Cutting marketing during a down economy destroys marketing momentum, confuses and demoralizes your team, and delays your recovery when things turn around.

1. More about destroying momentum: Marketing is an essential cost of doing business, and it’s expensive to start over. Marketing momentum is a beautiful thing. Leverage from successful marketing initiatives helps bring about new opportunities. Building marketing momentum takes strategy, planning, smart execution, analysis and constant revisions to achieve the best results, which takes time and money. Don’t make the mistake of thinking marketing can be turned off and on like a water spigot.

2. Confusing your team is a downward spiral: Many of us have been in the position of telling team members to stop working on a previously high priority project. We don’t have the budget we say; however, they remember last week during the staff meeting when we were irritated that they weren’t further along. That project may be tied to their performance review. It’s human nature to start looking for a cause for alarming changes, and concern about their job may creep in. Discussions with their peers around the topic of the financial health of the company are inevitable. Someone will mention they’re looking for another job. And on it goes. Abruptly halting ongoing projects and drastically reducing marketing initiatives will inevitably affect the morale of an organization.

3. Recovery is slow and expensive: Starting up marketing again is an uphill battle. The executive management will be anxious for fast results, but fast results will not be possible. Everything that was cut must be reevaluated in the current environment and renegotiated. Inevitably there is a loss of time as projects have to be picked up and dusted off, refreshed, and vendors engaged again. You may have changes in your team. Building marketing momentum again takes painful ramp up time, and delays getting the results you need now.

I recommend that you combine surgeon-like cuts in spending, and strategic adjustments to the timing of the roll-out of some initiatives, so that you suffer only a small decrease in your momentum. Pay very close attention to the fact that there is most certainly a cost of acquiring new customers and a cost of retaining existing customers. Your marketing leadership should be able to tell you what those costs are by each of your customer segments. Be realistic when you review the marketing budget. Can you hit your revenue numbers with what you are allocating to marketing?

Next, evaluate and modify where you spend your marketing budget to get the highest ROI while not dramatically affecting momentum. A good example of this is not completely cutting out PR, which is a long game and should be maintained, but can still be accomplished at reduced levels. Another strategic area to cut might be initiatives targeting secondary target markets. Keep things going strong in marketing to your primary target market.

Carefully manage your team to keep morale high. Times of tight budgets can actually engender an all-hands-on-deck mentality. You want a situation where everyone on the team is working to be more efficient with what you have so that you come out the other side of the down economy a winner.

We’re in a down economy as I write this. Make sure your marketing is strategic and efficient. To make sure you’re getting a solid ROI, analyze results and adjust tactics quickly. The natural reaction to a down economy is to cut expenses, but marketing is not a simple expense like office supplies or lunches out. Marketing is critical to the success of every enterprise. In the end, your best day is when you come out of a down economy ahead of your competition, with increased market share and potential, because they cut their marketing too deeply, leaving them to start all over again while you sail right on.

By: Melody Appleton

Part 3 of the Series: Developing a Marketing Plan for Your Small Business

Budgeting is an important part of marketing planning. If you have a set budget, you’ll want to develop and measure the results of your marketing mix with the budget clearly in mind. If you don’t have a marketing budget, you’ll want to start by putting pen to paper on what you think you have to do to market your products or services and get sales.

Start with a list of what you think you need and the costs to do those things consistently and well. Remember the old adage, “If something is worth doing it’s worth doing right”? I can’t think of a better application than to marketing!
Example: If you’re going to do newspaper advertising, do it consistently long enough to find out whether it’s effective for you. The length may vary from a three months to half a year or more. Pay to have your ads professionally designed and plan a special promotion that you can drop into your ads to give prospects a sense of urgency to take action.

