How we respond to a recession dictates our success (or failure) not only during, but more importantly after, the market downturn. Companies that can hold their ground through a downturn often become market leaders afterward.
In hard times businesses often look to eliminate expenses, but what about marketing expenses? If a marketing department is properly functioning there should be a direct correlation between our marketing budget and our accounts receivable. Based on this we would all agree that cutting the marketing budget would be a poor idea in a recession. What recessions often remind us, however, is that the expenses of many marketing departments do not have a direct correlation to our accounts receivable. Often marketing departments focus on producing glossy brochures and professional websites that do not necessarily function to support the bottom line.
Refining and Reshaping Marketing
This said, down turns in the economy are not the time to cut our marketing budgets; rather it is the time to refine and reshape our marketing expenditures to truly focus on bringing work in the door. This refining and reshaping should yield an increase in the return on our marketing investment dollars, increasing the correlation between those expenditures and our accounts receivable. Here are some common changes that you can evaluate to achieve this goal:
- Increase your advertising dollars instead of giving your website a facelift.
- Incentivize your sales staff instead of getting more mugs with your logo on them.
- Cross-train a key person on your marketing staff to provide business development support instead of redesigning your company logo.
- Target some new relationships before RFPs and proposals come out instead of using the shotgun approach to pursue proposals (pursing RFPs and proposals that you have no business pursuing).
The Common Recession Mistake
Some functions/expenses of marketing can, and should, be put aside during a recession so that those funds can be spent on marketing functions that are more effective at bringing work in the door. A common mistake during a market downturn is to eliminate the ‘extra’ marketing expenses, but failing to redirect the money towards marketing that will enable you to compete in the highly competitive recession market.
What to do
A recession is the perfect time to sit down with the head of your marketing department to reshape your marketing approach. Focusing on the marketing functions and expenses can help support your bottom line.
A Last Note
So, why are firms that market heavily during a recession positioned to succeed post-recession? Because people are our most valuable assets, and providing them a place of security during a recession ensures that your best employees will be around as the market picks up momentum. Also, a recession provides a great opportunity to hire the best and brightest from your competition if you are able to keep your bottom line intact. After the recession you then have a foundation for growth and the ability to become a market leader.
Lindsay Hilton with the SMPS Southeast Louisiana Chapter recently sent me this e-mail about event promotion:
“I am a board member of a small SMPS chapter (Southeast La., established last year) that is struggling to engage members to attend our events… Do you have any advice on how to entice our membership to come out to our events? For example, we try to host bimonthly social mixers at popular locations but the last mixer only turned out about six people. We also hold monthly luncheons with informative guest speakers from all over the country. This month’s guest is Randle Pollack. Even our luncheons produce meager results (about 20 guests attend). Any advice would be greatly appreciated! Thanks!”
I can’t say that I am an expert on events, but I shared with Lindsay my experience. I hope that you find it beneficial as well:
Thanks for the e-mail! I have likewise struggled previously to build strong attendance at programs and finally identified a couple of keys that have helped build the SMPS DC chapter lunch programs and the Design and Construction Network. They might not fit what you are doing perfectly, but they should give you some ideas. Here they are:
Provide a massive amount of value
- Ensure that you have great speakers (I know you are already doing this in that you have Randy Pollock speaking, he is one of the best marketers in the industry).
- Build programs that provide immediate value. For example, SMPS DC has an annual University program that brings in the Facilities Directors from all the local universities. The moment we invited our clients to speak, the principals from our firms started showing up to meet with the clients. Also, we asked them to talk about what jobs they have lined up this year so that everyone knows what is coming down the pipeline.
- Make certain that the entire event is designed around great networking. Probably the greatest value that people get from attending programs isn’t the speaker, it is the networking. Thus make certain it is painless to network at your events. Also, consider trying to get people to attend that others would want to network with.
Leverage WOM and viral marketing
- Word-of-mouth (WOM) marketing has been the single most effective tool for increasing attendance that I have seen. Instead of just sending out blast e-mails about an event (which you should still do) build a group of people that are responsible to invite people during the course of regular conversations. So, if you send an e-mail to a friend that might benefit from attending ask if they are going to be at the program and let them know that you are going to be there.
- Viral marketing is the art of building hype about an event. Although much more difficult to achieve (I have not yet been able to make it happen for our SMPS lunch programs) it was what made the first Design and Construction Network happy hour a success. Viral marketing excites people and builds a buzz about the event.
I hope that helps! Please note that I am not the expert on this, but it is fun to leverage our marketing backgrounds to solve problems!
Back in my college days I was living in a small town south of Rochester, NY. Winters in New York have a way of rapidly rusting mufflers, so I found myself dragging a muffler into a repair shop (literally) in the middle of January to get a quote for a new muffler. When the owner learned that I couldn’t truly afford to get the muffler fixed he did the unthinkable: he took out some sheet metal and welded my old muffler back together to get me through the semester. Why? He understood the power of being selfless.
The power in helping
There is an innate power in helping other people just because you want to and not because you want something. John F. Kennedy’s speech that included the words “ask not what your country can do for you – ask what you can do for your country” was so powerful because it represented the idea that collectively and individually we are better when our focus is outward rather than inward.
We agree, it sounds great, but what do you get out of being selfless? Nothing and Everything. The moment you are selfless you receive nothing but a feeling that makes you remember what it is like to be appreciated (Perhaps that is more than nothing). However, in business when you are regularly selfless you also get everything: a network of clients, friends, and relationships that want to help you and want you to succeed.
If you are under the weight of achieving your own success, perhaps it is time that you consider that the easiest way to achieve that success is to be selfless.
Developing and introducing a New Business Line is nothing less than a daunting task. The good news is that many have gone before us, providing us with decades of exhaustive trial and error research that can help to identify successful approaches to establishing new business lines in existing companies.
I have found three common variables associated with business lines that have launched successfully:
Three keys that lead to success in Developing and Introducing a New Business Line:
- The least expensive/most efficient way to bring a new service or product to market is almost always to target your existing clientele.
- New service offerings that are similar to or an offshoot of your existing services increase their success rate and provide a shorter duration to profitability.
- The best predictor of success is implementing demand-driven business lines that solve existing problems.
Published March 5, 2009
Tags: Anderson & Associates, Anne Hart, Hankins and Anderson, Kathryn Hudock, Keli Ratcliffe, keynote, LandMark Design Group, Linda Smith, SMPS VA, Whitlock Dalrymple Poston & Associates
It was truly an honor to present the keynote address at Society for Marketing Professional Services (SMPS) Virginia annual conference this year. I was humbled by the response and the great people of the SMPS Virginia Chapter.
Thank you SMPS Virginia!
“The way you presented gave me a whole new slant and also some great ideas to become more effective … It was invaluable. … Again, bravo – you got us all thinking!”
Director of Business Development
LandMark Design Group
“Again, thank you for your excellent presentation at the SMPS Virginia Conference. I thoroughly enjoyed your discussion, and took away many tips to share with my colleagues.”
Hankins and Anderson
“The seminar was extremely worthwhile for me… Thanks again for taking the time to speak to us about a topic that is so fundamental in our industry and life in general.”
Whitlock Dalrymple Poston & Associates, P.C.
“I just wanted to drop a quick note to thank you for your presentation at the SMPS VA conference. I thoroughly enjoyed it, and I think the information will come in handy in our firm here in Blacksburg. You made some very important points and I think that your tips are extremely useful. Thank you again. I appreciate the tools that you make available to the marketing community.”
Keli Ratcliffe, CPSM
Public Relations Manager
Anderson & Associates, Inc.