Don’t Abandon Marketing in a Recession

For many businesses this may be a challenging year but beware of cutting too much from your marketing budget without careful thought.

“Yes, you may need to stop some advertising and non-essential marketing,” says Christopher Lamotte at Real Marketing Specialists. “However, analysis from recessions in 1992, 2002 and 2008 shows that companies who continue to invest wisely in their marking during tough times are more likely to survive, win market share, build their brands and grow their profits – particularly when the economy recovers.”

As Warren Buffett said: “Be Fearful When Others Are Greedy and Greedy When Others Are Fearful.”

I’ve been doing digital marketing for 25 years, since the midst of the ‘dotcom boom’, and working in strategic marketing and management consultancy across most channels for even longer. My clients have included more than 250 SMEs from a diverse range of sectors. So, I wanted to share some marketing advice.

Here are 10 possible ways to win at marketing in more challenging times:

1. Sell More to Current Customers and Ring-Fence Your Best Customers

This one seems obvious: many of us don’t focus enough on selling more to our existing customers.

You’ve probably heard that acquiring a new customer can cost five times more than retaining an existing customer. In fact, some research suggests it is more than 30 times easier to sell to existing customers than acquire new customers.

One of the key aims of marketing is to win life-time customers that provide repeat business and recurring revenues. A lot of your profits come from their repeat business.

In fact, increasing customer retention by 5% can raise profits by well over 25%. so focus more on customer retention.

Take this further by identifying your most profitable customers then ring-fence and nurture them: carefully analyse your sales and profits per customer over the last 1 to 3 years. You’ll discover that 20% of your customers bring in 80% of your profits. You’ve now found your best customers.

You may have spotted that we’re applying the 80 / 20 Rule, also known as the Pareto Principle. It holds true for many different areas:

  • 80% of a company’s profits come from 20% of its customers.
  • 80% of a company’s complaints come from 20% of its customers.
  • 80% of road traffic accidents are caused by 20% of drivers.

So, build a deep relationship with the 20% of your customers who bring in 80% of your profits. Look after them well. Thank them and reward them for their business. You could introduce a loyalty programme for these important clients, and launch premium products just for these key clients. Make them feel really valued.

2. Focus on ‘The Three Ways You Can Grow Your Business’

In essence, there are three ways to grow your business:

  1. Increase the number of customers you have.
  2. Increase their average spend: increase your prices; get your clients to buy more from you.
  3. Increase the number of times your clients buy from you. Often the first sale you make is not profitable but it provides the opportunity to build your relationship with your new customer then make a more profitable second sale, a third sale….

If you increase each of these three levers by 10%, you’ll achieve a 30% increase in sales.

But, if you increase the number of customers you have by 30%, their average spend by 20%, and the number of times your customers buy from you by 30%, you’ll increase your sales by 100% and double your sales!

3. Communicate a Convincing Sales Pitch with a Clear USP

Too many marketing messages are boring, copy-cat and ineffective. To stand out from the crowd, you need to craft compelling messages that grab the attention of your target market. Once you have their attention, your selling messages must make them take action.

Experienced marketers will tell you that getting your sales pitch right takes several attempts. This takes presenting, practice and rigorous reflection. So, review and rewrite your sales pitch.

“That’s why I regularly write sales pitches and value propositions for clients, based on research and a deep understanding of their customers,” says Christopher Lamotte.

Ensure that your sales pitch includes a clear ‘Unique Selling Proposition’ (USP), or ‘differential advantage’, that makes you stand out and differentiates you from your competitors.

Your USP should answer this question: ‘Why should I buy from you rather than your nearest competitor?’

Too many USPs do not capture what is unique about the business. They are bland, could be for any of your competitors’ businesses and do not capture what is genuinely unique about the business. Having ‘quality products’ or ‘great service’ aren’t enough to be your USP. These are basic, generic customer expectations. A good USP needs to attract prospects before they’ve made a purchasing decision.

What is unique about your business? Do some customer research or analyse your customer reviews in detail:

  • We don’t really buy insurance; we buy peace of mind.
  • We don’t buy perfume; we buy confidence and feeling good about ourselves.

