Recession Cure for Small Business: This Marketing Medicine Doesn’t Taste That Bad

In recessionary times it’s tempting to cut wherever there appears to be no imminent need, where returns are not obvious and immediate. As such, marketing tends to be one of the first casualties. Yet analysts advise businesses to continue marketing spending amidst grim circumstances. The case for a proactive approach appears sound, if not difficult to abide by in reality:

“When David Ogilvy, the so-called Father of Advertising, analyzed the marketing strategies of companies during the early-1970s recession, he discovered that companies that maintained their advertising in those years not only outran their rivals during the recession, but moved further ahead in subsequent years. A separate but similar study of the 1981-82 recession came to the same conclusion. If you must spend less on marketing, try more cost-effective methods first. Reminding customers that you’re the company that cares could be a logical first step to boosting your marketing ROI.”

From the editor: Don’ts for the downturn
PROFIT Magazine

Unfortunately, trying to convince small business owners who’ve not a lot of cash in the first place to continue brisk spending on marketing during recession is akin to pulling teeth … from a gorilla. And while it may seem a tad self serving for me to be writing this post given I’m the Internet marketer you don’t really feel like talking to right now, hear me out. A little marketing medicine today could help your business do better both tomorrow and long after this economic nightmare is over.

But first, you must get clear about one marketing truism.

Marketing is an investment in the long term viability of your business. Too many small business owners cling to the old idea that marketing is little more than pitching your wares on a billboard or buying an ad in the Yellow Pages. While selling per se is a component of marketing, it’s not even half the picture.

Then reconsider your marketing mix.

Remember the 4 Ps? Product, Price, Promotion and Place may be Marketing 101, but reviewing how each element supports an overarching marketing strategy is critical, and recession is the perfect excuse to question tactics that have been on auto-pilot for too long.

It’s a forgivable sin, however. Quite easily small business entrepreneurs are drawn in to short lived obsessions with a single, seemingly powerful marketing tactic, expecting a quick cure for what ails their bottom line (twitter anyone?). The big picture is shoved aside for nominal short term gains, but the business as a whole has not strengthened its market positioning, its staying power.

Besides, a back to basics approach is well aligned with a marketplace that can no longer afford to spend willy-nilly on hype. A quick review of the 4 Ps of marketing then:

1. Promotion: Stop thinking pitch and start thinking about how to connect with your target market. How will you hit them where they live? What’s on their mind at this moment in time? And how will you get the attention of a market that is more focused on value for money than it’s ever been before?
2. Product: What are you selling? Whether it’s a physical product or less tangible service, there’s no better time than a recession to reevaluate the promise you’re making to your customers. Can what you sell deliver to expectations and how well are you managing those expectations (using the other 3 elements of your marketing mix)?
3. Place: Offline or online, location is still paramount. Think about where your market is hanging out and where they will go looking for the things you’re selling. Do they use Facebook? Twitter? Blogs or forums? If the latter, which ones? Don’t wait for your market to come to you. They probably won’t without some help from a targeted marketing strategy.
4. Price: The perceived value of your product or service is very much attached to price. Of course, you must also deliver to expectations else customers will inevitably feel ripped off. Resist the urge to cut prices and instead focus on how you can deliver something of good value but at a lower price point if necessary. In other words, you can downsize the product while still protecting margins.

How to put together your marketing mix in a way that speaks to value-conscious consumers during recession? Harvard Business School summarizes it this way:

“Adjust product portfolios. Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as cars with fewer options. Tough times favor multi-purpose goods over specialized products, and weaker items in product lines should be pruned … Gimmicks are out; reliability, durability, safety, and performance are in. New products, especially those that address the new consumer reality and thereby put pressure on competitors, should still be introduced, but advertising should stress superior price performance, not corporate image.”

Marketing Your Way Through a Recession
Harvard Business School Working Knowledge

People are still spending. Are you going to claim some of the action?

Could some of the aforementioned “new consumers” be in your target market? And might it be fair to say that a great number of people in your market are still spending money but that how they spend their money has changed? We all need to live. We all need to keep our businesses running. Unless you plan a return to eating nuts and berries and running naked with the wild horses, the monetary economy will keep limping chugging along, with or without your business.

You need customers to keep the lights on.

Yet customers, especially in this economy, aren’t going to find you let alone buy from you if you can’t deliver the right “mix”–the precise combination of product, price, location and promotional value they want. The economy will turn around one day. If you want the lights to still be on when that happens, you need to market with might. You need to keep a laser focus. And yes, you’ll have to drop some cash along the way.

Do whatever it takes to inject more cash flow into your business so you can keep marketing.

Look at your fixed costs and see if there are some line items you can do without. Can you sublet some office space? Do you really need that second screen for your computer right now? What ongoing services can you scale down until business revs up again?

The ones left standing will be the ones who take a proactive stance today while the competition runs for cover. So find a way to keep marketing and do so with a clear purpose. It’s not a choice. It’s now or never. There may not be a tomorrow if you wait.

Some critical questions to ask yourself as you strategize recession survival:

• How have my target market’s needs and desires changed? What are their frustrations?
• How have my existing customer’s needs and desires changed? Are there gaps?
• Is the market for my product or service shifting demographically?
• Can I deliver the same quality and perceived value at a lower price point? How?
• How well does my existing marketing collateral align with these changes?
• What marketing tactics still work, what needs to go, and are there others I should consider?
• Should I work to strengthen my brand or is some tweaking overdue?

It’s a good day to do better with your marketing. It’s a good day to start thinking like an entrepreneur. And it’s always a good day to deliver more value to your customer. If nothing else, this recession will force you and to realize a more focused vision for our businesses and for our futures as an entrepreneurs.

What other questions might you ask yourself today to ensure your company doesn’t just survive the recession but thrives long after it’s over?