When developing your marketing campaigns, whether they are direct marketing or online advertising, there is "homework" to be done before hand. Planning helps reduce risk and increase likelihood of success. This checklist provides the essential planning information and activity required to create a successful direct marketing campaign.
1. Executive Summary
2. Situation Analysis - Marketing environment, economic trends and competitive analysis. Analysis is not just a collection of information but an analysis of importance and impact of information (Not just the What, but the Why).
3. Target Group Profile(s) & Analysis - Know your audience(s) Opportunity and Issues Analysis - Including SWOT (Strengths, Weaknesses, Opportunities, Threats)
4. Goals and Objectives: Quantitative - Build lead database, acquire new customers, cross-sell, new product introduction, prospect cost per lead, acquisition cost, retention, Win back cost, return on advertising Qualitative - Increase customer satisfaction, enhance brand perception, etc.
5. Marketing Strategy - Including differentiation/positioning/uniqueness
6. Tactics
7. Test Plan - Direct marketers always TEST! List/media, offer, visuals, copy
8. Budget/Financial - Budget, Breakeven scenarios (0 profit, % profit, etc.)
Direct Marketing Creative Strategy & Campaign Plan Checklist
1. Advertising Objectives - Primary (e.g., response, sales), Secondary (e.g., brand awareness)
2. Marketing Messaging - "The Promise"
3. Product/Service Description - Benefits, benefits, benefits. Practical, emotional
4. Customer Problem Creative Must Solve
5. Media Plan-Media Mix and Budget
6. Creative Strategy - Know your audience!
7. Offers and Call-to-Action - Hard offers, soft offers
8. Direct Marketing Essentials - Urgency, ways to respond, messages/affiliations to reduce risk in mind of customer
9. Copy/Layout
10. Legal - Know FTC, FDA and FCC advertising guidelines. Disclaimers. Self-regulation
When it comes down to fundamentals: The right offer to the right person at the right time. Relevancy and personalization are ways to win better response in direct marketing. Test, test, test...and track, track, track.
Wednesday, September 15, 2010
Monday, September 13, 2010
Marketing Strategy - Double Your Client Base Using The Two Step Approach
What do you think the biggest mistake most companies, that sell person to person, make in advertising?
My belief is that it is using the wrong overall strategy.
Most companies that sell one on one advertise with a one step approach. They place an ad with the immediate goal of getting new customers. If the first call doesn't lead to immediate business they often scrap it all together.
In my opinion that's an awful lot to ask from a single ad and a terrible waste of potential business. Especially when you look at how pathetic and predictable most advertising really is. (Just open up your phone book if you want to see what I mean)
A much more profitable strategy for advertising is using a two step approach. This method is not new. Direct marketers have been using it for years. They learned that it is much easier to get people to raise their hands first and say "I'm interested in that" and then offer the sales piece rather than just hitting everybody with a sales piece. This approach is much more cost effective and profitable as well.
So instead of asking your ad to convert readers into immediate clients it gently moves your prospect along with baby steps in a comfortable non-threatening way. With the goal of simply getting their name and contact information.
Once you have that, you've got it made. Rather than one chance of selling them from your ad you can now follow-up as often as you like knowing that the dollars spent are being targeted like a high-powered rifle at prospects that truly have an interest in what you are offering rather than the typical shotgun approach.
So, you ask, how do I get them to raise their hands and give me their name and contact information?
It's simple. You make them an offer they can't refuse.
The best way I have found is to offer free, highly useful information that they cannot get anywhere else. Let's say, for instance, a landscaping contractor wants to target prospects who would be interested in building a Gazebo.
By offering a free report like "How To Increase The Value of Your Home With Landscape Improvements" you peak the prospect's interest and automatically know they are interested in what you have to offer. If done in the correct way this can massively increase the number of leads you receive.
Once they have requested the free report you have already set yourself up as the expert and can continue to follow-up with the prospect until they convert into a client. This follow-up should be low pressure offering additional information, free quotes or analysis, etc. in the attitude of offering a service to your community as the local expert. You should not be afraid to ask if you can help them, but you should never beg either. Always keep the "expert" attitude in mind.
