Posts Tagged ‘Recession’

As the Southern Nevada business community continues to feel the strains of a down economy, executives are faced with tough decisions concerning how to cut budgets. One item that is often cut is marketing. While these cuts may appear to have little impact and improve the firm’s bottom line, the inverse is actually true. In fact, cutting marketing budgets is a short-term fix that can have long-term implications on a company’s success.

According to a study by McGraw-Hill Research, companies that consistently advertise even during recessions perform better over the long-term. The study looked at 600 companies from 1980 to 1985. It found businesses that maintained or raised their level of advertising expenditures during the 1981 and 1982 recessions had significantly higher sales after the economy recovered. More specifically, companies that advertised aggressively during the recession had 256 percent higher sales revenue than those that discontinued advertising. A recent article on Forbes.com stated that companies that did not maintain a consistent presence during a past recession actually spent four to five times the amount it saved in marketing to regain its market status.

While budget cuts are necessary and it may be hard to justify large numbers allocated to marketing, it is important to remember that keeping the company’s name in front of customers is important. Public presence can lead to new business, and if you are not appearing, you are disappearing from the market – especially in the eyes of the consumer.

Instead of cutting budgets completely, executives should consider more cost-effective ways to reach audiences. The advertising and marketing industry has changed dramatically over the last five years. Companies are now using a mixture of marketing strategies to reach audiences including online marketing, grassroots outreach, co-branding opportunities and media relations.

One of the most cost-effective solutions is online marketing. With the emergence of digital media and social networks, it’s easier than ever to reach specific audiences directly. By using HTML e-mail campaigns, social media networks, online forums and blogs, and company Web sites, companies are able to post information instantly about new developments and correspond with customers in real time through the Internet. The cost associated with this communication medium is significantly lower than its predecessors, which often included fees to print and/or place collaterals piece or ads. One of the main benefits to online marketing is the ability to track the results through numerous online channels.

The Internet also allows companies the opportunity to participate in ongoing conversations about their industries. Over the last few years, the public relations sector of marketing has expanded to include online blogs and citizen journalists in addition to traditional media outlets. In many instances, companies can secure coverage for a news release or trend story ideas more quickly and with greater control of the initial content.

While it is important to explore new outlets for communicating to your audiences, an economic downturn can provide many opportunities to get more exposure in traditional outlets for less money. Publications are increasingly willing to negotiate on rates for placement advertising than they had been in recent years. Many publications are willing to give companies special pricing on long buys and offer deeply discounted prices on open space once the publication is laid out. Publishers would much rather fill the space at a discount than run the risk of leaving it empty.

In addition to price, companies who remain in the media strengthen their voice. With so many companies cutting budgets and pulling back their marketing efforts, those who remain enjoy more exposure. This is true both in print ad placement as well as media relations activities. With fewer and fewer ads appearing in publications, companies are going from one of many to one of few. Continuing to advertise gives them the opportunity to stand out.

Ad placement is not the only way companies are currently saving money. Printers, promotional vendors, graphic designers and even agencies are adjusting pricing to compete in today’s market.

Marketing during a down economy can be a very strategic business decision for any company. The key is to use an integrated approach that combines a variety of different communications disciplines. Companies should use this time to examine the way they are reaching out to their audiences and adjust accordingly. Maintaining a consistent and effective conversation with customers, especially in times like these, will lead to long-term growth and success for any company.

Kassi Belz, APR,
Director of Client Services,
MassMedia Corporate Communications
http://www.massmediacc.com/

Author: Kassi Belz
Article Source: EzineArticles.com
Digital economy, mobile technology

If this has been your reaction during the 2009 budgeting process, you’re not alone. Most dental practices around the US have been feeling the effects of the recession in some form or another. New patient counts have slowed, production has dropped 10-20% or more, and patients seem much more hesitant to commit to care. It can leave a doctor feeling a little uncertain when trying to establish a marketing budget for 2009. Yet there has never been a more important time to market your practice.

When Demand is Down Your Marketing Efforts Should Go Up

It’s a natural reaction to want to cut marketing and advertising when money is tight, but long established research proves that businesses who continue to market in a recession come out stronger when the recession lifts. For one thing, the competition is thinking the same thing you are, and if they abandon their marketing efforts that means less competition for your message. For another, it takes time to build awareness of your brand and message. If you pull back on your marketing, you may dramatically impact the brand equity that you had established in the past.

