When the late Sam Walton, founder of Wal-Mart, was asked what he was going to do about the recession years ago, he answered: “We don’t plan to participate.”
What he meant was that he saw the slowdown as a chance to intensify his marketing efforts. Like many successful entrepreneurs, he thought that when times are good, you should market your products and services, and when times are bad, you must market them.
If marketing to consumers in a poor economy is important, then business-to-business marketing is critical.
A McGraw-Hill Research study of U.S. recessions, which analyzed 600 companies over five years, concluded that “firms, [which] had maintained or increased advertising during the … recession, could boast an average sales growth of 275 percent over the preceding five years. Those who cut advertising realized a paltry increase of only 19 percent.”
Though it’s hard to watch your company’s bottom line shrink as your customers and prospects battle to hold the line, these conclusions are worth considering. You must stay committed to the effort of not losing any more ground. This is no time to reduce your marketing; it’s time to focus more sharply on monitoring the needs of clients who have cut back on purchasing and meeting those needs better than ever. It’s a perfect time to devote the effort in refining your direct marketing to the finest level and use what really works. Two things result: Your costs are reduced, and your campaigns become more effective.
“The Cyclical Analysis of the Direct Mail Market,” a study by the Winterberry Group, concludes that direct mail is “the most dynamic part of the overall marketing communications mix.” Regardless of economic conditions, its use has grown consistently over the past 50 years.
BTB marketers understand this concept and are loath to water down or eschew the direct mail part of their campaigns. This mind set is further supported by the study, which also states that direct mail outperforms other media in periods of weak or moderate economic growth. Projections anticipate growth in the use of direct mail in excess of 7 percent from 2003 to 2005.
Direct mail works because it is not simply an advertising vehicle. Effective direct mail marketing is an interactive process, giving customers and prospects information about your company’s product/service that can benefit their enterprises as well as offers they find hard to pass up.
Here’s why you should continue direct mail marketing in uncertain times:
o Historically, companies maintaining or increasing their direct mail marketing through economic downturns increase sales and market share during and after the slow period.
o Businesses that regard direct mail marketing costs as investments rather than expenses enjoy higher long-term dividends.
o Companies that stay aggressive in a downturn seize market share from more timid competitors.
o A downturn is the time to solidify relationships with existing customers so they remember you when times get better.
o Continuing to market when times are bad projects an image of corporate confidence, strength and stability amid chaotic times.
o If a company’s market presence diminishes, so do its customers, and it costs more to regain the lost ground than the amount saved by slashing the marketing budget.
o When competitors cut back, marketing by companies that ride the downturn appears even more outstanding.
Though everyone seems focused on price during a down economy, value should be your real concern. Because tough times restrict budgets, you need to explore creative ways to make your direct mail marketing more cost effective. Here are tips on achieving savings when using direct mail:
o Spend only productive dollars. Focus on your audience. Sharpen your sights and aim only at prospects with the highest potential. It’s more effective to send smaller mailings to qualified prospects frequently than to send one large mailing to unqualified customers.
o Sharpen your copy. Distill your message into essential copy points that best convey your product/service and offer. Stress benefits, not features.
o Evaluate design. Examine whether you really need to send a package or an envelope with an insert. Investigate the possibility of doing a self-mailer or even a classy looking postcard.
o Assess printing. Do you really need a four-color piece? Two colors, when used creatively, produce an upscale look. Sometimes you can even get away with printing an attractive piece that does the job in one color.
o Save on lettershop services. By simplifying your mail piece, you can reduce production time and labor costs in the mail house.
o Investigate the possibility of postage savings. Consult your mail house about how to achieve maximum postal discounts.
For BTB marketers, the economic downturn is not an obstacle. It is an occasion to bolster loyalty and solidify your position as well as expand market share and boost revenue. The business of business is business, and it must be conducted daily. Do what you know works – market, market, market.