Figures released by the government today confirm that the UK is officially in recession. In the 4th quarter of 2008, the economy shrank at the fastest rate in almost 30 years. We haven’t been in an economic climate like this for almost two decades.
To anyone living or working in the UK, this isn’t exactly news. Times have been hard for a while and not a day goes by without another well known business making mass redundancies or calling in the receivers. What may come as a surprise is the fact that the current situation might offer you the best opportunity to grow your business that you’ve ever had.
As Harvard Business School’s John Quelch famously stated “It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at a lower cost than during good economic times.”
Godfather of Advertising, David Ogilvy, agreed by saying "Studies over the last six recessions have demonstrated that companies which do not cut back their advertising budgets achieve greater increase in profit than those which do cut back.”
It takes real guts to increase marketing spend during a recession. Many of your competitors will pull back on their advertising, which gives your messages a greater chance of being noticed. Customers will be more likely to build a relationship with your brand and less likely to return to previous suppliers that no longer engage with them.
So, you need to market your way through this recession, but just how do you do that with every penny you earn being used to survive?
A couple of pointers to get you started:
- Analyse everything. Do you know where your customers are coming from? How much does it cost you to acquire a customer from each source? Does the amount these people spend differ depending on how they came onboard? With these figures in place, you will know your most profitable marketing activities as well as ones that could be operating at a loss.
- Make more of your existing customers. Some marketers will tell you that it’s seven times cheaper to convert an existing customer than it is a new prospect. Other marketers will tell you it’s ten times cheaper, and some say fifteen times. Whatever the correct figure, it’s certainly reason enough to start directing money at your customer database. Perhaps you could send a newsletter, or some promotional materials, to your existing customers with the aim of cross selling, i.e. getting them to purchase additional products/services from your company. Even if they are not ready to buy right now, you’ll be at the forefront of their mind when they are.
- Use the internet to your advantage. If you aren’t selling via the internet then it’s time to start. Businesses are often surprised with just how cost effective online marketing can be. As you are selling your products or services online, your door is always open and there are no geographical limitations. Test out search engine optimisation methods and Pay Per Click advertising campaigns to see what brings in the most revenue.
Marketing your way through the recession doesn’t have to cost a fortune. By working smarter and making every penny count, you could see your business come out the other side of the downturn in a much stronger position than it is in now. Good luck.