A study showing the long-term benefits of maintaining an advertising presence during a recession.
There's no denying it, small businesses are having to rein in their costs, thanks to the current economic climate. What does that mean for marketing? Should business owners be cutting that too?
The answer partly depends on whether you consider marketing to be an expense or an investment. Related to this is whether or not you're measuring the results of your marketing. If you can measure it, do so. If you can't, how else are you justifying the expenditure? Ask not what will happen if you do spend £XXXX on a new brochure, website, display ad, directory entry, PR event or whatever, but what will happen if you don't. Not just 'are they cost-effective?' but 'are they effective?'
This question of measurability is key, and it's something that marketers traditionally have always hated. Accountants slashing their budgets, stifling innovation and growth. Marketers believe you have to invest in creative marketing in order to create a competitive advantage. I'm a marketer myself, and I do think it's short-sighted to make swingeing cuts in marketing during a downturn, however tempting, because marketing now is an investment for the future. Nevertheless, there's no point fiddling with marketing while the business burns. The idea is to market smarter – DON'T drop all marketing but DO question every pound spent, keep any eye on the results and stay flexible. Then marketing pays its way and nothing is wasted.
For example, a mail order firm used to send out its sixty page brochure twice a year, with smaller versions in between. Instead, they took the decision to send only one brochure a year and in between times send frequent email updates, attracting customers to their web store. The money saved in print, design and distribution costs was significant, even after the business reallocated budget to the email updates and improving website visibility.
It can be the small changes that make all the difference: halve your print advertising and put the money saved into getting your website found in searches, reconsider those annual directory entries – do they actually bring in business or are you just in them because everyone else is? Look at ways of retaining existing customers and cross-selling rather than focusing solely on getting new customers. Measure what you can: conversion rates, click-through rates, cost per acquisition... it's amazing how many businesses know nothing about their website performance except the number of 'hits' it gets. And most importantly, respond to changes and make the most of any opportunities. We all need to stay on our toes.
Robin Houghton of Eggbox Marketing is an online marketing specialist and author of eTips: monthly marketing advice and ideas for small businesses. Sign up at eggboxmarketing.co.uk/etips.
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