What are your customers really buying? Ask yourself: “What pain points do my prospects have and how do I address them? What’s the key benefit my customers want? What are the best emotionally charged words that will capture the attention of my market?”

The uniqueness of your products may come from the way you package them up, particular features or benefits, what your brand stands for, or the support you provide. You need to position your products so that if your competitor was operating opposite you, customers would cross the road to do business with you instead.

So, get into your customer’s mind to discover what actual and emotional benefits they are really buying. Once you understand this, you can craft a powerful sales pitch that makes you stand out.

4. Double Your Website’s Conversion Rates and Halve Your Cost of Acquisition

Too few small businesses don’t put enough effort into improving their website’s conversion rates. So most websites have lots of room for improvement.

You’ve already invested in your marketing: your website, ecommerce, social media, Google & Facebook Ads, SEO, email marketing, video marketing, content marketing and PR.

All this marketing investment is already driving more traffic to your website. But, to maximise the return from your marketing, you need to convert as much of that traffic as possible into customers, or at least get these prospects to take the next step in your sales funnel.

To double your conversion rates, you just need to increase the conversion rate of 4 of your website’s pages by 19% because of the power of compounding.

If you can double your website’s conversion rate, you will halve your ‘cost of acquisition’ for each new customer.

What’s more, doubling your conversion rates can increase profits by far more, perhaps even four times, because many of your costs are fixed.

How do you increase your website’s conversion rates?

  • With a clear sales pitch with a USP;
  • With clear persuasive copy;
  • By instantly communicating trust on your home page (called the ‘8 second rule’);
  • By reducing perceived risk with a powerful, guarantee;
  • Through a believable, valued offer;
  • With effective calls to action like clickable phone numbers or free consultations;
  • And smooth, logical user experiences.

Improving conversion rates is often surprisingly inexpensive. See it as profit-multiplier!

5. Use Multi-Channel Marketing

Too many businesses only use 1 or 2 marketing channels or techniques effectively, often because they don’t really have a marketing strategy.

Think of how you could increase your leads by adding more channels and techniques, such as: website conversion rate optimisation: email marketing; professional SEO; Google Ads or Facebook Ads and remarketing; a YouTube channel; video testimonials and customer stories; content marketing with digital PR; a phone number; text messaging; or direct mail.

If you’d like to discuss your marketing challenges, contact me, Christopher Lamotte, for a free Website and Marketing Review on Zoom or in-person. See some of my video testimonials.

6. Harness the Power of Email Marketing

Email marketing went out of favour when GDPR came in. But, email marketing with a good list and well conceived email newsletters (and programmed emails) is still one of the most measurable ways of retaining and converting customers. Done well, email marketing can be cost effective and deliver higher returns (ROI) than most other digital marketing channels.

As Hubspot puts it: “Nowadays, marketers put a lot of emphasis on webinars, video campaigns, and other new opportunities to reach their customers. But your contemporary communication methods shouldn’t distract you from one of the oldest and yet most effective messaging channels — email.

“You might be wondering if email is still a worthwhile marketing strategy. Well, it is. In fact, email generates $42 for every $1 spent, which is an astounding 4,200% ROI, making it one of the most effective options available.”

When it comes to sales effectiveness, research demonstrates that email marketing done well is more focused and delivers much higher returns than social media marketing (perhaps at least 15 times higher! McKinsey has suggested that it can be 39 times higher than social media!). Read 12 Email Marketing Tips.

7. Graduate from Time-Wasting Chatter to ‘Social Media Marketing’

Social media gives us access to vast online communities and network-powered word-of-mouth.

Social media is all about conversations, sharing and engaging, but it must drive traffic to your website and be focused on achieving your marketing objectives. It allows you to have an on-going relationship with a wider audience, to share your business’s personality, and can be a fantastic source of referrals and testimonials.

The most appropriate social media channels vary from sector to sector and business to business, and you may well have your own preferences. So, which are the right channels for your business?

  • If you run a B2B business it may only be right for you to be on LinkedIn, Twitter and have a YouTube channel.
  • If you have a B2C business targeted at consumers, Instagram, Facebook and YouTube may be best. However, you have to boost posts and advertise to get Facebook, an ‘advertising agorithm’, and Instagram to really work. Twitter can be great for engaging with the media, but, beware, many small businesses struggle to make Twitter work. I’ve been known to advise clients to stop wasting their time on Twitter and focus on just 2 or 3 social media channels.