By using the two step approach, continually building your database and using regular follow-up you will not only get business for right now but you will be planting a business crop that will bring you an abundant harvest for years to come.
My belief is that it is using the wrong overall strategy.
Most companies that sell one on one advertise with a one step approach. They place an ad with the immediate goal of getting new customers. If the first call doesn't lead to immediate business they often scrap it all together.
In my opinion that's an awful lot to ask from a single ad and a terrible waste of potential business. Especially when you look at how pathetic and predictable most advertising really is. (Just open up your phone book if you want to see what I mean)
A much more profitable strategy for advertising is using a two step approach. This method is not new. Direct marketers have been using it for years. They learned that it is much easier to get people to raise their hands first and say "I'm interested in that" and then offer the sales piece rather than just hitting everybody with a sales piece. This approach is much more cost effective and profitable as well.
So instead of asking your ad to convert readers into immediate clients it gently moves your prospect along with baby steps in a comfortable non-threatening way. With the goal of simply getting their name and contact information.
Once you have that, you've got it made. Rather than one chance of selling them from your ad you can now follow-up as often as you like knowing that the dollars spent are being targeted like a high-powered rifle at prospects that truly have an interest in what you are offering rather than the typical shotgun approach.
So, you ask, how do I get them to raise their hands and give me their name and contact information?
It's simple. You make them an offer they can't refuse.
The best way I have found is to offer free, highly useful information that they cannot get anywhere else. Let's say, for instance, a landscaping contractor wants to target prospects who would be interested in building a Gazebo.
By offering a free report like "How To Increase The Value of Your Home With Landscape Improvements" you peak the prospect's interest and automatically know they are interested in what you have to offer. If done in the correct way this can massively increase the number of leads you receive.
Once they have requested the free report you have already set yourself up as the expert and can continue to follow-up with the prospect until they convert into a client. This follow-up should be low pressure offering additional information, free quotes or analysis, etc. in the attitude of offering a service to your community as the local expert. You should not be afraid to ask if you can help them, but you should never beg either. Always keep the "expert" attitude in mind.
By using the two step approach, continually building your database and using regular follow-up you will not only get business for right now but you will be planting a business crop that will bring you an abundant harvest for years to come.
Wednesday, September 8, 2010
Direct Marketing Strategies - Generating Leads on the Internet
In this article, we offer an overview of the various sources of prospects for network marketing or any type of business using the Internet. To do this we took a look at some of the latest marketing methods, techniques, suggested lead sources available today on the Internet. Here is an overview:
* Facebook/MySpace/LinkedIn - The largest social media sites are excellent, representing millions of possible free leads for your business. The most amazing feature offered by these sites are availability of profiles of people worldwide who need your product or services. The new Advanced Search functionality on Facebook, as well as MySpace's more all-embracing search capabilities can quickly locate affinity groups, geographic proximity, age, and other demographics to quickly find prospects most likely to be your prospects.
* Video Marketing - Videos on YouTube can be one of the quickest ways to develop viral content. Video marketing not only can be used to publish your informational content to hundreds of highly-ranked sites, but also creates backlinks to your primary website or blog.
* PayPerClick Marketing - This is a paid strategy using Google, Yahoo, and Bing paid ads. We recommend this method only after some training, since it can be very expensive. It can also be the quickest way to generate business leads.
* Blogging - Self-hosted Wordpress.org blogs are a core part of the personal branding strategy for many people. Blogs are among the easiest sites to rank quickly. It is simple to setup a Wordpress blog with most hosting companies, but we recommend you choose one that uses CPanel (very common) and then find one of several tutorials available on YouTube for step-by-step instructions.
* ListBuilders - This is a paid strategy in which you can simultaneously create a personal subscriber list while having the "right" to periodically send your ads to a larger community owned by the ListBuilder company.
* Ezine/Solo Ads - Ezines, or electronic magazines, provide a mechanism to send your ad, or devote an entire issue to your offer. A solo ad can sometimes generate over one thousand leads from a single blast to the list. The advantage of this method, is that the list is pre-qualified and receptive to your offer, if carefully chosen.