If you’re ready to commit to the long term growth of your practice, you’re going to need a plan. Following are a few tips to help you determine the appropriate budget that will generate the maximum return for your investment:

Start With a Plan

When you’re going on a trip, you MapQuest the directions and print them out in advance, right? Otherwise, how would you know how to reach your final destination? Well, a written marketing plan is essentially the same thing. It’s a set of directions for how you’re going to reach your growth and marketing goals for the year.

If you are working with an agency, they should provide you with a detailed annual plan that includes a summary of your goals, a demographic and competitive analysis, a list of strategies to employ and an execution calendar. However, if you’re doing this on your own, you can probably get by with a slightly less elaborate version.

A DIY Guide to Developing Your Plan

o Meet with your team and determine your goals for the year. Make sure they are concrete and measurable. Four to five goals for the year is plenty.
o Review the marketing you have done in the past. Tie those strategies to results by charting how much production can be attributed to each new patient referral source. You want to see at least a 2:1 ROI unless the strategy is brand new. Anything less that 2:1, kill it.
o Brainstorm the strategies you think will help you accomplish your goals. Think of internal marketing and public relations as well as external advertising.
o Map out a month by month execution calendar on a spreadsheet. For each strategy, list the steps needed to make it happen and then plot the months when these things need to happen. Don’t forget things like web maintenance, SEO fees, yellow pages and other “day to day” expenses.
o Now put total estimated costs next to each strategy, and plot when those costs will hit throughout the year.
o Add another 5-10% of the total for unexpected opportunities that will arise.
o Add it all up in monthly subtotals at the bottom.

How Much Should I Spend?

If your practice is young and still in growth mode, plan to spend 7-10% of collections on marketing. If you’re happy with your quantity and quality of patients, 5% should keep you in maintenance mode. Obviously this all depends on what you are producing and where you live. Five percent of a $500,000 practice in New York City doesn’t spend the same as 5% of a $2,000,000 practice in a small rural area.

Track Your Results

A million dollar marketing budget is useless if you don’t know how well it is performing. Make absolutely sure that your front office team asks every new patient who calls how they found out about you, and note the referral source in your practice management software. If a caller does not schedule, it should also be tracked. At the end of each month, quarter and year, pull a summary report of the referral sources and the associated production of each. You can quickly determine ROI (production/cost of the marketing or referral source) and make adjustments to the plan throughout the year.

Be Patient

It’s unrealistic to expect growth in this economy. If you hold steady with 2008, consider yourself ahead of the game. Allow your strategies time to work, and continue to measure and monitor. With concrete information and a solid plan, you’ll not only pull through this crisis but be stronger on the other side. Set yourself up for success. As the recession lifts, you’ll have a strong pipeline of patients ready to commit to large cases and your practice will grow!

Xaa Winans is the owner and president of Golden Proportions Marketing (GPM), a thriving company that specializes in comprehensive, custom marketing and advertising strategies for the dental and medical fields. The GPM website can be found at http://www.goldenproportions.com and Xana can be reached at 866-590-4476 or xwinans@goldenproportions.com.

Author: Xana Winans
Article Source: EzineArticles.com
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How one writes a business plan in recessionary economy works differently. One needs to approach the business plan from a different perspective. And one must make special efforts to avoid errors that in a good economy one would conveniently get away with.

Fortunately, one can do several simple things to write a better, more realistic business plan in a recession:

Recession Business Planning Idea #1: De-grandiose-ize the Plan

In a frothy economy, one can find it easy to get over-excited about an opportunity or venture. And, in a sense, that’s may be good. Excitement, optimism and confidence can be contagious. If the entrepreneur or management team displays, say, excitement and confidence, those feelings can infect – in a good way – the perception of customers, vendors, investors, lenders, and employees.

In recession, however, probably one wants to be more cautious for a couple of reasons: First of all, in a sputtering or shrinking economy, one will have more trouble selling. Period. Customers and clients spend less on everything. And this “less cash for purchases” will particularly affect non-essential purchasing.

