7 Myths About Marketing in Economic Downturns

In an ideal world, marketing activity would be self supporting, always pay back multi-fold what it costs to execute, and be effective in reaching every potential buyer in the appropriate sector all the time. But in the world where the sky is blue, marketing activities are driven by several factors, including perceptions of the company and the head marketer there, economic forces that drive consumer behavior of all types and factors beyond your control.

As a result of these factors, marketing budgets are at the mercy of the reactions of the company to these perceptions. Many of these perceptions are flawed, skewed, marred by history, personal experiences of senior management, and most have no historical precedent or foundation.

Myth #1 - “Our brand is strong enough not to need support for the duration of the downturn.”

Fact: Few brands are strong enough to survive without advertising, product promotion and customer service support. Brands are like delicate houseplants - they need attention, support, bolstering, and polishing, (the marketing equivalent of nutrients, light and water) - or they will wither and shrivel to a shadow of their former self. This is not a position you want your corporate brand to be in when the growth engine for the economy revs back up.

Myth #2 - “If we cut back on marketing spending, we can use the money for other things internally, and increase the budget when things get better.”

Fact: Studies have shown that once that budget gets cut, it takes a herculean effort and a strong internal champion to boost it back to its former levels, and even if it does increase, there are much stronger conditions of ROI attached to its implementation. Once those funds are allocated elsewhere, they tend to stay there - after all, that other department doesn’t want to give them up either.

Myth #3 - “Nobody’s buying anything, advertising and promotions are a waste of money.”

Fact: Many studies conducted by prestigious business publications and university think tanks have come to the same conclusion based on the data they gathered on U.S. and in some cases global companies: Those that reduce their presence in their key service markets are in a far worse position in terms of profitability, market share and market competitive presence when the downturn eases and profitability growth returns than those that maintain their marketing activity levels. Those companies that are so bold as to increase marketing activity stand a great chance of taking market share from their less aggressive competitors and can rule the category if the downturn lasts long enough.

Myth #4 - “We can cut back [on marketing] now, and then ramp up quickly when things get better.”

Fact: This strategy has proven disastrous time and again, especially for companies that have inefficiencies inherent in their design, or product delivery channel. That inefficiency won’t allow them to “ramp up quickly”, since by that very inefficiency they will effectively always be “late” when timing the market - they are not market leaders but laggards, and thus the ramp-up activity gets started late relative to the buying cycle, and their more nimble competitors have already beaten them to the punch.

Myth #5 - “We should examine what’s working for us, and cut out everything else.”

Fact: This is not really a myth, but a knee-jerk reaction to a short-term slump in sales gross. Good marketing departments should be doing exactly that on a perpetual basis, not just when times are tougher. Why would any marketer worth their pay continue programs that didn’t work, effectively dragging down performance across the board and wasting money.

In addition, there should be metrics built into any campaign so that there is a way to “take the pulse” of its success, and mid-course correction is possible to boost effectiveness and increase ROI on a continual basis. Further, in some channels, there is a cumulative effect that blurs perceptions of what’s working and what’s not - interdependencies exist between channels that are not planned or scheduled but that live in the customer’s mind and trigger sales inadvertently. Cutting out what can’t be measured accurately hampers this effect, dragging down results with no apparent reason.

Myth #6 - “Marketing spends more money than any other department, they have the most room to cut budget.”

Fact: While spending may be a measure of power in some corporate structures, at least informally, return is really what counts when its budget review time. Marketing is one of the few departments that can actually point to contributions they make directly to the bottom line. There is a proven cause-and-effect relationship between sales gross and marketing expenditure for larger and enterprise-size firms. Increased spending in the IT department might yield long-term benefits, but better servers don’t often move more product, unless the product is server space. Cutting the marketing budget only reduces the opportunities available to build market share, boost product awareness and memorability in the mind of the consumer, and dampens profitability in the long run.

Myth #7 - “All of our competitors are pulling back advertising and media expenditures to save money, so we should, too.”

Fact: This kind of lemming-like sheep thinking can destroy your company! Your Mom knew better than this when you used the excuse “All the other kids are going, why can’t I?” and her response was likely something along the lines of “If the other kids jump off the bridge, are you going to jump, too?” Despite being competitors, their financials likely look a bit different from yours, and it’s foolish to think that you can mirror their moves and be successful - at best you will be equal! The smart money here is being used to take market share from your more timid competitors, by increasing presence and exposure, and cutting other less-than-mission-critical expenditures for a short period to accomplish it.

Bonus!
Myth #8 - “We should downgrade the quality of our marketing materials, use a cheaper creative agency, and mail out less frequently to save money.”

Fact: This set of moves will actually cost you both in the short- and long-term. You might save a very small incremental amount on cheaper paper, shorter, smaller brochures, cheaper handouts, smaller tradeshow giveaways - but the damage you’re doing to your brand and the resulting poor reflection on the company as a whole does far more damage than can ever be repaired by spending those few dollars later to try and fix it.