* Forum Marketing - Many high-profile marketing forums exist on the Internet, such as Mike Dillard's Better Networker, the Warrior Forum, freelancemom.com/forum and others. High quality content can be published in these forums including your signature file.
* Content/Article Marketing - There are hundreds of online article directories that will accept short articles from 300 to 1,000 words. At the end of your article, two back-links are normally permissable, allowing you to "promote" your offering(s). Submitting duplicate content can be minimized and the submission process automated using tools such as Automatic Article Submitter.
The Internet offers a rich environment for the professional marketer, and has many excellent tools to automate the process. When getting started, it is recommended starting with one method and perfecting that before moving on to additional methods.
* Facebook/MySpace/LinkedIn - The largest social media sites are excellent, representing millions of possible free leads for your business. The most amazing feature offered by these sites are availability of profiles of people worldwide who need your product or services. The new Advanced Search functionality on Facebook, as well as MySpace's more all-embracing search capabilities can quickly locate affinity groups, geographic proximity, age, and other demographics to quickly find prospects most likely to be your prospects.
* Video Marketing - Videos on YouTube can be one of the quickest ways to develop viral content. Video marketing not only can be used to publish your informational content to hundreds of highly-ranked sites, but also creates backlinks to your primary website or blog.
* PayPerClick Marketing - This is a paid strategy using Google, Yahoo, and Bing paid ads. We recommend this method only after some training, since it can be very expensive. It can also be the quickest way to generate business leads.
* Blogging - Self-hosted Wordpress.org blogs are a core part of the personal branding strategy for many people. Blogs are among the easiest sites to rank quickly. It is simple to setup a Wordpress blog with most hosting companies, but we recommend you choose one that uses CPanel (very common) and then find one of several tutorials available on YouTube for step-by-step instructions.
* ListBuilders - This is a paid strategy in which you can simultaneously create a personal subscriber list while having the "right" to periodically send your ads to a larger community owned by the ListBuilder company.
* Ezine/Solo Ads - Ezines, or electronic magazines, provide a mechanism to send your ad, or devote an entire issue to your offer. A solo ad can sometimes generate over one thousand leads from a single blast to the list. The advantage of this method, is that the list is pre-qualified and receptive to your offer, if carefully chosen.
* Forum Marketing - Many high-profile marketing forums exist on the Internet, such as Mike Dillard's Better Networker, the Warrior Forum, freelancemom.com/forum and others. High quality content can be published in these forums including your signature file.
* Content/Article Marketing - There are hundreds of online article directories that will accept short articles from 300 to 1,000 words. At the end of your article, two back-links are normally permissable, allowing you to "promote" your offering(s). Submitting duplicate content can be minimized and the submission process automated using tools such as Automatic Article Submitter.
The Internet offers a rich environment for the professional marketer, and has many excellent tools to automate the process. When getting started, it is recommended starting with one method and perfecting that before moving on to additional methods.
Tuesday, September 7, 2010
Direct Marketing
A great number has been said about direct marketing. Both advantages and disadvantages of this kind of marketing are laid out in several books or references so that people are educated. Regardless of what books or references say, one thing is very clear. Direct marketing is here to stay.
So what is the fuss all about with this kind of marketing? A lot of people already knew that this kind of strategy has existed for many years. Looking closely at its history one must fathom that this already exists for a very long time. With the prolonged existence of this kind of strategy, it serves as a testament of its success.
One of the benefits of using this kind of technique is that it can be measured statistically. Success rate can easily be quantified and that is a big help to gauge things and can aid in decision making. With this kind of data available, it would be easy to forecast and plot the next strategy so that marketing objectives will be achieved.
There are a lot of channels that this strategy could work. Direct mail, telemarketing, electronic mail and couponing are some of the channels that this strategy is being implemented. With direct mail marketing, letters are sent out via postal service to promote and do business. For telemarketing, either outbound or inbound calls are done as long as a product or services are being transacted. While for electronic mail or email as widely known, it is where the internet is used rather than the regular postal service. Couponing use coupons to advertise or promote products and service.
