Special expanded verison: So you’re in a recession…

February 26, 2009

Happy New Year to all, and may we at Industry Blender wish you business success in 2009!  The holidays have passed and now its time to face the facts: The economy is “correcting itself.”  Not to worry; value is out there, and strategies for maximizing your dollar await exploration.  You can start with this, “expect one marketing tip, get seven more free” promotion.  OK so its a penny for our thoughts, but they do add up over time.  Now back to business.

It is proven that in times of hardship successful companies do not abandon their marketing strategies: they adapt them. Here is a quick guide to the things you can implement to make sure your business survives the recession.

1. The potential that lies in existing customers

Your best immediate sources of additional profits and increased business are your existing customers. These are the people who you’ve already invested time, energy and money with you to create a relationship. It usually between five to ten times easier to get an existing customer to buy from you again, than it is to get someone to buy from you for the first time. Prospects in particular are more likely to become customers if your marketing efforts are complimented by a recommendation from a friend or family member.

TIP: You can encourage your existing customers to attract new customers for you by undertaking a ‘recommend a friend’ as part of your promotional efforts. For example, you could send out an offer where your existing client and their friend will both receive a discount when they book a treatment together.

2. Developing a marketing strategy

Growth has nothing to do with the size of your business. It’s about how many customers and prospects you can market to. This is not the time to cut marketing spend. It is well documented that businesses who increase advertising during a recession, when competitors are cutting back, can improve market share at lower cost than during good economic times. You need to be aware that marketing efforts require careful planning and, in order to you assess your return on investment and effectively plan future marketing, you must keep a record of the sales generated as a result of your campaigns. Try and set some time aside each week for brainstorming new ideas or calculating your business growth.

TIP: There are, however, ways to market more cost effectively, perhaps by reducing your ad space or by sending out promotional SMS messages which reach customers cheaply, directly and quickly.

3. Data Capture

Build a mailing list. This will enable you to target your campaigns more effectively. Collecting the names is the hard part, so give your prospects a reason for them to provide you with their name and address – competitions, discounts, maybe even a loyalty card. Work at keeping your list accurate and up to date. Try to get hold of email addresses as well as (or even in preference to) contact details: email is cheaper and more versatile than postage. It is vital to monitor your customer’s purchase history. This will indicate whether they are cutting back.

TIP: You can use purchase history information to target those who have reduced the frequency of their visit. This will encourage them to revisit your business.

4. The power of the Internet

Many businesses still do not collect the email addresses of everyone who contacts them. Every time a business fails to capture someone’s email address they’re turning down the opportunity to contact them for FREE, for weeks, months and years ahead. Once you have Email Addresses – use them!

TIP: You can use email to thank people for their business, make them a special offer, give them a free article or report, send a newsletter, recommend a product or service they may be interested in or ask for referrals.

5. Utilizing technology

Technology helps to simplify working life, yet many businesses are reluctant to adopt new forms of communication. Consider the impact of a website showing photos of all your best work, compared to a simple price list or leaflet. Similarly, SMS text appointment reminders can be a worthwhile investment as they reduce no-shows and wasted staff time.

6. Advertising

It is essential that you measure the response to all of your advertising in order to evaluate whether or not it represented a viable investment and to shape your future investment decisions. It is worth asking how many people responded to your ad, how many of those were converted to a sale, what’s that worth to you? Some practical advice: an attention grabbing headline is essential, one change in headline can produce a 50-100% increase in response, and the ad itself needs to appeal directly to the interests of your target audience. People don’t buy your product or service. They buy the benefits that your product or service offers them. So spend some time getting clear on what exactly your benefits are – and then make sure that you articulate them precisely in all of your communications.

TIP: Research has shown that the effects of advertising are short lived. Therefore, in order to optimize your budget, it makes sense to spend smaller amounts very regularly. This will ensure that your business is consistently at the forefront of customer’s minds.

7. Promotions

Customers will be shopping around for the best deals. You do not necessarily have to cut list prices but you may need to offer more temporary price promotions. Targeted and personalized promotions are more cost efficient than just sending out one generic campaign. Customers are naturally skeptical of promotions so make sure you frame them appropriately, for example, ‘New Years Detox Offer’.

TIP: It is worth noting that discounts below 15% are often ineffective

8. Rewarding loyalty

Start a loyalty program. The customer gets a good deal, you get a keen customer. A simple approach is to give clients a free treatment after they purchase a set number of treatments. Invite your regulars to trial new products and treatments at a reduced cost, you could target this promotion based on client’s purchase history.

TIP: Customers are naturally dubious of sales offers so frame the offer as a “thank you” for their loyalty.

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