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5 Tips for Making Smart Marketing Decisions

By Bob Hougland

Just about every business is impacted in some way during challenging times, but businesses often lack the wiggle room to adapt. Consider the following as you look at your own situation:

1. Don’t make hurried, short-term decisions.

In a financial crunch, businesses often slash or eliminate expenses for things they can “do without.” In most cases, this can prove to be a short-term action with detrimental long-term consequences. First, if it’s something you can truly do without, it’s not likely that you would have been paying for it all along. Second, if you cut or eliminate something just telescope teamto save money without considering the impact on your overall operations, you’re selling yourself short. Rather than drop anything completely, consider reducing your expenditures in several areas to achieve the necessary economy. Consider involving at least your key people, if not your entire staff, in discussion of economization. You may be surprised by some of the ideas they have, and you’ll help maintain morale if they understand your situation and are given the opportunity to kick in their thoughts.

2. Don’t try to take up all the slack.

Part of the entrepreneurial spirit is rolling up your sleeves and doing whatever needs to be done. That’s certainly a viable position in difficult times, but don’t let it go too far. Your job is to stay focused on the big picture and to guide your company into the future, and you can’t do that if you’re bogged down for extended period in day-to-day details. Maintain your position at the helm, but pitch in where you can be most effective. Also, make sure that time-consuming activities are being performed by someone at the lowest appropriate cost-per-hour.

3. Tweak, rather than slash, your marketing program.

Over the years, I’ve seen countless companies dramatically curtail or even drop some or all of their marketing plans when finances are tight. Most often, I’ve seen advertising cut or even stopped entirely. That’s a false economy. First, there are still prospects and customers out there. That means opportunities to develop your existing accounts and generate new accounts out of what remains of your market. As some of your non-accounts become dissatisfied with their present suppliers because of cutbacks that competitor has made, they become qualified prospects for you. You need to maintain your presence in the marketplace and demonstrate your stability and reliability under any market conditions. Second, your competitors are still in place, and they will react to changes in the economy in various ways. Some will cut their advertising or reduce their services. Others will bite the bullet and maintain their marketing activities. Either way, don’t lose sight of the reality that you need to maintain your slice of the pie (i.e., your market share) regardless of the size of that pie, and you can actually carve out a bigger slice in down times by acquiring new accounts from your competitors. So, what about advertising? You can economize on advertising by decreasing your frequency. If you’re running an ad every week or every month, drop back to every other week or month. Cutting your frequency in half doesn’t cut your impact in half, and some people may not even notice the difference. Take a critical look at where you’re advertising. It’s likely that all of the media you are using aren’t equal in their penetration of your most important kinds of prospects, so make larger cuts among the least effective media. Don’t drop any one ad medium entirely since multi-media advertising is proven to provide the most bang for your buck. Cut back on each medium, but keep all in play. Also, maintain your memberships in trade associations and other organizations which get you and your company exposure. Continue to be seen and heard by your marketplace. Look for new opportunities to be interviewed or to publish articles in your area of expertise. That kind of exposure can have greater impact than paid advertising.

4. Keep your sales program alive.

One of my active clients has begun picking up some new accounts in recent weeks because a competitor has pulled his sales force off of all accounts below a certain dollar value and has ordered his sales staff to cut their travel in half. Some of their customers have reacted with resentment at not being seen as “important enough,” while others see a loss of the former level of customer service. Yes, some limits on travel can probably be made, but don’t do anything drastic which will be seen by your marketplace as pulling back. Your customers will understand less frequent sales calls, especially with the cost of gas. Keep your sales incentives in place and discuss with your sales staff the tactics and appeals to win over new customers from among those becoming dissatisfied with one of your competitors. Rather than dropping your prices, consider premiums or freebees to add value to your transactions.

5. Do seize on the opportunity to prepare for the future.

Take a step back with a critical look at your operation. Are you really organized for peak performance and optimum efficiency? Are there improvements you could make that will better your bottom line permanently? I remember from my military officer training that they stressed the best decisions are those which are made calmly and rationally before the map and manneed to implement them arises. Are your difficulties in dealing with a slow market perhaps due to your lack of advanced contingency planning? Business, like the economy, always goes in cycles. How well have you already prepared for a down cycle? Often, job descriptions have evolved from the skills of the people in the particular positions rather than from the functional needs of the business. Are you set up on a strict, vertical department basis? That may work, but you may also be missing opportunities to improve your overall processes so that there is better coverage of an entire process during a temporary or permanent absence. Have you effectively delegated both authority and accountability? If not, you’re missing an important means of optimizing your company’s performance. If you don’t have a Business Plan or Marketing Plan, create one now. Why? Studies have shown that we’re all most careful about what we commit to paper. A documented plan gives you a roadmap through good and bad times by making you think through your activities. General Eisenhower said that the planning for D-Day in WWII was obsolete when the attack was actually launched, but that it was all of the thinking and discussion that went into the plan that prepared our forces for victory.

