Value-Added Advertising
Don’t let a difficult economy derail your advertising. Here’s how to stay the course.
For small businesses fearing the effects of a recession, the marketing budget is an attractive target for cutbacks. But before you cancel your advertising efforts, consider that the economy may be providing your business with its best marketing opportunity in years. Here’s how your company can capitalize:
Provide value
As consumers rein in their spending, they’ll look for alternatives to premium brands. If you can establish your brand as a solid value — if your product or service’s quality is strong and competitively priced — you can position your business for a short-term market-share gain and a long-term sales gain.
If it works, “then do whatever you can to build on that,” says Dominique Hanssens, professor of marketing at UCLA Anderson School of Management. “Lower your price point if needed, increase your quality or be more aggressive on the marketing side.” The reason, he says, is because when customers are satisfied with the quality of value-priced goods and services, they often stick with those brands and service providers even after the economy turns around.
Providing value also means showing your customers that you care. “There’s a tremendous value proposition in a down economy if you become known for taking care of customers,” says Marv Danielski, senior vice president for integrated brand development at Frank N. Magid Associates, an audience research and strategic consultation firm.
Experiment
You can use a down economy as a chance to test your marketing efforts and tweak your operation. For example, if you can debut a new software-based customer service function that improves customer satisfaction, you’ll be noticed.
“You see some companies doing innovative things that surprise customers, and those innovations make the customers appreciate you at a time when everybody else is complaining,” Hanssens says.
He also advocates being creative with your marketing budget if you do decide to make cuts. For instance, instead of scaling back all of your advertising by 30%, you might try running a full campaign in one region and none in another, then comparing the results. You’ll have learned how effective that message or medium is, and can use the results when times are better.
A side point on experimentation: It’s for you, not your customers. In tough times, they’re looking for consistency, for products and services they trust. Cutting quality, which will negatively affect the value proposition you offer them, is a no-no.
Don’t back down
Speaking of great values, here’s a deal that your business can use: Your marketing, dollar for dollar, will be much more effective during a recession than a boom.
“A lot of companies have this gut reaction to cut spending [in a recession],” Hanssens says. “If your competition’s messages are diminishing and you hold steady, the relative value of your marketing will go up.”
It’s particularly important to reach your existing customers, both because your value-based rivals may be bidding for them and because it’s easier to hold a customer’s attention than to gain the attention of a new one.
“You need to stay in front of these people,” Danielski says. “When they’re ready to make a purchase, you have to be in front of them. And you have to be in front of them with a value-conscious message.”
You can reach your customers in a down economy by delivering value and fostering trust. And you can build your business in the process.
Also In This Issue
- The Advantages of Collaboration
- Strategic partnerships can help small manufacturers and wholesalers improve internal operations and increase external sales opportunities.
- Networking Know-How
- Successful networking can lead to new business opportunities, but it doesn’t happen overnight. Here’s what to look for, what not to do and how to make business networking work for you.
- Could Your Company Run Without You?
- Create a solid contingency plan using these strategies.