Posts Tagged ‘Recessions’

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

There is a widely accepted belief that “When times get tough the last thing a CEO wants to do is to slash his or her sales and marketing budgets.” After working as a Fortune company chief marketing officer and also as a consultant to dozens of Fortune 100s and hundreds of smaller companies (through two major recessions) I have come to conclude that this corporate old wives’ tale is a bunch of bunk.

When business times get tough (such as they are right now) CEOs and CFOs have to take a hard look at every one of their company’s business processes. They have to look at what each one of those processes costs. And then they have to take a hard look at what each one of those processes contributes to profits (or lack thereof). And, as they identify a process that costs more than it contributes to profits . . . they have to make some budget cuts. Sales and marketing budgets are no exception.

Of course, simply slashing budgets seldom saves a company. And it certainly does not prepare a foundation for restoring positive growth. Slashing budgets is a holding operation. It is an emergency step that may buy time while business process improvements that have potential to get the ship turned around can be made.

Taking a hard look at Sales and Marketing what many CFOs are confirming is that very few traditional Sales and Marketing processes are producing positive financial returns on the costs and expenses invested in them. As a result, CFOs are doing what they have to do. They are recommending slashing sales and marketing budgets.

In the face of budget cuts what most traditionally trained sales and marketing people are doing is continuing to do what they have traditionally done. But they are doing less of it. As a result, sales continue to decline and deteriorating financial situations continue to deteriorate.

What an increasing number of forward-looking CEOs are doing is stepping back to reassess their entire customer-facing business process (in which Sales and Marketing comprises only about one-third of the business process dots). They are redefining that process to include not only Sales and Marketing but also the functions that design and produce and deliver what their customers want. And, they are forming cross-functional sales and marketing business process improvement teams and they are providing them with the training and tools they need to connect the business process dots that Promise, Produce and Deliver what their customers want (and will pay for).

So, Mr. or Ms. CEO, slash your sales and marketing budgets if you must. But, by all means, move on to connect all of your business process dots that build customer bonds, increase sales and profits and build a foundation for quantum growth.

About Dr. Bob Roth and BPI for Sales (SM)

Dr. Bob Roth developed the BPI for Sales method for Making marketing make money(SM) through his work with several dozen Fortune 100 companies and also with several hundred smaller businesses.

Dr. Roth helps companies build cross-functional sales and marketing processes and energize cross-functional sales and marketing teams. He helps them connect their business process dots that Promise, Produce and Deliver what customers want (and will pay for).

For more information please visit [http://www.BPIforSales.com] or contact Dr. Bob Roth at DrBob@BPIforSales.com

Author: Robert Roth, Ph.D.
Article Source: EzineArticles.com
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