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Marketing Through an Economic Downturn Paul Kassim Discussion Points FACT: Marketing is often the first budget to go in tough economic times. Discussion Points Consider this......... • Studies have shown that businesses maintaining a marketing spend emerge strongest when things pick up.......! Discussion Points Today we will consider......... • Why businesses need to consider maintaining their marketing • 10 tips for marketing in a downturn DON’T PANIC DON’T PANIC Revenue • Doom and gloom = Batten down the hatches • Marketing = and Margin Decline Cost to most Cutting Marketing Spend businesses • COMMERCIAL DECLINE CYCLE Declining Market Share Reduced Visibility DON’T PANIC • Revenue Marketing spendand should Margin not as a cost Decline be seen Cutting as an investment Marketing Spend • Take a step back and review your marketing strategy • Marketing Strategies need to be changed to suit the tougher market conditions Declining Market Share Reduced Visibility VALUE EXISTING CUSTOMERS VALUE EXISTING CUSTOMERS A change in marketing strategy to focus on drawing greater value from existing customers rather than finding new ones is a cost effective strategy VALUE EXISTING CUSTOMERS HOW? • Build and promote loyalty programs that reward repeat business • Give customers a reason to return in non peak times • Emphasize the value customers are getting from your brand, e.g. increased or extended guarantees • Ensure staff are trained in up-selling and cross selling techniques • Communicate to your customer base telling them how important they are, back this with say a purchase linked reward STOP WASTING MONEY STOP WASTING MONEY • Stop Ineffective marketing and advertising • Stop anything you can’t measure – Brand Advertising unless you have deep pockets – All of your marketing activities must be trackable – Any advertising or mailing that you can’t tell beyond all doubt its making you money, then STOP it today • BE RUTHLESS • Use response mechanisms – Dedicated phone numbers – Coupon or trackable response in direct mail – Use latest web site technologies. SELL BENEFITS SELL BENEFITS • Human beings are Naturally Selfish • Tuned in to the worlds favourite radio station – WIIFM – Radio WHAT’S IN IT FOR ME? SELL BENEFITS • Customers are not interested in your product • They want the PRODUCT of your product – EMBRACE THIS FACT • What can you do for them? • Change your mindset • Take time to understand your customers – Show them you understand – Sell them the benefits – Watch sales increase. RETURN ON INVESTMENT RoI RoI • All of your marketing must be trackable – Specific advert – Marketing piece – Communication • If you can’t trace a sale back to the origin of the lead..... – ......how do you know where your marketing spend is going? • If your marketing isn’t making you money – STOP IT TODAY • If your marketing is making you money – DO MORE OF IT! HELP YOUR FRIENDS HELP YOUR FRIENDS • Help your channel marketing partners • Look at building Referral Partners – Low cost if not ZERO cost – Directly drives customers to your business • Extra training on your products to channel partners – The more they know the more they will sell. MAKE SOCKS & PANTS? MAKE SOCKS & PANTS? • When things are tight consumers maintain spending on basics.....What they need • Focus marketing efforts on products and services that suit limited budgets e.g.: – Clothing manufacturer Socks and Pants – Travel Agent, Domestic Travel • Market to more financially secure customers...They Do Exist YOUR HIDDEN SALESFORCE! YOUR HIDDEN SALESFORCE! • When consumers are watching their money, greater emphasis is placed on the views of others! – They may not be prepared to take just your word for it. • Customer testimonials are worth their weight in gold – It says • “I bought this from these people and it did what I wanted it to do” • Buy this from them and you will be OK! • Offering customer’s referral incentives can be a good low cost marketing strategy DON’T DESTROY YOUR BRAND DON’T DESTROY YOUR BRAND • Tempting isn’t it? • Years of painstaking work can be destroyed by inappropriate discounting • When the economy returns consumers may be less inclined to associate the brand with quality • Margins may be very difficult to claw back • Offer added value...How? – Offer a fantastic GUARANTEE – Good way to overcome price resistance MEASURE MEASURE MEASURE MEASURE MEASURE MEASURE • Ensure your marketing system involves relentless follow up: Consider This..... – 48% of businesses MAKE a SINGLE follow up of a prospect – 25% of businesses make a SECOND contact and stop – 12% of businesses make THREE contacts and stop – ONLY 10% of businesses make more than three contacts.....A fortune is being lost! – Why? MEASURE MEASURE MEASURE • Why? – 2% of sales are made on first contact – 3% of sales are made on the second contact – 5% of sales are made on the third contact – 10% of sales are made on the fourth contact – 80% of sales are made on the Fifth to Twelfth contact MEASURE MEASURE MEASURE • Why? • If businesses make no more than one follow up to prospects 98% of the income is left for the competition! MEASURE MEASURE MEASURE • It Gets Worse! • Why do people stop buying from a business? – 1% Die – 3% Move Away – 5% Follow a friend or relative's recommendation – 9% Find an alternative they perceive to be better value – 14% Are dissatisfied with the products or services – 65% Stop buying because of INDIFFERENCE Summar y Summary • Take a Systematic Approach • Step Back & Review your commercial objectives • Ten tips for marketing in an economic downturn 1. Don’t PANIC 2. VALUE existing customers 3. Stop Wasting Money 4. Sell the BENEFITS 5. RoI 6. HELP your Friends 7. Make Socks and Pants 8. Engage your Hidden Sales-Force 9. Don’t Destroy your Brand 10. MEASURE MEASURE MEASURE Thank You www.bigstuffmedia.com