Speed Up Don’t Slow Down

7 02 2008

The news is full of gloom and doom about the economy on both sides of the Atlantic at the moment, and whilst the powers that be are doing their bit to try and keep us from heading to a recession, businesspeople themselves should start to look at ways they can fight the slowdown.

For marketeers this is will be a significant challenge, if consumers are spending less businesses will need to work smarter to win their spend.

The traditional knee jerk reaction would be to advertise more and attempt to entice customers with special offers. Both of these activities could deliver results, but it has to be remembered that sales will have to increase disproportionaltely to cover the costs of these activities all of which will be eating into gross profit.

And in an environment where customers don’t want to spend in the worst case scenario precious resouces could be end up being wasted on ineffective campaigns.

The most logical first step for businesses to take is to identify ways that sales can be increased or at least sustained without resorting an increase in marketing spend. Such a review of activity should include:

On-line marketing activities. This will include the use of eMail marketing and search engine optimisation. Both of these applications are easy and cost effective to put in place and when appropriately adopted can help to boost sales. See the Opportunity Wales Web site for further information (www.opportunitywales.co.uk)

Database reviews. Businesses often fail to make full use of their databases. For example,  businesses will have customers buying their goods and services for different reasons and in different quantities. So it would make sense to segment the database to identify the most profitable customers, the infrequent customers, the people who have enquired but not bought and cold prospects.

For each of these groups separate strategies and messages can be developed. Your most frequent customers need to be cherished, but remember they like everyone else will be likely to be suffering from this knock in economic confidence. So try and think of ways you can help them save money, after all they may already be looking for alternative suppliers as a way to save money.

Take time to speak to your most important customers to find out what they are thinking and try to identify other ways you could support them, essentially build the relationship. 

For other segments in your database, where possible use eMail to communicate to them, this is both fast and cost effective for you, but again ensure that you pay particular attention to the message. The more relevant you can make it to them the more likely you are to win their business.

Depending on the nature of your business, it may well be beneficial to proactively target new customers particularly if you operate in a specialist market where it is easy to identify your potential customers. Importantly, if after showing interest they don’t place an order do ask for feedback, the same is true for new customers who buy your products. By knowing why people are buying and not buying your wares you are in a far stronger position to create effective sales messages.

Review your product offer and the competition’s. This will be increasingly important in a time of economic slowdown. For example if your product sells for £100 and includes a 3 year warranty and is stacked against a competitor’s product that sells for £90 with a 1 year warranty you may be loosing business if customers are only looking at the headline price. It may even be that customers are not placing a value on the warranty. To help counter this messages to stress that your product costs £100 but includes a free 3 year warranty will help, or alternatively you could look at the cost of the warranty and strip it out of the selling price to get your price close to or lower than your competitor.

Measure your activity. When any marketing activity is being undertaken do ensure you have put in place ways to measure the effectiveness of your investment. If you can identify which activities your customers are reacting to, you can adjust and re-direct your marketing spend to the most effective channels.

Overall the most important thing businesses can do now is to have a positive attitude to taking on-board the challenges of the year ahead. 

Then for example by, reviewing marketing activity, bringing on-line trading capabilities up to speed, refining databases, reviewing the product offering and adjusting marketing strategy any business will be better placed to face the tougher trading conditions of 2008.

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