Look at economic changes as opportunity rather than a problem. A glass-half-full approach will get you farther than a glass-half-empty start.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Bob Hougland holds a BA in Psychology and is a Vietnam vet with almost 5 years’ USAF active duty. He began his business career in the fast-track executive development program at AT&T, but sought out smaller employers. For most of a decade, he held sales management positions at L.A. radio stations KIIS, 93KHJ, and K-EARTH101, and created a successful marketing consulting division for RKO General Radio. With both sales management and marketing management awards under his belt, he founded RGH MARKETING. He now is the Owner/Consultant at SuperTemp where he continues his career of helping good organizations be better, new ones to get off the ground and bringing some back from the brink of failure. He is a strategist who sees opportunities where others see problems and bring lessons learned in a wide range of industries to bear on new situations. He can be reached at 803-774-7777 or SuperTemp@pacbell.net or you can read his blog at http://businessguy.biz/.

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If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.

 

Economic Slowdown?

By Robert Hougland

[dropcaps type=”circle” color=”” background=””]W[/dropcaps]hile some form of economic slowdown may seem possible at times, it is important to occasionally prepare for it. In 2007, the experts varied widely in their opinions of an economic slowdown. A few responsible opinions bear consideration. Interviewed on the KNX Business Hour, Jack Kyser, Chief Economist of the Los Angeles Economic piecharts graphsDevelopment Corporation retained his 40% possibility of recession prediction with the qualifier that Orange County would suffer more than other SoCal counties. On the same program, John Augustine, Chief Investment Officer at Fifth-Third Asset Management pointed out that two precursors to past recessions are not in place: there were no excess inventories in other than housing, and all segments of the export market were healthy. In testifying before a Congressional committee, Fed Chief Ben Bernanke expressed support for a prompt economic stimulus package, but maintained his position that 2008 would not see a recession.

Regardless of who was eventually proven right or wrong, we need to be ready for slow economic growth. Economic slowdown can mean that some marketplaces and the revenue they generate are going to grow more slowly than normal…and some may even decline for a while. Permit me to share some thoughts from what I’ve seen about small businesses during down economic times over the last 30 years. You may well have thought of all of these, but it might be worthwhile to refresh your thinking.

You’re an entity: What happens in your marketplace and/or what happens to any or all of your competitors does not necessarily have to happen to you in similar proportion. When revenues taper off or even drop dramatically, every company in that market is not impacted identically. You have opportunities to influence how a slowdown affects you. Focus on your opportunities, not your limitations.

Think wide, not narrow: Consider the value of chipping away at expenses and costs a little bit here and there rather than focusing on one or a few areas to slash. No one likes to lay off staff, but make sure you’ve explored the alternatives of reduced hours, cutting overtime, etc. And, consider the long-term implications of layoffs: you may be able to do some reorganization to permanently trim some fat. Just make sure your job descriptions are based on functions which need to be performed, not the particular array of skills of specific employees. Finally, don’t overlook profitability. If you can trim your profit expectations for a few months, you can relieve some of the cost-cutting pressure.

Don’t stop marketing: The biggest and most common mistake I’ve seen owners/CEOs make is to slash or even trash their marketing/sales/advertising/promotion budget(s) when revenue drops off. Of course, you gotta do what you gotta do. But, consider these things: 1) With very rare exceptions, your revenue stream isn’t going to totally dry up…there will be continued demand to some reduced degree for what you sell. 2) As your customers become more selective in their purchases of goods and services and as they seek to consolidate vendors, you have the chance to distinguish yourself even more from your competitors. 3) Its likely that some or possibly most of your competitors are going to chop their marketing budgets, and the ones who do are working from a position of weakness while those who don’t from a position of strength. 4) Numerous studies have shown that its more difficult for a customer to stop ordering or to cancel an order from a vendor with whom they have good rapport than one who’s just another supplier. 5) Perhaps most important, if you can gain some market share during a downturn, that will translate to better market share and profitability when the market rebounds. So, what can you do?

good times mkt sharebad times mkt shareback to good times mkt share

Maintain contact with your customers to the greatest degree possible. Talk to your large customers personally. Listen to their problems and see if you can offer any kind of help.

Be creative: Are there ways where you can “package” your products together to make them more attractive? Are there any premiums or freebies you could offer on the short-term? (Many industries, particularly the auto industry, have found that the most effective is something that improves the usefulness or enjoyment of the basic purchase). Can you give some kind of short-term financial break in return for a commitment to keep buying from you? Look at your vendors the same way. What can they do to help you to reduce inventories or costs?

