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• Marketing 2009: A Game Plan for the Recession

  By Joe Walsh

  Posted on November 28, 2008 at 9:00 am

  
  
  

  You will learn:
  1. Hold the caffeine; listen to reason.
  2. What Peter Drucker had to say.
  3. Research results on recessionary marketing.

  A year has passed since we last broached this subject and the situation hasn’t gotten a bit better. In fact, it’s much worse. Windows on the taller buildings on Wall Street are being nailed shut, and coal is beginning to look like a sensible and thoughtful holiday gift. So what do we do now? More of the same? In a way. Only more so.

  In the words of Peter Drucker, the father of modern management, “…the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are ‘costs.’”

  While he was referring to business in general, one has to keep in mind that the purpose of any business, whether it manufactures widgets or offers a service, is to stay in business. That requires marketing.

  Using this as a basis, what is the worst thing a business of any kind could do to try to save money during a recession? Stop marketing. In fact, now is the time to increase your efforts.

  Wired Magazine reports that the profits at Whole Foods (sometimes known as “Whole Paycheck”) have fallen to a point that in July, August and September, the stores made a total profit of $1.5 million. Total. For 278 stores. Which means the profit for each store is running at about $6.40 an hour. That’s less than minimum wage in 38 states. The company’s marketing efforts are not up to par (nor are their stores—shelves are growing bare).

  But undeterred, Wegmans Stores, a chain of super-nice grocery stores based in Rochester, New York, offering extremely good service and a premium product line, are growing like gangbusters all the way down the East Coast. Their latest marketing push? They are lowering prices on everything, maintaining service, while at the same time opening new stores on an almost a weekly basis. In which store would you rather own stock?

  “But,” you say, “I’m in a service or relationship business. What’s supermarketing got to do with me?” We say the tactics might be unrelated, but the underlying aggression is not. Make this the time to prove your mettle.

  Here are some examples of how:

  1) Don’t stop recruiting.

  One of the biggest errors firms made during the last economic downturn was to cut back on their recruiting efforts. When the economy began to improve, the rush to hire more professionals became a real slugfest, with firms battling it out to get any qualified talent in the door. Keep your lateral and student recruiting levels near or at the same levels that they are now, and you won’t have to lower your standards later just to get professionals to fill the empty chairs. One of our clients, the Reznick Group, a fast-growing accounting firm, has recently taken a step to make themselves more visible on their page at Monster.com. Now, when prospective employees are looking for jobs, they are surrounded by advertising drawn directly from Reznick Group’s promotional materials.

  2) Ratchet up traditional advertising, not down.

  The American Association of Advertising Agencies recently published a study entitled “Should Firms Increase Advertising Expenditures During Recessions?” Of course, you can guess what their answer was. But they also have the data to prove it: “…results indicate that advertising creates a firm asset by contributing to financial performance for up to three years in the future. Further, increasing spending on advertising during a recession leads to benefits that exceed the benefits of increasing advertising during non-recessionary times.”

  The chart below contains information included in the AAAAs study mentioned above. As you can see, time and time again, marketing has proven to be an excellent investment. (And how many of those are there these days?)

  

  To put this in layman’s terms, when times are looking bad, people start looking for someone with an answer, a lighthouse in the midst of a storm, as it were. A second client, Navigant Consulting, has made an agile response to the financial crisis by rotating new ads into its mix that position Navigant as the go-to firm for creating and protecting business value in challenging times (the “Lead by Example” campaign). By staying in the spotlight, by having the gumption and grit to stand up and say “Lead by Example,” they look like a leader—when people are looking for someone to follow.

  A bonus to an approach like this is you’re also dealing with less noise from your competition. That makes whatever you do not only easier to see and hear, but easier to remember.

  3) Master Search Advertising.

  Paid placement on search engines makes economic sense for two reasons. One: Smart advertising dollars are finding their way online (because that’s where the buffalo roam, even the big game). And two: Search advertising is trackable, meaning you can measure its return on investment. Here are the basics:

  Let’s imagine you’ve optimized your site internally (big assumption and a different article). Your rankings are improving, but not fast enough for you. You can “buy” keywords (or at least get in the game for these words) to augment your SEO work. But it’s a little bit like picking your table at a casino: High-reward words (very competitive) require high contributions to play.

