In these recessionary times, business owners beat a retreat. SME owners look at cost savings, financial controls and expenditure. However if this is done in isolation, that is, if you rush to control costs without also looking at the top line, your bottom line will start to shrink anyway!
The other unquantifiable cost is, if you withdraw into a cost-saving shell, what happens to your business goodwill? How will you be seen by your customers? Is that affecting your brand? As you cut expenses, without looking after your market, perceived services may suffer. When the good times roll again – and they will – are you going to be ready to take on the competition again or will you be behind the 8 ball rebuilding your reputation and name-recognition?
Counter-intuitive as it is for SME owners in a period of financial slow-down, SMEs must continue marketing efforts. “Marketing” is not only “advertising” which is what SME owners think when they think of marketing. In fact, advertising may be your least effective marketing cost in a shrinking economy.
Effective marketing is the type of marketing that gets your name out there with its “brand” attached in the most cost-effective way. This can be added-value service, it can be increased contact with customers – this type of marketing can include less-cost or no-cost vehicles.
Direct marketing is not necessarily no-cost but a large part of the effort can be at low cost. It is an effective means of keeping your name open to customers, established and new, and it can be measurable.
There are four keys in a successful direct marketing campaign.
First is timing. When should you do it? You need to consider what exactly you want to market and then target the right time depending on your target market. For example if you were a financial planner with a loan brokerage arm, you can direct market at least three aspects of your business – refinancing client loans, reviewing longer term investment objectives to see if they are still relevant today, and reviewing insurances to cover spouses should the worst happen. All three can be timed now – your target market, worried about how they are dealing with their existing loans or if their retirement plans are still valid, would wake up if approached on these offerings. However you would not market your new loan services right now – keep them and time them for when the market turns and people look forward to borrowing again.
The second key is to phrase the offer well. Do you know what is the difference between your sales proposition and your offer? Again you need to examine your target market to see what offers appeal to them today. Project home builders need to offer value added services, especially to tap into government stimulus packages. Their sales propositions about “being the best” or “guaranteeing their work personally” are less important today. They can rephrase their offer to include items or services that people in a value-for-money frame of mind want today.
The third key is the look and feel of your direct mail. Should it be a mail-out? A letter box drop in a specific area? How about via a social networking website? Direct e-mail? Guess what – again, look at your target market. Then, you need to consider the format of the direct mail – it should be targeted at the people you are trying to reach, not a general advertisement format.
The final, fourth key to successful direct marketing campaigns is the database. How should you segment your market? How should you pitch offers and layouts at different markets. What are expected response rates, and what systems do you have in place to receive interest as well as follow up. I have been at the receiving end of a direct mail campaign which dealt with the first three keys really well, attracted me to the product. But then when I called to follow up, I was greeted by a receptioninst who had no idea what I was talking about! Talk about brand destruction.
So in summary – don’t sacrifice effective marketing to cost-cutting. Think about what you want to say, who you want to say it to, and get out there. As your competition cut costs, your opportunities beckon.