Continue to add marketing tactics that you think might work and their costs.  Your preliminary plan might look like this:

Marketing Mix

Newspaper – 2 times/month for 4 months, cost = (advertising only, do not include artwork)

Co-Op advertising with partner/manufacturer – monthly for 12 months, cost =

Radio in x, y, z markets – morning drive time; daily for 6 weeks

Market x cost =

Market y cost =

Market z cost =

Email Specials – monthly 12 times, cost =

Email Newsletter – 4 times/year, cost =

Cost of Acquisition

Now determine the number of sales you need to get to consider your marketing successful. Be specific and realistic. Doubling your business is probably not realistic, and it doesn’t give a specific result for the individual tactics. How many new customers do you need to get from each tactic to make it worth the cost? The formulas you want to use are:

(Total cost)   (Number of leads)  Cost per Lead

(Total cost)   (Number of Sales)  CPA (Cost per Acquisition)

It’s important to calculate the number of leads as well as sales. This will tell you your “close rate”, which may differ from different marketing initiatives. It also provides insight into another important area in your business that you can also work to optimize.

Next, evaluate whether the cost of acquisition (CPA) is acceptable to you and individual tactics fit in your marketing mix going forward. If you are selling a product that brings you $1,000 a month in recurring revenue, you will likely be all right with spending $600 to get a new customer. But, if you’re selling something that is a one-time purchase, or doesn’t bring in as much revenue, you will need to adjust your acceptable CPA.

Return on Investment (ROI)

Ultimately, you will average the results from the individual tactics in your marketing mix to evaluate whether you’re getting the return on your investment that you need and whether you are hitting your acceptable CPA objective. By analyzing cost of acquisition as an average, you will be able to keep a tactic that may be a little more costly, but where you’re getting other benefits such as credibility or awareness.

Having an established CPA allows you to have a realistic marketing budget and plan your marketing mix accordingly. If I spend $x, I will get y results. If my budget is much lower than x or my sales goals are much higher than y, I can see before spending any money that I have to adjust something. If nothing else it tells me that I need to alert management that the budget or expectations may not be realistic, and you will need to test different marketing tactics to find the right mix.

Read Part 1: Brand, Positioning and Messaging

Read Part 2: Guerilla Marketing: Cost Effective and Powerful

By: Melody Appleton

Part 2 of the Series: Developing a Marketing Plan for Your Small Business

Guerilla Marketing is the countless free or very inexpensive tactics you can deploy do to build awareness for your brand and generate new business. Guerilla Marketing takes creativity, persistence, and work to make things happen with very little investment.

A key strategy in Guerilla Marketing is to know your customer. Define your ideal customer and all of the offline and online places you can reach them. Create a tracking document and prioritize every marketing opportunity by how many of your target customers it will reach.

Here are three Guerilla Marketing tactics you can implement fast and inexpensively:

1.    Develop two important programs – a Customer Loyalty Program and a Referral Program. These are your most inexpensive sources of new business.

The key is to stay top-of-mind and take advantage of the almost universal human trait of wanting to be helpful. When a friend or co-worker of one of your customers says, “I want to remodel my bathroom” or “I need to help executing a partner program” in the B2B world, you want your customer to recommend you.

Put definition and resources around these programs so that all employees will be involved in making them successful. Build in accountability: who is responsible, how will you track the results, and how often will you review? Elements of these two programs might include:

•    Sending a regular quarterly email with tips and how-to articles to your customers. This helps your customer view you as an expert resource and helps you stay top-of-mind – and it’s virtually free. Not only that, email is easy to forward to a friend! Make it simple for others to refer you.
•    Give customers a special coupon worth a discount for referring new business. Consider providing a discount for the referral as well. In B2B, you can provide small bounty or affiliate payments for new business.
•    Mind your manners. It is always appropriate to send a thank you note or call or email when someone refers you new business.

2.    Review all of your marketing communications and update them to reinforce your brand, your products/services, and your value proposition. Never miss a chance to reinforce your brand. For example:

•    Add a descriptive signature to all company emails – include your website and your tagline, even a customer testimonial. You never know when new business will walk in your door from an email that’s been forwarded. Think of every email that your company sends as a marketing opportunity.
•    The next time you print business cards, consider creating a two-sided card. Keep your contact information and company logo on one side, and use the other side for a list of your services.
•    Step outside of your own business and review: Your signage, your website, etc. Then step inside. If you have a bricks and mortar location, what’s the ambiance like? Does it reflect the customer you want to attract?  If not, update it. If you have an online business, realize that an outdated website does the opposite of reflecting a current, growing business. The old adage “A first impression is the most important impression” is still true.

