It’s a challenging economy. Consumers are scared. Marketers are scared.
A number of bloggers have written about what to do. For example, Duck Tape Marketing has an excellent post, 7 Time -Tested Ways to Dig Out from a Recession. IttyBiz also took a swing at the ball and hit the mark (don’t you love the smell of mixed metaphor in the morning) in Blood in the Streets: Home Business Economics in Troubled Times.
These posts, and others, offer advice that is focused around two themes, confidence and customers. These are themes this blogger thinks are very important. When running a business in a challenging economy, they are even more important.
There is an expression, “above the line spending,” that you have probably heard before. Above the line spending refers to budget items that are fixed, money you have to spend to keep the business running. In the past, P&G considered advertising one of those expenses. They knew that keeping the brand in front of consumers would keep the business running. Advertising gave their customers confidence in their brands. In bad economic times they continued to advertise while competitors cut spending. As a result, P&G’s brands gained market share.
In good times and bad a limited number of heavy users drive the majority of sales in any category. Heavy category users are heavy users for a reason. It isn’t capricious. They have needs driven by their circumstances. Their needs don’t change in a challenging economy, they just get more discriminating, so it’s even more important to focus your efforts on them.
Hip Shots
- Have no fear. Win consumer confidence and they will buy from you. Be confident in your business strategy and your value proposition. This doesn’t mean ignore reality. Watch spending carefully and be even quicker to cut tactics that aren’t working. But, stick to your strategy.
- Target heavy users. This group has a special and distinct understanding of the category and the brands competing for their attention. Focus your marketing on them and win their confidence.
- Invest in your best customers. Your current best customers are always your most efficient source for business. Be sure they are confident in your business. Don’t ignore them. They are scared too. Follow the five relationship marketing principles and your will reinforce your value to them and their value to you.
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{ 3 comments… read them below or add one }
This is absolutely spot on. I especially like the emphasis on heavy users. The trouble is, many companies have no idea who they are or how to reach them. You must start studying and segmenting your customer base. Now.
I believe this emphasis on current customers and ROI will accelerate the move to digital marketing. I wrote a feature-length post about it many months ago, and unfortunately it’s proving true:
“5 Reasons Digital Marketing Will Thrive in the Recession”
http://is.gd/1nkr
Let me know what you think? All the best,
j
Jason Baers last blog post..3 Reasons David Lee Roth is a Bad Internet Marketer
I’ll add to this (I’m thinking about it a lot lately): offer something that matters. This is a rotten time to be in the frivolity business. Find what truly matters (to your customer, not to you, of course) in your product, and make sure you’re articulating it.
@jason – Stay tuned. I am working on a series about customer marketing. The first post will talk about how to identify best customers.
@sonia – One of the best ways to create competitive insulation is to add value that is incremental to the transactional functional benefits of the product or service. And too true, it’s only value if the customer sees it as such.