that business-tobusiness firms that maintained or increased their advertising expenditures during the recession averaged significantly higher sales growth, both during the recession and for the following three years, than those that eliminated or decreased advertising. By 1985, sales of companies that were aggressive recession advertisers had risen 256% over those that didn't keep up their advertising. 3 Source: MacTech Magazine
4 But now is NOT the time to maintain status quo. Just because I am providing a justification for continued spending, do not assume that I am an advocate for maintaining status quo. To thrive in a recession, Marketers should use this opportunity to re-energize their company while focusing on significantly improving marketing s efficiency and effectiveness to maximize resources. So now you may be wondering, How can my company thrive in a recession? and What should I be doing to ensure marketing is optimized? Top 10 strategies that will help your company thrive in today s difficult economy: 1. Eliminate waste. Consolidate multiple vendors to a full service integrated marketing agency. To manage integrated, multi-touch, multi-channel marketing campaigns using multiple vendors can consume all of your time, energy and resources. Time, energy and resources that can be better spent developing and executing additional campaigns to generate revenue. Using multiple vendors can also be costly as you will have redundant charges such as account management fees, setup costs, data maintenance fees, etc. 2. Don t spend an excessive percentage of your marketing dollars on branding exercises that are not designed to drive response behavior. You can build your brand while driving consumer behavior through brand response activities. 3. Increasingly invest in cost effective online marketing strategies. However, be careful not to waste your dollars by migrating all of your marketing efforts online. Don t waste A recent survey conducted on behalf of PRWeek and Manning Selvage & Lee (MS&L) by Millward Brown indicates that despite weakened economic conditions, over 75% of senior marketers say they expect spending for new media and online initiatives to increase in the next year. Marketers also overwhelmingly agreed that they would be most likely to cut from many other disciplines before turning to digital if forced to scale back budgets as a result of poor economic conditions. 4 your dollars looking for the magic bullet. Remember that
5 the magic is in the mix of media. The combination of these media and touches along with an effective messaging and offer strategy will bridge the gap between your sales process and your prospect's buying process. These touches need to be well planned, to the right prospects, at the right frequency, using a consistent message with the right mix of offers in the right communication channels. 4. Focus on quality not quantity of marketing programs. Don t cut corners. And most importantly, remember that the success of any campaign lies within the data itself. A simple, average campaign with great data will always outperform an extraordinary, innovative campaign with poor data. 5. Make an investment in a marketing database and strive to develop a 360 degree view of your customers. Consolidate all your company's potential data sources into a single marketing database; make this marketing container available to all of marketing's constituents, track every marketing activity and progressively understand your prospect s interests and needs. Make sure the database architecture is flexible, enforces data integrity at every step of your marketing process, has the ability to store ALL marketing touches and provides visibility into every stage of the revenue pipeline for all of Marketing s and Sales constituents. Every campaign response, every web page they visit, every link they click, every white paper they download tells you about their needs and interests. In fact, they will qualify themselves for your company with every Just 15% of companies surveyed rate themselves extremely effective at integrating disparate customer data sources and repositories. 5 interaction with your brand if you let them. It is up to you as the marketer to use that intelligence to improve your marketing effectiveness. 6. Don t confuse your SFA/CRM tool with a marketing database. Make sure your marketing applications and sales management (CRM) systems are being used for the processes in which they are best suited. Best-inclass marketers will leverage their marketing infrastructure in a way that maximizes the effectiveness and efficiency of each tool. For example, suspects will remain in the marketing system until they are qualified
6 and sales-ready at which time they are passed to the sales (CRM) system, where all subsequent sales interactions are managed. Inter-mingling the data from these systems at the wrong times can significantly diminish the effectiveness of both systems and limit the productivity of both Marketing and Sales. 7. Fully integrate your marketing infrastructure (marketing database, engine, web-site and SFA/CRM tool) by coordinating Marketing and Sales activities so these two functions can work together productively. Using real-time synchronization of marketing data with sales contact and pipeline information, sales reps will know exactly how marketing campaigns influence their pipelines right down to their prospect's or direct mail response, website visits, downloads and registrations. This link from campaign data to pipeline and revenue allows for true closed-loop reporting. 8. Be targeted and relevant by using the power of analytics to leverage the data you ve invested in. Know your customers. Over 50% of global marketers report that they have fair, little, or no knowledge of the customer demographic, behavioral, psychographic and transactional data. Only 6% say they have excellent knowledge of the customer. 6 Furthermore, according to a study by the CMO Council, only half of the companies surveyed report having a strategy to further penetrate or monetize key account relationships. 7 Learn which ones you can afford to continue marketing to and which ones you shouldn t. Then shift from a focus on acquiring new customers to identifying and retaining your most profitable customers. Thanks to a number of research studies, everyone is now aware that it is approximately 8 to 10 times more expensive to acquire a new customer than to retain an existing customer. The problem: few marketers keep this in mind when it comes time to develop a marketing plan. Lack of customer data sharing, integration and insight is undermining competitiveness, retention rates, revenue and profitability among global marketers. 8
7 9. Leverage the power of automation for your marketing programs as it is the only way to truly do and achieve more with less marketing resources. Marketing automation tools provide Marketing with the ability to easily design and execute action-oriented, lights-out campaigns intended to nurture the dialog with prospects in timely and relevant manner. These campaigns automate marketing communications, providing the ability to trigger follow-up activities based on specific consumer actions such as whether the prospect downloaded a white paper, attended a webcast or visited a specific web page. And by using behavioral analysis based on a prospect s web-based actions to identify the right information about interests and the right time to respond to those interests, Marketing and Sales efforts will become increasingly more relevant and timely consequently increasing sales conversion rates. 10. Measure and account for marketing investments to demonstrate Marketing s value. Here s a three step plan that when executed consistently will demonstrate Marketing s impact on revenue generation: o Obtain agreement from senior management on the definition of return-on-marketing-investment (ROMI). o Draft a marketing plan with corresponding ROMI projections for each initiative. o Monitor implementation and execution of marketing programs then report on preliminary results at key milestones. Use these results for continuous optimization of marketing programs. Even if you disagree that we are currently in or heading into a recession, it is clear that the economy is experiencing a downturn that can be seen as a reason for failure or an opportunity to thrive. It is your call. If you choose to use this downturn as a catalyst to drive efficiencies and effectiveness into your organization, your company will thrive while the rest will truly struggle to survive with their jobs and marketing budgets intact.
8 About Protocol Integrated Direct Marketing Protocol Integrated Direct Marketing is a full service provider of integrated marketing services aimed at helping marketers identify, acquire, and retain customers profitably. Protocol offers proven expertise in both business-toconsumer as well as business-to-business marketing across industries. Protocol s primary services include: Strategic planning Creative development Database development Analytics Marketing automation Marketing campaign development, execution, management and measurement across all communication channels including , direct mail, online and the phone Call for more information about Protocol s integrated marketing services or a FREE Recession Proof assessment of your marketing efforts. Footnotes 1. Farrell, Andrew. Buffett: Recession? Yes. Opportunity? Yes. Forbes. com. March 30, Recession Study, Penton Research Service, Coopers and Lybrand, and Business Science International AMA Survey, May Study of U.S. Recessions, McGraw Hill Research, MacTech Magazine, mactech.com. 5. Is Digital Marketing Recession Proof? survey, PRWeek and Manning Selvage & Lee (MS&L) 6. Business Gain from How You Retain, CMO Council Executive Summary, cmocouncil.org 7. Business Gain from How You Retain, CMO Council Executive Summary, cmocouncil.org 8. CMO Council Study, 2008.
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