Of all the channels mentioned, a lot of marketers would say that email is the easiest and the most cost effective way to do. Email for one is very cheap to make. A lot of people uses email or have email access and that population of email users is too tempting to resist. The use of email is easy because with the technology nowadays almost everything is user friendly.
The only drawback that perhaps you can think of using email for marketing is the proliferation of spam emails. Spam emails are also known as junk mails which mean that these emails are being sent to many people with the same content. People are tired and weary of these kinds of mails and so most of the time they just delete it directly or put it to folders tagged as spam mails and not read it. This strategy is somewhat ineffective and only a low success rate would result on this strategy. To solve this problem, one must make an email that is personalized so that it won't be tagged as spam mail. With this solution, the recipient will be more likely to have interest and read the email.
With all the things mentioned, it is likely to solidify the statement that direct marketing will be here for a long while. It is true that it is no longer the way it was used to be because of several channel emerged due to advancement of technology but it is still the same marketing concept.
So what is the fuss all about with this kind of marketing? A lot of people already knew that this kind of strategy has existed for many years. Looking closely at its history one must fathom that this already exists for a very long time. With the prolonged existence of this kind of strategy, it serves as a testament of its success.
One of the benefits of using this kind of technique is that it can be measured statistically. Success rate can easily be quantified and that is a big help to gauge things and can aid in decision making. With this kind of data available, it would be easy to forecast and plot the next strategy so that marketing objectives will be achieved.
There are a lot of channels that this strategy could work. Direct mail, telemarketing, electronic mail and couponing are some of the channels that this strategy is being implemented. With direct mail marketing, letters are sent out via postal service to promote and do business. For telemarketing, either outbound or inbound calls are done as long as a product or services are being transacted. While for electronic mail or email as widely known, it is where the internet is used rather than the regular postal service. Couponing use coupons to advertise or promote products and service.
Of all the channels mentioned, a lot of marketers would say that email is the easiest and the most cost effective way to do. Email for one is very cheap to make. A lot of people uses email or have email access and that population of email users is too tempting to resist. The use of email is easy because with the technology nowadays almost everything is user friendly.
The only drawback that perhaps you can think of using email for marketing is the proliferation of spam emails. Spam emails are also known as junk mails which mean that these emails are being sent to many people with the same content. People are tired and weary of these kinds of mails and so most of the time they just delete it directly or put it to folders tagged as spam mails and not read it. This strategy is somewhat ineffective and only a low success rate would result on this strategy. To solve this problem, one must make an email that is personalized so that it won't be tagged as spam mail. With this solution, the recipient will be more likely to have interest and read the email.
With all the things mentioned, it is likely to solidify the statement that direct marketing will be here for a long while. It is true that it is no longer the way it was used to be because of several channel emerged due to advancement of technology but it is still the same marketing concept.
Friday, September 3, 2010
Direct Mail Vs Email Marketing Strategies
Email marketing strategies are more economical than their traditional direct mail counterparts. However, do they really deliver the desired results or is there still room for the old form of advertisement to prosper?
Direct Mail Strategies: Pros and Cons
Direct mail campaigns are commonly referred to as 'junk mail', although almost everyone prefers them to the more aggressive 'spam mails.' These types of campaigns provide unlimited creative opportunities as there is no limit on the size of the content or the quantity. One can truly feel free to go into details in terms of describing products and services, add emotional and commercial dimensions to it and even present a picture that will compel the reader to read on.
This form of marketing typical provides a 2% standard response rate on the first mail and a staggering 35% on the follow up mail. Depending on your product and target market, this strategy may not be a cost effective marketing strategy due to the costs of paper, printing, and postage.
The effectiveness of these types of campaigns varies substantially by demographic. Younger demographics continue to be more and more attached to electronic media.
Email Marketing Strategies: Pros and Cons
Email Marketing strategies are a far cheaper alternative to direct mail services. With email campaigns comes the option of reaching out to a larger group of prospective clients at blazing fast speeds and at very low costs. Another added advantage is that the administrator can actually trace the response of the email receiver based on what he/she does after opening the mail.
