The Economic Conundrum…Expand or Contract
In The News:
- The U.S. economy loses jobs for 6th straight month as employers cut back.
- The depreciating dollar…American currency at a 10 year low.
- Nearly 8,000 households are entering the foreclosure process every day.
- Perception is more important than reality…75% of Americans believe we are in a recession.
Open up the paper, watch the TV, listen to the radio…these are the story’s of today. Regardless of whether you are a CEO for a multi-million dollar organization, or an entrepreneur assessing how to manage your business, the challenges before you in these difficult economic times are common to all.
Typically when business slows, profit margins narrow, and a prolonged downturn is projected, all aspects of the organization are evaluated in an effort to reduce operating expenses. Unfortunately, some executives believes that cutting the “fat” means reducing spending, and reducing spending means less advertising and marketing.
Consider a very simple, time tested, business equation: Marketing + Advertising = New Sales
Also, let’s evaluate three additional components linked to periods of economic downturn”
- Your competitors will most likely follow the same flawed business practice of decreasing the amount of money they allocate to marketing. Thus there is less “noise” for the consumer to sift through, and the opportunity exists for increasing both market share and brand awareness.
- Increased marketing activity during this period should be designed to achieve two results. Understanding that people and/or businesses have less “disposable” money, the goal is to convince them to consider your brand over the competition. The second goal is less tangible, but just as critical. When the economy turns again, your business should have achieved a higher share of the market, forcing the competition to spend money simply to catch up to you.
- On average, only 10% of buyers make their decision solely based on price. If we consider extreme economic circumstances and aggressively triple that to
30%…that still leaves 70% of consumers basing business decisions on other determining factors.
When considering the basic business equation coupled with the supporting data…why would you possibly consider shutting down the engine that propels your business forward? There is a better way!
The problem with traditional marketing is that it is often subjective in nature, and thus the results are difficult to accurately measure. Marketing professionals generally term this as the “shotgun” approach. Or to put it simply…shoot enough pellets and you are eventually going to hit something!
This is an expensive tactic, and certainly hard to justify for the times we currently endure. Rather than cutting back on your marketing budget arbitrarily, consider trading in that “shotgun” for a “rifle”. At Forward Progress, we believe in accuracy over ambiguity. Our proven methodology will allow you to maximize your marketing efforts by creating an efficient and prudent strategy targeting the correct audience with the correct message. In these difficult economic times our goal isn’t to help you survive…it’s to help you succeed.
Expand or contract? Your future depends on your answer.
Rick Sherman is a senior level business advisor and coach for Forward Progress, Inc. and the President of New Essence Media, a marketing agency focused on developing strategies through “Intelligent Integration”. To contact: [email protected]