Don't skimp On Marketing When Sales Decline
For many business executives in companies large and small, the art of effective marketing is a mystery.
When their revenues take a downturn, marketing is the first thing they cut. Although this cutback will reduce expenses, it will also reduce subsequent sales.
In spite of this fact, more than 80 percent of American companies budget their marketing expenditures as a percentage of expected revenues. On the surface, this may seem to be a logical, bean-counter approach. However, in an economic downturn, these companies cannot easily recoup the sales lost from their reduced marketing efforts. Only businesses with sufficient cash reserves to ride out the deficit are able to recover from such a misplaced strategy.
A superior marketing campaign should capture the attention of your target consumers, making it easy for them to secure the necessary information to make an informed decision. Unfortunately, most marketing campaigns do not accomplish this goal.
Your marketing strategy determines how potential customers perceive your business. Are you distinguishing your business by addressing consumer needs, wants and desires? Or, are you merely telling customers what you have? Consumers don't want to purchase "things;" they want to address their needs and solve their problems. (Example: Customers don't want a quarter-inch drill; they want quarter-inch holes.) Yet most ads focus on "things" and platitudes.
Because many marketing claims consist of platitudes, it is important to understand what a platitude is. Webster defines a platitude as a trite statement with a lack of originality but expressed as if it were original or significant. Typical platitudes in marketing campaigns include phrases such as: lowest prices, highest quality, largest selection, most reliable, exceptional service. Businesses often use such phrases even when not true. As a result, wary consumers are barraged by these words so frequently the claims become meaningless.
I refer to these platitudes as UAs (or Unsubstantiated Assertions). Any business can claim to have a UA. What you should do is focus your company's campaign on SAs (or Substantiated Assertions). SAs make you appear credible by backing up every marketing claim you make with proof acceptable to your customers.
Use commercially available market data, statistical results and customer testimonials to back up your claims. The Acme automotive dealership proclaiming it has the lowest prices is a UA, while a satisfied customer stating he visited several dealerships and received the lowest price from Acme is an SA.
If you claim your business has the largest selection, make this assertion into an SA by comparing your available selections with those of other area businesses.
If you claim your business has the most reliable products, turn this declaration into an SA by offering a warranty that is twice as long as the competition.
Some of the most effective marketing advertisements have a clear "attention getter" followed by a free offer for more information. For example, suppose you sold alarm systems. An effective ad might be a photo of a loaded revolver pointing right at the reader with a headline "How to Scare off Trouble Before It Stares You in the Face." Then offer a free brochure on "Tips to Keep Your Home and Business Burglarproof."
If your business depends on call-in trade, consider offering a free report or comparison guide to consumers. To be effective, these reports or guides should focus on addressing consumer wants, needs and issues, rather than on physical products. For example, if you sell telescopes, offer a report on "How to Select the Best Telescope for Your Family Without Breaking the Bank." If you have a catering business, you might offer a guide on "Questions to Ask Your Caterer to Ensure You Receive the Best Value." If you have an automotive dealership, offer a flyer on "Ten Points to Consider to Guarantee You Receive the Optimum Price for Your Trade-In."
Don't waste your precious budget on ineffective marketing.
Determine which media ads (radio, TV, newspaper, magazine, billboard, etc.) are the most effective for your business.
First, query new customers on where they learned about your product. When you have gleaned this information during the period of a particular media marketing campaign, divide the cost of that media by the number of new customers from that media blitz to determine your marketing cost per new customer. Then concentrate on the media, timing and marketing approach that yields the lowest cost per new customer.
Marketing is key to the continued growth and vitality of your business. Don't just throw your marketing dollars at the wall, hoping some will stick. Ensure that each marketing dollar you spend produces the maximum result for your bottom line.