  How it works:

  • Select keywords for what you’re trying to promote (a service, an event)
  • Bid on keywords
  • Write a simple text ad that includes those keywords
  • Specify broad match, phrase match, exact match
  • Target a relevant place for your ad (your Web site, mini-site, etc.)
  • Measure what happens

  These keywords, in “Google speak,” are called AdWords. “AdWords” refers to the text ads that appear as “sponsored links” on the right of the search results page. AdWords are considered a form of direct marketing because your message appears only to the interested buyer.

  There are challenges, however, with Google AdWords:

  • Choosing the right words (Choose carefully. This is part art, part science.)
  • Determining the optimal bid (Same: Art. Science.)
  • Managing click fraud (Another story not included here, but important to acknowledge.)
  • Integrating the campaign with your Web analytics (Modify your site in response to poor results. Goose your site in response to good results.)

  The easy part? AdWords gives you substantial control over your costs.

  • “Impressions” are free. You pay only for “clicks.”
  • Targeting is more accurate with AdWords than with any other medium we’ve found.
  • Because clicks are countable, you can demonstrate ROI to your CFO.

  4) Segment, target and go direct.

  Examine where your revenue is coming from and develop an opportunity hit list. Of course you know who your top 50 clients are, but do you know what they really want or need? Now is the time to do that data mining you’ve wanted to do for a while. Even better, get your professionals to ask your key clients what else you could be doing for them to deal with their economic stress. Consider creating unusual direct mail promotions to facilitate or follow up on these conversations.

  We’re not talking about the annoying, faux-personal junk mail that plagues your mailbox and mine. And certainly not “act-now, one-time, buy-one-get-one-free” offers designed to ring up sales. Nor are we talking about professional service staples like newsletters (don’t get us wrong, we are big fans of newsletters, like the one you’re reading now—but newsletters seem to be either canned or vaguely irrelevant; in other words, more clutter). The direct outreach tools we propose are much more refined, targeted and, well, expensive than the usual fare.

  The Top 20 U.S. accounting firm, Dixon Hughes, uses concentrated flights of direct mail, like the piece pictured below, in conjunction with a sophisticated telemarketing program to set up qualified leads for its professionals. There’s no waiting for the phone to ring at Dixon Hughes.

  

  5) Show up and share the knowledge.

  Rainmakers are going to use this time to really increase their one-to-one meeting opportunities. Visits to client’s offices should definitely be high on your list of marketing tactics—but do more than just check in. Now’s the time to develop a unique CLE program or branded educational workshop for clients as a value-added benefit. And please, don’t skimp on the production value of your presentation. If you are going to share leading thoughts, make sure your material makes you look like a leader. This recent pitch book, shown below, created for the litigation boutique, Gibbs & Bruns, is built to impress.

  

  Summing up

  Remember that downside and upside are both sides of one coin. While we tend to favor smart risks and work with smart risk-takers, we don’t think you should be loose with your marketing budget. In fact, we think you should do less, better.

  Times like these often give marketers (and management) the permission to say no to items that made little sense, even in a flush economy. We advise clients to cut those types of items and reinvest them in very concentrated ways. You don’t need bigger budgets to do this, you just need fewer programs. Fund the best ideas with couch money, as we like to call it.

  And try to continue to do less, better as business inevitably improves.

  To learn more about Greenfield/Belser and our work, call our marketing team at (202) 775-0333.

  Tags:

  Advertising, AdWords, Direct Marketing, Marketing, Recession, Recruiting, SEO, Thought Leadership 

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  Pingback from Average Marketing Budgets and Expenditures for the Legal and Accounting Industries June 3, 2009 at 11:19 am

  [...] In a recent study by the American Association of Advertising Agencies (featured in our e-newsletter last November), firms and companies that maintained or increased advertising in a recession had [...]

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