A second factor relates to the “less money for everything” issue: With fewer dollars to spend, customers and clients will logically require more time for and exercise more caution about their purchases. In other words, even if some customer does choose ultimately to buy a product, the customer may take six months longer to make the decision.

Recession Business Planning Idea #2: Focus on Cash Operating Profits

In a recession, businesses need to focus their business planning on maximizing cash operating profits.

This admonition sounds, perhaps, a little too obvious. But to make the point here stand out: Many business plans focus too much on the liquidity event… the transaction that allows the entrepreneur to exit the business at some point in the future with a generous financial windfall.

For example, the business plan may focus on doing the things perceived necessary to get to an initial public offering. Or the business plan may optimize some element of the business that in the past, large companies have used to value the small companies they buy. Like top-line sales revenue or customer counts.

When the economy is healthy, dreaming about and planning for “liquidity event” issues may make sense. Focusing on the “liquidity event” issues when major public corporations need government bailouts to make it through the next week is dumb.

Recession Business Planning Idea #3: Strip Out Geometric Growth Rates

Commonly, in business plans, the people forecasting revenue, profits and cash flow use geometric growth rates. In a good economy, one can often get away with an assumption of geometric growth. Maybe. But geometric growth rates don’t make sense in a recession.

A geometric growth rate says that some value in the business plan grows by a specified percent. For example, the business plan might assume revenues will grow (almost automatically) by 5% a year. Or that inflation will trigger annual (dependable) price adjustments of 3% for the foreseeable future. Or that customer counts will grow (magically) by 10% a year.

Geometric growth rates create exponential growth – and implicitly assume that the business will just always get better and better.

Note: The subprime mortgage meltdown that triggered the current economic crisis stemmed in part from people using geometric growth rates. Investors, lenders and policy makers assumed that home prices would continue to almost automatically, dependably, magically increase…

The alternative to a geometric growth rate is an arithmetic growth rate. With arithmetic growth, you assume that a value grows by a specific value. For example, a retailer assumes that revenues grow by $500,000 each time a new retail location is added.

Arithmetic growth assumptions provide two benefits to the business planner. Arithmetic growth removes exponential growth from the business plan. Arithmetic growth forces the entrepreneur to explain the details of what drives growth.

Recession Business Planning Idea #4: Do Serious Scenario Planning

In a recession – particularly in a recession that looks to be as bad and deep as the current one – the business planning process needs to include serious scenario planning.

Scenario planning means redoing the business plan for some crazy, nearly unimaginable event. Like deflation. Or the collapse of an entire industry. Or commodities prices rising or falling to levels not seen in recent history.

Scenario planning delivers two benefits: Thinking the unthinkable should give the entrepreneur the opportunity to avoid some kinds of risks. And thinking the unthinkable – if the worst case occurs – should mean the entrepreneur can more quickly respond to a threat.

A final comment: Scenario planning should not look only at bad scenarios–though that bias may be easy in the current economy. Some of the surprises we see in the coming months will be unimaginably good.

Seattle CPA Stephen L. Nelson is the author of the MBA’s Guide to Microsoft Excel, a reference for business users of Microsoft Excel, the Write a Business Plan web site, and the Limited Liability Incorporation Explained web site.

Author: Stephen Nelson
Article Source: EzineArticles.com
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It seems to me that the UK is desperate to talk itself into recession. Newspapers know that bad news sells papers and so placards scream at us that profits are down, the credit crunch is here, High Street spending is down and so on. The more the media talks about it the more the public gets cold feet and we enter into a downward spiral. A classic example of how bad news is picked up by the public and so exaggerates the situation was a stunt pulled by former US talk show host, Johnny Carson. To illustrate just how easily we are talked into panic he announced on his show that there was going to be a shortage of toilet rolls. Within a couple of days supermarket shelves in the US were empty as people rushed out in a panic buying spree to ensure that they wouldn’t get caught short.

And here we are – doing it to ourselves as a nation. It’s incredible but it is unfortunately what we do in this country. I believe that we are naturally pessimistic – and guess what – that gets me down!

UK businesses start to look closely at their budgets and immediately assume that they can’t make money by increasing sales so they better start to make savings instead. By savings, I mean cuts.