Not to mention shaking the confidence of your customers by giving them a visual representation of how poorly your company is performing! “Gee, they must be in trouble, this looks like cheap junk. Maybe I’d better take my business to the other company that’s likely to be around to support their products down the line,” is the thought you’re promoting by reducing quality in your publicly released materials.

Good design often costs less than bad design, due to fewer creative iterations, fewer miscues, greater effectiveness and higher return. Jumping ship from the agency you’re with if they are delivering on dollars spent just to save a little money is fool-hardy. The ramp-up time for a new agency to learn your needs, your products, your style and your brand will just about be exhausted by the time the average recession is over, and it will have cost you more to get the same level of productivity in that time, just in time to reposition for the new economic conditions.

When times get tough, the tough get going in the marketing department, providing the market with visual evidence of your corporate strength, your leadership role in the sector, your expertise in the market, and the supportive strength you offer for your products and services. Don’t believe the nay-sayers who want to slash your marketing budget, reduce your headcount and reduce the quality of your materials. Everything you do here reflects on the health of your company, and cutting here shows the most and helps the least.

About the Author
David Poulos, Chief Consultant at Granite Partners has been offering marketing guidance to firms for over 25 years. Specialties include non-profit marketing and full-scale strategic marketing campaigns. He can be reached at http://www.granite-part.com, or 410-472-4570.

Website Changes

We will be going through some changes in the next few days as we revamp our website. In the futture, not only will thie website be a resource for contractors, but also as resource for homeowners looking for contractors. We will be adding contractor directories, homeowner articles and other resources for homeowners to select the best contractors.

San Jose Remodeling Contractor

We are pleased to announce the launch of Nunley Construction, a San Jose Remodeling contractor, who is known by customers throughout the San Francisco Peninsula area for their reliability, reasonable pricing and use of top-grade materials. With over 35 years of experience their owners work each job and supervise all projects on a daily basis or perform the work personally.

Rockville Painting Company

We are pleased to announce the launch of Cracovia Contracting. Cracovia Contracting is an innovative repair, restoration and renovation company dedicated to finding creative solutions to your unique and challenging repair and remodeling problems.

Custom Sheds

We are pleased to announce the launch of BackYard Structures, a Chicagoland custom shed company that offers custom sheds, decks, pergolas and gazebos.

Denver Remodeling Contractor

We are pleased to announce the launch of Moore Bros. Construction, a Denver Remodeling contractor who specializes in green building.

California Roofing Contractor Launches New Website For Residential Homeowners

BetterBuilt Roofing, a California roofing company, is pleased to announce the launch of Getbb.com as an information portal for California home owners to find information about roofing and roof repair information. With articles being added almost every day and an online monthly newsletter of home remodeling tips the website is anticipated to quickly become the Northern California’s primary resource web site for roofing information.

Future plans include educational guides on selecting a roofing contractor, professional advice from expert roofing contractors, and a question and answer forum for California homeowners.

The web site will be an invaluable resource for California homeowners in finding accessible information to address their home roofing needs. Information will be efficiently categorized for easy navigation.

Tony Silva, owner of BetterBuilt Roofing stated, “goal for the website is to be the best home and family resource guide for assisting all homeowners in Northern California., “The depth of knowledge and resources Getbb.com offers is unparalleled.”

About BetterBuilt Roofing — BetterBuilt Roofing provides roofing systems and roofing repairs. Their mission, t maintain a customer friendly roofing company, built by a team of the industry’s best, in order to provide the greatest value and satisfaction to our customers makes them one of the most successful roofing contractors in Northern California. For more Information visit Getbb.com

North Shore Remodeling Contractor

We are pleased to announce the launch of Ridgeland Construction, a North Shore Remodeling Contractor who speciualizes in home remodeling, replacement windows and doors, carpetnry and general handyman services.

Minneapolis Roofing Contractor

We are pleased to announce the re-launch of All City Improvements, a Minneapolis roofing contractor who specializes in roofing systems, siding and exterior house painting.

Does Providing More Information Really Sell Jobs?

Think about the time when a customer or client asks you for more information or for a favor. Ask yourself this, ‘How is giving this information to the customer moving me closer to getting this job?’

If it isn’t, then you have to question yourself as to why you are providing it. In fact, make sure every action you make is moving you closer to at least getting a decision.

How do know if doing this favor is good or bad? It’s simple, when the customer asks you to give them more information, ask them, ‘What will happen after you give it to you?’ You need to set up every customer inter-action so that the customer is committing to you how important that it is to resolve their problems.

If you do not get this type of commitment, then you are setting up your next ‘think it over.’ Most salespeople think they are controlling the call by doing a ‘dog and pony’ show with slick literature or presentation books that cover a myriad of topics.

It is your job to get the customer to sell you on the one thing that it will take for you to sell this job to them. Then it is your job to deliver like a laser beam only that one thing. If you try to convince people they will become defensive. Instead, help them feel their pain vividly.

Let them discover how you can eliminate their problem in a unique way that only you can. In sales, you always get farther by getting more information instead of giving it. Remember, you get paid with decisions. Of course you get paid a lot more when the decision is yes.

Joe Crisara
www.contractorselling.com

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