3.    Develop partnerships with other businesses that have products or services that complement yours and co-market for one another. Don’t be afraid to say no to those that aren’t related. You’ll want to spend your precious time on those that are likely to become a source of new business for you.

If you’re working with a marketing consultant and they aren’t identifying and recommending these types of tactics, consider finding another marketing consultant!

Hopefully these examples will help you generate your own ideas. Write them down and make them happen, and you could just get that elusive and valuable competitive advantage!

Read Part 1: Brand, Positioning and Messaging

By: Melody Appleton

If you’ve ever been confused about branding your small business, here’s a simple way to think about it:

Branding Is Your Business’s Fashion Statement.

Here’s how branding is like fashion:

When you’re picking out a fashionable outfit for a night out on the town, there are several angles to consider, like:

1. Your fashion style. Do you consider yourself a sporty dresser, vintage, a bohemian, urban, or a little bit rock and roll? A trendsetter or more classic style? Your central fashion theme figures into your wardrobe.

2. Your personal taste and comfort. Dressing in a style that you like and wearing clothes that you resonate with and that make you feel fabulous.

3. The people you’ll be hanging out with. You want to make sure you’re not under-dressed for the company you’re keeping.

4. Your outfit’s effect on that special someone. If you’re dressing to impress, then you’ll think about who you want to impress and what they like.

5. The climate. You want to pick the right outfit for the weather, so you’re not too hot or too cold.

6. The current “ins” and “outs”. You want to look appropriate for the season’s trends — like you’re keeping up with the times instead of stuck in the past.

7. Matching the pieces of your outfit to one another. You want to make sure your outfit goes together — from head to toe — and that your look is consistent.

You have to watch for all 7 of these angles in your brand as well, by making sure that your brand:

1. Has a strong style and central theme. Your brand has a central theme that’s a lot like a fashion style — your BrandStyle. Once you know this central theme and core message of your brand, you’ll be able to easily style all of your materials to that style to make a clearer statement that’s instantly recognizable.

2. Looks like you, is an accurate reflection of who you really are and makes you feel fabulous. As your vision and mission changes, the appropriateness of your brand may also change. And, you want to make sure that your brand is an accurate reflection of your personality as well.

3. Looks appropriate among your competition. You can certainly make sure that your brand looks better than the competition’s, but you don’t ever want to have the frumpiest brand in your field. Your brand is one of the ways that your customers will compare you against your competition, and you want to make sure that it helps you come out on top.

4. Attracts your ideal clients and inspires them to hire you to work with them on perfect projects. The way to do this is to design your materials with your message and your clients’ visual tastes in mind — so they will be able to instantly see how amazing you really are. This makes you unforgettable and irresistible.

5. Is appropriate for the climate. You don’t have to design your brand to go with the weather, but there are other climate considerations: the social climate and economical climate can influence a brand. Make sure your brand’s message and design keep up with changes in these areas.

6. Keeps current with the trends. This doesn’t mean that your brand should be trendy, but it should look modern and updated. This means revisiting your brand once a year with a designer to evaluate how it looks in regards to graphic trends and trends in your industry.

7. Maintains consistency of message and of design throughout all of your materials. This doesn’t mean that every piece has to look exactly the same — that can become repetitive and dull. But it does mean that your materials should all appear to go together and should build on one another to increase their effectiveness.

If you think about your brand as your business’s fashion statement, then it becomes fun again!

By: Erin Ferree

Can you believe that summer’s almost over? Get that last bit of sun in while you can!

For many consultants, that means getting “back to business” with the busy fall season. As consultants get busier, they often neglect their own marketing—which can result in business dying down after the prime rush season is over. And it’s no fun to spend time rekindling your business after a slowdown (and not having positive cash flow in the meantime)!