The standard response rate is very high for email marketing, ranging from 40% to 60%. The only disadvantage with this form of marketing is that it limits creativity, since there is only so much one can convey through an email.
Direct Mail Strategies: Pros and Cons
Direct mail campaigns are commonly referred to as 'junk mail', although almost everyone prefers them to the more aggressive 'spam mails.' These types of campaigns provide unlimited creative opportunities as there is no limit on the size of the content or the quantity. One can truly feel free to go into details in terms of describing products and services, add emotional and commercial dimensions to it and even present a picture that will compel the reader to read on.
This form of marketing typical provides a 2% standard response rate on the first mail and a staggering 35% on the follow up mail. Depending on your product and target market, this strategy may not be a cost effective marketing strategy due to the costs of paper, printing, and postage.
The effectiveness of these types of campaigns varies substantially by demographic. Younger demographics continue to be more and more attached to electronic media.
Email Marketing Strategies: Pros and Cons
Email Marketing strategies are a far cheaper alternative to direct mail services. With email campaigns comes the option of reaching out to a larger group of prospective clients at blazing fast speeds and at very low costs. Another added advantage is that the administrator can actually trace the response of the email receiver based on what he/she does after opening the mail.
The standard response rate is very high for email marketing, ranging from 40% to 60%. The only disadvantage with this form of marketing is that it limits creativity, since there is only so much one can convey through an email.
Wednesday, September 1, 2010
Recession Marketing - 9 Survival and Growth Strategies
Businesses and consumers are cutting back on discretionary spending, which could mean lower response rates for you. On top of that, many marketing budgets are being cut. This combination has sent many marketers into a panic. That's why you need to reevaluate your marketing game plan for this recession. Here I'll reveal the specific actions you can take to survive this economic downturn and be more successful in 2009.
Having helped clients through 5 recessions, I've seen firsthand what works and what doesn't.
To everything there is a season
First, it is important to know that recession is a normal part of the business cycle. The U.S. economy will come through a downturn or recession and then enter a new period of growth. But the hard truth is most recessions last about 16 to 18 months. This current one began in December 2007, but will probably last into 2010. And with the government scrambling to implement dramatic economic policies that will likely cause more harm than good, some economists project that we won't see the end until mid-2011. Whatever the length, you can increase cash flow and profits now...and secure a major advantage over your competitors. You can also expand your market share in the next few years.
Anticipating economic reality: Knowing the 4 economic trends
Before we look at the 9 recession marketing strategies that you will need to survive and thrive in this recession, every marketer should be aware of 4 basic economic trends that will affect your campaigns.
1. Deflation
A downturn in the economic cycle reflecting declining prices and a credit contraction. Our current historic deflation was predicted by a number of economists and investment advisors over the past few years. It's not a recession, but an economic crisis of inflation accompanied by a recession.
2. Inflation
A rise in the general level of prices of goods and services over time caused by high rates of growth in the money supply. Inflation can be thought of as a decrease in the value of the unit of currency. It is measured as the rate of change of a price index. Because of the massive government bailouts and deficit spending, this will be your marketing enemy in a few years. Under the Carter administration, inflation shot up over 12%. UnderGeorge W. Bush , it was up to 6% by November. Now it's dipped back to about 3.4% because of deflationary pressure. Expect to see inflation rise at the start of next year.
3. Recession
A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two nonsecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP). Unemployment is still lower than it was underJimmy Carter .
4. Stagflation
A condition of slow economic growth and relatively high unemployment. It is a time of economic stagnation accompanied by a rise in prices, or inflation. This could be what we are headed for, lasting for 5 to 10 years.
By anticipating and understanding these economic realities, you can better adjust your marketing message and strategy. The key is to approach your challenges strategically and tactically-rather than act out of emotion and fear. When the late Sam Walton, founder of Wal-Mart, was asked what he was going to do about the recession years ago, he answered: "We don't plan to participate."
Lessons learned from the past 5 recessions
One of my favorite recession research studies gives us some strategic guidance for you.
McGraw-Hill Research published a study of 600 companies in 16 industries over a 5-year period that included a recession. Researchers concluded that firms that chose to maintain or increase their marketing budgets experienced sales growth that was 256% higher than those companies whose advertising suffered. Furthermore, those who cut back on their advertising realized a small increase of only 19% in that same time period.