Your website news or blog could run as your content marketing hub, at the centre of your social media activity, providing content that can be cut-down and reposted in your social channels.

8. Have a Clear Marketing Strategy and Plan

Some small businesses don’t give enough time to marketing and keep pushing it down their to-do list. Research suggests that many SMEs spend less than one hour per month on marketing strategy and planning. So, their approach to marketing is often ad hoc and they waste their budget on unconnected marketing activities which lack clear direction or focus.

“Indeed, the problem is not that the owners of small businesses in this country don’t work; the problem is that they’re doing the wrong work. As a result, most of their businesses end up in chaos – unmanageable, unpredictable, and unrewarding.” (Michael Gerber, The E-Myth Revisited)

Just some of the key benefits of having a clear marketing strategy are that it…:

  • Helps your business stand out, beat key competitors and builds your brand.
  • Ensures you focus on your ideal customers and you really understand their needs.
  • Ensures you use the right marketing channels.
  • Allows marketing in one area reinforces another.
  • Means you don’t waste your marketing budget on heavily sold, ad hoc advertising ‘opportunities’.
  • Gives you clear priorities and ensures you spend enough time on your marketing.
  • Keeps your business on track through uncertainty and major challenges.

All small businesses should have a carefully considered marketing strategy and a practical working action plan based on research, analysis and creativity. Real Marketing has created clear, practical, easy-to-understand marketing strategies and plans for more than 220 companies over the last 21 years.

9. Excellent Execution is Essential. So, Who is Doing Your Marketing?!

Too often, good plans and campaigns are spoilt by poor execution:

  • Some businesses have a good plan but don’t spend enough time implementing it;
  • Or they execute their plan badly, in a hurry, only partially, without discipline and without any creative magic.

Marketing is increasingly complex and challenging to do well, and requires a wide range of skills. Some business owners and amateur marketers don’t know what they don’t know. As we say, ‘a little knowledge is a dangerous thing’. So, they can over-estimate their understanding of marketing. This is called the Dunning-Kruger effect:

“Dunning-Kruger effect, in psychology, a cognitive bias whereby people with limited knowledge or competence in a given intellectual or social domain greatly overestimate their own knowledge or competence in that domain relative to objective criteria or to the performance of their peers or of people in general.” (Britannica)

By far the biggest leverage point in any business is marketing. Imagine the multiplier effect on your growth and profits of getting twice as good at marketing? Most small businesses can get twice at good at marketing.

You need to invest in marketing. The difference between companies that thrive compared to those that struggle is how effectively they execute their marketing.

So, think very carefully about ‘Who’ should be implementing your marketing? That’s why I’m often retained as my client’s Virtual Marketing Manager, their cost-effective outsourced marketing department, to exectute the marketing strategy and action plan that I’ve worked with them to create.

10. Measure Your Marketing: Adopt a Marketing Investment Mindset

Do you use marketing metrics (key performance indicators (KPIs)) to measure your marketing?

You’d be surprised by how many small and medium sized businesses regularly spend more than £10,000 or more each year on marketing but do not know what they spent it on, because they don’t have a clear marketing budget.

You should have a few agreed marketing metrics that you check every quarter or, at least, every 6 months. These could include: how customers first heard of you; conversion rates; website analysis from Google Analytics; email and social media metrics; and sales and profits.

If you can only afford to spend a little on marketing, a tight budget is still a budget and spent well can still have a big impact on business growth and revenue.

But this doesn’t mean ‘marketing as cheaply as possible’. Cutting costs with poor quality sales literature, a home-designed website, not focusing on conversion rates, over-relying on social media, or poor sales processes, can damage your business and brand.

Measure your marketing metrics quarterly and move from having a ‘marketing cost mindset’ to a ‘marketing investment and growth mindset’.

If you’d like to discuss your marketing challenges, contact me, Christopher Lamotte, for a free Real Marketing Transformation call. See some of my video testimonials.

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