If you have a marketing strategy put in place to keep you marketing through busy times, you may not have to experience these ups and downs.

Take some time before your business ramps up again to sit down and make a marketing plan for your busy season. It doesn’t have to be a long or time-consuming process if you focus on this task and just get it completed. And, it doesn’t have to be a long manifesto—even a short, bulleted list that says what you’ll do to get the word out about your business each month is better than winging it each month.

If you have a bit of extra time on your hands now (perhaps because your clients have gone on vacations) then you could take a bit of time to execute some of the items in your plan—for example, writing a couple of articles for your newsletter, prescheduling some blog posts, reviewing and updating your website, or making a few phone calls. Then you’ll have materials “in the bank” and ready for a less stressful fall.

By: Erin Ferree

Our family just became one of the millions of U.S. households that have gone Wiiiiiiii…!  That’s Nintendo Wii…we got one…and all three of us are hooked!

Since I have never been hooked by video games, I pondered what was different about this console.  Nintendo has figured out a way to grab a part of the market that wasn’t spending $$ for consoles/games: Boomer Families.  Ingenious!

By focusing on making fitness fun and providing an experience that seems very customized (and also allows for good healthy competition), they appeal to people like me who need a workout buddy, a coach…in the comfort of my own home.  Ingenious!

And they have created experiences that allow families with kids of all ages, or even couples without kids, to use technology to interact with one another instead of zoning out in front of their computers or TVs.  Ingenious!

According to Wedbush Morgan Securities analyst Michael Rachter, “over half of Wii households are nontraditional, meaning that they would not have bought a console but for the novelty of Wii.”

Not unlike their key competitors, Sony and Microsoft, Nintendo did the traditional ‘limited supply’ thing to work up frenzied demand when they launched their Wii for Christmas 2006…we are all used to that and still get sucked in by wanting our kids to have the coolest new thing. NOT so ingenious…

By going beyond that traditional ‘create demand’ marketing move, however, and actually offering a device that appealed to an entirely different market, Nintendo has been able to go from one of the lesser players in this $7B+ annual spending market for gaming hardware to being market leader, projected to sell 26 million units this fiscal year ending March 2010.

They were able to do this by finding a niche beyond what they were known for: kiddie games.  Hard core gamers dismissed Nintendo as not a serious alternative to the PS3 and XBox…but Nintendo didn’t sit in their comfort zone…they must have done some research and found a new market…with money…Boomers!  Ingenious!

The other thing they did was innovate their product by introducing an entirely different controller…a device that almost brings virtual reality into our homes…no more memorizing buttons to make things move around the screen…you move and your online ‘Mii’ moves…Ingenious!!

Their next marketing move looks to be reducing the price of their consoles by $50 to $199.99 for Christmas this year…watch for that…PS3 (drowning behind the Wii and Xbox currently) will try to regain its place in the market by cutting prices also…

If you haven’t checked out how the Wii could transform YOUR household into a place where people play games together vs. sequestered in separate rooms…think about it…I’m a convert!  I still chuckle at the pride my 15 yr old son had in helping me set up my Mii profile (customizing my hair and facial features and all!) and then seeing how good my balance and posture were compared to his, based on the original fitness tests the Wii administers to establish your baseline ‘fitness age’ and BMI…we were INTERACTING!

More important than all of those revenue and unit sales figures, Wii may have figured out a way for technology to bring families together vs. isolate them…Ingenious!

By: Jen Berkley Jackson

Join me at Keypoint Credit Union in Santa Clara on Wednesday evening Februrary 25th from 6 – 8pm for a free seminar about how nonprofits can use marketing to promote and grow their organizations.

In this tight economy, all the concerns of nonprofits — recruiting volunteers, fundraising, building awareness and delivering programs to key constituents — become just that much more complicated.

We’ll be sharing proven marketing and branidng techniques that can be applied to any nonprofit — big or small.

This seminar is being held in conjunction with the American Enterprise class project at Homestead High School in Cupertino, CA.

There’s no charge, but reservations are required. More information.

