For this post, I’m going to take a break from my usual topics for a bit, and discuss a few of the things currently happening in the US economy, and how this might affect you and your business plans or marketing initiatives in the future.
Let me start by saying that I pay attention to the news. Quite a bit, actually. I find that being current not only on business or technological issues - or the industries of my clients - but also the general state of affairs throughout the US and the world, gives me lots of ideas and inspiration for my own writing.
And when you see the current news about our economy, it’s easy to become confused. Is the economy getting better? Standing still? Continuing to decline? I guess it depends on who you ask. Hey, the stock market is doing great! And lots of folks see that as a sign that our economy is on healthy footing. Someone on CNBC today was even touting “Dow 12,000” by the end of this year! Can you imagine that?
After all we have been through - starting with the Lehman Brothers collapse, the sub-prime mortgage crisis and ensuing credit crunch, and then government takeovers and massive bailouts. Then throw in record unemployment, a weakening dollar, lots of government borrowing, and record bank closures. You get the idea.
Yes, we have been saved from the brink. But things still hardly qualify as “normal” these days. And we are now talking about Dow 12,000?
Now, one of the reasons why all equities are rising is due to the printing presses at the Fed, and a 0% lending rate. Money is basically free right now, if you're a big Wall Street bank that is. So they are taking our taxpayer money, and instead of lending it back to us, they are back in the bubble or “casino” economy mode, and speculating like mad all over again. But I use this explanation as a simple way to make my point, it's impossible to know what's "real" and what isn't in the financial world right now, and when the economy will be truly healthy again.
But it has become crystal clear that some of the challenges that we are currently facing WILL be here for a while. Unemployment is over 10%, and if you count those that are under-employed, or have given up looking entirely, the numbers are significantly higher. And most economists agree that there is a high likelihood that these elevated unemployment numbers will be here for some time, at least the next couple of years, as we struggle to provide new industries, education and training to those that have lost their jobs in the last 18 months. Many are calling our current unemployment situation the “new normal.”
So, beyond a gory retelling of our current economic woes, you are probably asking what does this all mean?
Well, for people that do what I do – assist companies to market their products and services – it can be a scary time. Sales numbers and revenues are down, and organizations are (rightly) looking for any inefficiencies or marginal initiatives or programs to cut. Marketing always seems to be on the top of the list. Now, I have always found this to be very counter-intuitive! “Well, sales and profits are down! What are we going to do? I know, let’s slash our marketing budget! One of the few things that can actually help INCREASE our potential sales!"
And I know why it happens too. Of course, you simply can’t cut Accounting, because no matter how much (or little) you sell, you need to transfer funds and pay taxes and payroll and suppliers, etc. And you can’t cut out your IT department, because without a running computer network or website or processing system you can’t function. And you can’t cut your service providers or line workers or whoever in the organization actually does the “real” work, right? And the list goes on.
But the marketing department? You can cut here, and it won’t be missed. Right??
Well, not for a little while at least. It is a department that isn’t completely essential for business, for TODAY at least. The doors won’t close, or the production line won’t grind to a halt, or the trucks won't stop rolling if marketing shuts down.
At least not yet. And that is why it is often on the chopping block first. Now, I think with a little bit of forethought, it isn’t that difficult to see why this is a very poor long term strategy. But this doesn’t stop short-sighted companies from doing it. But as I mentioned earlier, there is a major problem with this strategy this time around. Because although the economy is surely improving right now, we still have a long way to go to “economic health” and substantial growth. The “new normal” will be with us for some time. Will we be healthy again in 2011? 2012? Later than that??
In other words, if this is your "strategy," you may not be marketing or promoting your company for a LONG time! And it's easy to see why this is a losing strategy. And there will certainly be big financial winners - and big losers - this time around, as there always are. So the question is, "How can I be one of those big economic winners?" And as you may guess, the answer is rarely, if ever, "By slashing all marketing promotion of your brands, products and services!"
Actually, I find it fascinating that many economists and entrepreneurs believe that a recession is the BEST time to start a business. Once again, the reasons become clear when you consider that the companies that don’t make it through - that close their doors forever - just gave up X% of the market share within their industry or field.
Not only are all those potential customers or clients now up for grabs, but recessions cause many changes in buying behavior, regardless if many companies leave the marketplace or not. Tight economic times cause customers to re-evaluate the costs, and true value, of the many products and services they are currently buying. During tough economic times, there are usually far more requests for price quotes, directed at a larger pool of suppliers or providers, as businesses seek out different alternatives and value.
Of course individual consumers do these same things. They consider brands, products and stores that they haven't before. They shift dollars at a faster rate and at a larger magnitude than they do even during "roaring" economic times. This presents tremendous opportunity, for those who are bold and innovative enough to see this perhaps once-in-a-lifetime chance to greatly expand their market share and build their brands.
Which is why slashing your marketing budget during these times is such a poor long-term decision. Now I know that there are some companies that have no choice. They either immediately cut major portions of their budget or face insolvency instead. For these companies, I certainly wish you luck! But for anyone else, now is the time to be aggressive in your pursuit of market share within your industry, field or product category.
And the best part? You can promote your brand, your products and services FAR more efficiently now than ever before. Online marketing and communication initiatives typically cost much less than the "traditional" methods that many companies have used in the past.
Email marketing programs and e-Newsletters are a very cost-effective way to stay in touch with your customers or clients, prospects, donors, volunteers, etc. It's an easy way to stay “top of mind” with your target audience and continue to build brand awareness and presence, at a time when your competitors may have their “eyes off the prize” themselves.
Blogging about your company, your products or your services is another great way to inexpensively reach potentially huge numbers of potential customers, and introduce them to your business and what you do.
Enough has been written about social networks, such as Facebook and Twitter, in recent months that I don’t feel the need to repeat all the stats again in this article. But suffice it to say that these initiatives can have a big influence on your brand equity and resulting sales numbers for the same relatively inexpensive cost.
Which is something that most companies love to talk about during ANY economy, the all-important Return On Investment. And if there was ever a time to generate great ROI with your marketing dollars, it's now!
The bottom line is that even during these tough economic times, if you feel your business has a future, NOW is the time to discover the many ways you can still aggressively (and efficiently) market your services or products with the many E-marketing communication methods that have been established or are currently emerging.
Thanks,
Jim Haynes – President, Hat Trick Associates
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