Keep the blinders off: You never know what might be important to a customer or prospect and what will influence them to continue buying from you. Some examples from my experience:

A client was seeking to take a $400K/yr contract with an aircraft manufacturer away from a competitor. Knowing the prospect was looking to cut costs, we interviewed the buyer and learned they had problems with internal distribution of large, palletized shipments among their many buildings over several square miles. We met with the receiving supervisor and several shop foremen, then returned to the receiving dock with an idea: custom, rather than bulk, palletizing with additional color-coded labels to identify destinations, backed up with availability of one of our knowledgeable people to answer questions. The supervisor agreed to write a letter to the buyer on our behalf, and we got and kept the contract without having to underbid our competitor. Our cost was about one manday of blue collar time per month and we maintained a normal profit margin.

A company providing technical consulting services to a major insurance company was notified of the necessity to look at cutting back or even cancelling the contract because of new budget constraints. We put ourselves in the client’s shoes and took the initiative to present a new proposal. By separating the observation and information-gathering portions of the project from the analysis and documentation portions, we could have our high-hourly-rate professionals work at home instead of client-provided offices and reduce their on-premise time to alternate weeks and even every third week. Since we didn’t have adequate office space, all the consultants agreed to work at home and we would reimburse them for telephone expenses (this was pre-internet). Finally, we prioritized some of the steps in the project, identifying those which could be obeyed without interfering with goals, and we told the client we’d pick up the long-distance bills. The client said the reduced billable hours along with reduced transportation, lodging, per diem, etc. didn’t quite match his economy goal, but it was so close that he agreed to the changes and found the dollars he needed else where. Eventually, the hours that were postponed were made up.

My client who sold primarily to the hospitality industry was devastated by the impact of 9-11, and we rushed to see what we could do to salvage as much business as possible has hotel and restaurant business dropped dramatically. By learning some of the changes our customers were going to make, we were able to determine that earlier daily deliveries would be helpful. Since we used our own fleet, it was easy to schedule trucks to leave the plant at 2AM instead of 3AM to accommodate our customers’ new needs, and we implemented it within 24 hours. By taking a critical look at our internal operation, we were able to offer acceptance of orders until 4PM for next day delivery instead of 2PM. Several large accounts actually consolidated their business with us because we were there promptly with two workable solutions, even though the total volume lagged for a while.

Keep your presence out there: As much as possible, maintain your advertising and promotion activities so your name remains in the minds of your customers and prospects. I’ve lamented with a number of CEOs over the years who, after the fact, realized that pulling in their horns in caused them to lose market share during a tough period and that they faced an uphill battle to try to win those customers back. One client thought long and hard about not attending a trade show which they hadn’t missed in years. Deciding finally to go, he discovered that both of his major competitors backed out and he came back with plenty of business cards of people for follow-up.

Bottom line: Your customers will continue to buy something from someone. You need to be aggressive and show interest to keep them in your corner, although in reduced volumes for a while. When the economy bounces back, if you’re the supplier or provider who helped that customer through his rough time, you’re in the perfect position to reap the benefits in man carrying piea robust market. You could rebound with an increased market share.

Permission is needed from Lighthouse Consulting Services, LLC to reproduce any portion provided in this article. © 2014

Bob Hougland holds a BA in Psychology and is a Vietnam vet with almost 5 years’ USAF active duty. He began his business career in the fast-track executive development program at AT&T, but sought out smaller employers. For most of a decade, he held sales management positions at L.A. radio stations KIIS, 93KHJ, and K-EARTH101, and created a successful marketing consulting division for RKO General Radio. With both sales management and marketing management awards under his belt, he founded RGH MARKETING. He now is the Owner/Consultant at SuperTemp where he continues his career of helping good organizations be better, new ones to get off the ground and bringing some back from the brink of failure. He is a strategist who sees opportunities where others see problems and bring lessons learned in a wide range of industries to bear on new situations. He can be reached at 803-774-7777 or SuperTemp@pacbell.net or you can read his blog at http://businessguy.biz/.

If you would like additional information on this topic or others, please contact your Human Resources department or Lighthouse Consulting Services LLC, 3130 Wilshire Blvd., Suite 550, Santa Monica, CA 90403, (310) 453-6556, dana@lighthouseconsulting.com & our website: www.lighthouseconsulting.com.

Lighthouse Consulting Services, LLC provides a variety of services, including in-depth work style assessments for new hires & staff development, team building, interpersonal & communication training, career guidance & transition, conflict management, 360s, workshops, and executive & employee coaching. Other areas of expertise: Executive on boarding for success, leadership training for the 21st century, exploring global options for expanding your business, sales and customer service training and operational productivity improvement.

To order the books, “Cracking the Personality Code” and “Cracking the Business Code” please go to www.lighthouseconsulting.com.