By: Linda Popky

As you can tell from the series of posts that I’m making today, I was a bit behind on my reading. But many of these articles were definitely worth my time, like this one on the Silicon Valley WebGuild that shows a survey from the Association of National Advertisers’ (ANA) 2008 annual “Masters of Marketing” conference (October 2008).

The survey polled attendees via handheld devices about their marketing mix, budgets, plans, and tactics.

One of the questions asked attendees how much they plan to spend on marketing in 2009 vs. 2008: 20 percent expect to increase spending, 28% expect to hold stable, and 20% to decrease spending. I thought this bright news for marketing consultants given all the fear surrounding the current economy.

Read Full Article on Silicon Valley WebGuild

How will you adjust your current marketing and media plans to account for the recent downturn in the financial markets?
- Spending will be reduced (33%)
- Spending will be constant / marketing mix will be reallocated (33%)
- Surprisingly, we will spend more (27%)
- No changes, we will keep everything status quo (8%)

How does your CEO view your marketing efforts with respect to growth?
- As a brand-building investment (56%)
- As an unaccountable but necessary expense (21%)
- Not sure (15%)
- As an unnecessary expense (8%)

What is your preferred social media site for driving brand growth?
- None (32%)
- YouTube (20%)
- Facebook (18%)
- All (12%)
- LinkedIn (10%)
- MySpace (6%)
- Twitter (3%)

As you look toward 2009, how much do you plan to spend on marketing vs. 2008?
- Increase spending more than 10% (26%)
- Increase spending less than 10% (13%)
- Hold stable (28%)
- Decrease spending less than 10% (14%)
- Decrease spending more than 10% (19%)

Which discipline will offer your brand the largest opportunity for growth?
- Traditional 30-second spots (17%)
- One page advertisements in a newspaper/magazine (7%)
- Web advertising (16%)
- Social media integration (28%)
- Direct Marketing (7%)
- Grassroots, viral public relations (19%)
- Radio (5%)

How does your company currently measure brand growth?
- Sales and net income (70%)
- Third party brand equity valuations (15%)
- Shareholder value (9%)
- Household penetration (4%)
- Company culture (3%

By: Avery Horzewski

There was an interesting little article on Webguild that looked at the role of social media in an economic downturn.

Social Media in the Economic Downturn

By Reshma Kumar, November 2, 2008

“Social Media, in light if our current depressed economic climate was a topic of discussion and on the minds of many in attendance at the Social Media Strategies Conference last week. Paraphrasing roughly Keynote, David Carter of Awareness’ take on this, he noted that with the current economic situation, there are more eyes on where the money goes. Therefore, social media strategies have to be spot on the first time around. So, how can we execute better? Identify and leverage on points of enthusiasm (e.g. press releases, conferences, events, etc.) and make them a part of your community. Identify watering holes for customers and pick the project that has the most obvious ROI. It doesn’t have to be about money, it can be about trust scores, community stocks, and to gather the required information needed to measure and analyze this event.

“Shel Israel, Social Media Strategist of Global Neighbourhoods, had this to say: What can we scale back and cut back on in the downturn? We really need to talk to our customers. Traditional advertising and PR have remained expensive in the last decade or so. Social Media is an answer to the problem of lean marketing and addressing the problem of how to stay close to the customers. Mark Yolton, SVP, Community Network of SAP said social media is being used at SAP for about 5 years now. It’s core to what SAP does today. Given today’s economy, there is a need to focus on cost efficiency. Reducing cost, agility, and reaching out to customers are the focus points of community network at SAP.

“What do you have to cut that you now can’t live without? According to Mark, as budgets get cut, be it training budget, marketing budget, traveling budget, etc., social media is the thing to turn to — the same way PR is being done by providing daily news summaries which includes blogger comments. There are serious discussions going on on blogs and inviting bloggers to product launches, company events, etc. is the thing to do — giving them the privilege because they’re the ones who are asking the best questions.

http://www.webguild.org/2008/11/social-media-in-the-economic-downturn.php

By: Avery Horzewski