Finance Directors start to operate on a basis of “safety first” at these times and will issue directives throughout the company for other directors and managers to suggest where savings can be made. The first area to be hit is quite often the budget which the finance directors find hardest to embrace – the advertising and marketing budget. The cuts will continue through training and customer services until eventually it comes down to staffing levels and “downsizing”, an expression from the late eighties has once again reared its ugly head – even though the man who invented the whole concept eventually admitted that he got the whole thing wrong.

This is not something that this article can change. It has always happened before, it will happen now and it will happen again. There is such a high degree of inevitability about it that you wouldn’t get odds at the bookies!

However, it is at times such as these, when the media and professional pessimists are determined to have their day that people in charge of steering the markets should try harder with whatever budgets they are left with. It becomes doubly important to make advertising and marketing efforts count for something and to make sure that sales messages hit home and work for the benefit of the company.

Even now, when times are supposedly getting harder, I am still inundated on a daily basis with the same instantly forgettable direct mail as I was when things were apparently booming. Whilst I agree that it is absolutely imperative to go out and get whatever business is out there but surely the way forward is to move towards better targeting and more persuasive direct mail. The emphasis must be changed from a system where sending loads of dross generates a trickle of business to one where a considered move towards better targeting and choosing interactive advertising and marketing pieces will generate improved response.

Having searched the internet for specific figures on typical response rates for direct mail I find that published figures vary from site to site but I can quote very specific examples from one particular company who supply interactive direct mail pieces. Here are snippets from its impressive list of testimonials:-

“We found Whitney Woods really extremely responsive and easy to deal with. Whilst working on one of our largest client accounts we were required to manage a direct mail campaign. Our client was so pleased with the success they sent the following feedback.”

“Thanks guys – just to let you know the feedback on the cube mailing is extremely good. We had anticipated a 1% response on customers signing up online. Our objective was to strive for 1.5 – 3 %, however, I think my faith in creative design is restored as we have current figures showing a 9.6% uptake on the offer with new accounts opened and being used on a regular basis.”

Gemma Garrad, Account Manager, Be Creative, Brighton

“The pop-up box produced by Whitney Woods is indeed a surprise. It has that certain factor that all companies strive for when trying to find the hook that keeps a name in someone’s memory. I know for a fact that customers old and new keep our boxes close at hand because of its uniqueness. Anything that stays on someone’s desk for longer than a day is indeed a marketing tool to be proud of.”

Andrew Bown-Copley, Director, Eagle Design Studio, Rotherham

“Pop up solutions are always well received and generally produce a much higher response from the recipient than other marketing mailers”

David Antrobus, Managing Director, David Antrobus Marketing Ltd, Altrincham

“I found Whitney Woods staff professional, friendly and responsive and most importantly they delivered to a very tight deadline. Their Pop-up cube and Zippalope was used as the invitation to the launch of the new Ramada Ireland hotel group in Dublin and Belfast. The invitation worked very well and received a lot of positive feedback from the invitees. Ramada International for the US were so impressed with the invitations they demonstrated them at a European conference in Germany.”

Stephen Broad, Account Director, Anderson Spratt Group, Belfast

“We were absolutely delighted with the customer reaction to the Cinderella designed ‘Jumpinjax’. They fulfilled all of the criteria of an excellent direct marketing tool – attention-grabbing and a fun way of conveying a very clear selling message that wouldn’t just simply end up in the bin. It’s major appeal was that we were confident that recipients would show the item to friends or work colleagues which immediately multiplied the number of people seeing the information about our show. The Box Office went crazy after the mailing and it increased our sales by 20% on the previous year.”

Tracey Shaw, Head of Sales & Marketing, Theatre Royal, Brighton

These are only a handful of examples but I think that they illustrate perfectly just how important it is in today’s economic climate that your advertising and marketing budget is made to work at its most successful level and for direct mail campaigns I believe that dimensional, interactive marketing is the way forward. Whitney Woods as a supplier of a very large range of interactive marketing products and pop up mailers and is very well placed to help to achieve the improvements in response rates.

Whitney Woods is based in Rossendale, Lancashire and is a leading manufacturer of promotional pop ups and interactive mailers. The company also offers mailing services to B2B clients as well as providing hand finishing and specialist eyeletting services to the print industry. Visit http://www.popupmailers.co.uk

Article written by Helen Mihill.

Author: Helen Mihill
Article Source: EzineArticles.com
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