I was looking through my video library the other day when I ran across Groundhog Day, the Bill Murray film in which he is subjected to living the same day over and over. It struck me that many businesses awaken every day to the same challenges, yet use a continuous loop of the same solutions and hope for better results. Unfortunately, the previous day’s performance just gets repeated.
Conversations with colleagues often turn toward the “fear” that Sarasota is moving into a recession and that they should husband their funds to protect the bottom line. That usually means they stop marketing or seriously reduce their spending to practically nil. Where is that pesky groundhog?
Now, I am not a prognosticator and therefore cannot predict the state of Sarasota’s business climate nine months from now. I do have a substantial investment in it with my restaurant and face the same issues as you do, but I strongly believe that the market will be very robust. No shadows for me.
I suspect that bombardment of negative press fuels all these unwarranted fears; the real estate slowdown undoubtedly leads to further angst. History has clearly demonstrated, however, that a primary driver of consumer spending is consumer confidence, and I think there is a lot of positive news in all these so-called negative stories.
For example, while the dollar is weak overseas, the Canadian dollar is strong and the Euro is even stronger. We should not only see many local people stay closer to home but we should also see a major influx of international visitors who will have the funds to ignite increased sales in all sectors. I trust our travel and real estate institutions are addressing those marketing targets. I would.
Perhaps it is time to take a fresh look at your strategies to make fundamental changes that will change your business momentum. For one thing, I would not cut spending. Studies by the Association of National Advertisers and its agency network partners have revealed, seemingly counter-intuitively, that the time to reduce spending is in an up market, not in a down one. Dr. Noel M. Noel, professor of marketing at USF Sarasota-Manatee concurs. “Businesses that keep advertising through a recession grow three times faster than those that don’t,” he says.
In an up-market, consumers spend freely. Good marketing will help ring the cash register. So will bad marketing. But the momentum is all upbeat.
In a down market, you have to struggle for every dollar. All sorts of aggressive tactics are required. You need to increase your frequency of exposure against your best customers. You should never go totally dark. You may still need mass market exposure, but it can be significantly reduced while you focus on the shorter-term sales opportunity and use other communication tactics.
Consider cutting back your TV to fewer spots per week or fewer weeks. If your creative works, shift from TV to radio. Use smaller ads in magazines and newspapers and negotiate for better positions. A page opposite a cover in a magazine, for example, has about 20 percent greater readership than one inside the magazine. Many scheduling tactics in all media can stretch your marketing funds.
If you do reduce your ad size, remember to cut back on the sales message. The smaller or less frequent the ad, the less you can say. (I should point out that I have not always followed my own advice and I have always regretted it.)
What you must do is diligently cultivate your loyal customers. Retaining a customer is 10 times less costly than courting a new one. Use e-mail, newsletters, blogs, social networks, viral marketing, public relations and all kinds of online media options, none of which are very expensive.
Finally, increase your use of online paid search. Online marketing can be a very cost effective way to boost your bottom line. The Oct. 23 issue of Advertising Age cited research that demonstrated that “people that visited packaged goods sites via search…tended to be higher income, better educated, more female and bigger category spenders.”
Pay-per-click advertising has many advantages over traditional advertising, including the fact that you set your own budget, and can increase or decrease the amount as often as every day. You’re not tied to any long contracts that can’t be canceled so you can put your campaign on hiatus. You can also run your ad within a set radius, such as within 25 miles of Sarasota. This is a huge advantage over traditional media. You’re only paying for people who actually go through to your Web site, not just eyeballs that see your ad.
So let’s not let the Punxsutawney Phils drive our strategy. There is a lot of sunshine, and now is the time to drive your marketing.
Lou Schultz owns LMS-Unlimited LLC, a full-service communications consultancy, and Canvas Café Leysin in downtown Sarasota. Formerly, he was CEO of Initiative Media, a $23 billion global media services company. His awards include Mediaweek’s Director of the Year and Advertising Age’s “Top 15 Agency Innovators.” Contact him at [email protected]