Here is another lesson learned from the last recession: The 25% of companies that increased their marketing budgets saw an increase in market share that was 2.5 times greater than competitors who cut back. But that's not all you need to know. Here's what I've learned from past recessions...
Now let's look at the 9 survival strategies you should implement now.
Strategy #1: Re-examine your current marketing initiatives
Image advertising is a waste of your time and money, especially in a time like this. If you're not using advertising that provides a measurable, quantifiable cost per lead, cost-per-sale and lifetime value of a customer, you're practically throwing your money away.
You absolutely must know your:
Strategy #2: Review your Unique Selling Proposition (USP)
A powerful USP will grab prospects' attention, distinguish you from competitors and draw them into your story. Now is the time to review and revise your USP. If it doesn't tell your prospects how they will benefit from your product in today's downturn and distinguish you from the competition...chances are you'll become irrelevant. Your USP needs to be prominent, easily found and up-todate in all of your marketing-TV, direct mail, website, you name it.
Tip: Before sending out your next campaign, take the time to review and revise your USP. Then place it at the beginning, middle and end of every marketing piece you create.
Strategy #3: Address marketing evils with preemptive copy
Marketing evils are the barriers that stand between your customer and their decision to buy from you. They create skepticism toward your product. Today's marketing evils include:
Well-executed copy for this recession will achieve the following 4 goals:
Addressing these evils and explaining why your product overcomes them will boost your response. Likewise, ignoring these evils will depress your response.
Strategy #4: Take advantage of dropping marketing costs
Media spending is plummeting and we haven't hit the bottom yet. As a result, online and offline media costs are dropping-and, in some cases, this trend is likely to be long-term or permanent. Here's where I've successfully helped marketers with cost-cutting negotiations:
Wall Street Journal are selling ad space right on the front page.
Strategy #5: Reevaluate your offer and make it preemptive
In this recession, consumers are hunting for the best way to get more for their money. It's critical to update your value proposition so that it's powerful and preemptive: It should answer prospects' questions before they ask them and overcome their objections. Remember, your offer is not about the product-it's about the prospect and what the prospect gets. The strongest offers reinforce value. They focus on the deal that the prospect will receive and present a get-morefor-your-money image.
Here are 3 components of a successful offer:
Strategy #6: Concentrate on your database
For most marketers, 20% of your customers represent 80% of your profits. Any significant loss of this core group could mean a serious hit to your sales, profits and future. Remember, it is always three to four times cheaper to upsell or crosssell an existing customer than to acquire a new one.
That's why you should implement these customer-retention strategies:
Static corporate home pages do nothing to encourage sales or improve your results. Yet so many marketers still rely on these non-marketing or anti-marketing sites. Instead, turn to direct marketing microsites and landing pages: Individual websites geared toward specific products and promotions. These sites use only direct response copy and art to sell a product or service. To improve efficiency and boost response, they don't have navigation distractions. For example, you may want to create unique pages to capture leads and sales, or develop a product-specific sales page.
Strategy #8: Streamline your shopping cart to boost sales
It's a fact: 7-1/2 out of 10 online prospects will abandon their shopping cart before completing a purchase. Here are 2 big mistakes to avoid...
Mistake #1-"Tombstone" carts. This is what I call shopping carts without sales copy. They're a dead-end. Your cart should engage prospects, reassure them that they are making a good decision and lead them right to the "Buy Now" button. It must have direct response sales copy and direct response art.
Mistake #2-Multistage process. The more you ask your prospect to click, the more sales you'll lose. A one- to two-page seamless checkout process is more effective and efficient than a multistage process. Prospects will be less likely to have second thoughts and click away. Above all, keep it simple.
Strategy #9: Reevaluate your media
Be sure to put your recession appropriate USP to work in all campaigns-including online and broadcast media.
Consumers may start to give up trips to the coffee shop in favor of a do-it-yourself espresso machine. Businesses may choose new software instead of new hardware, or invest in extra tech support to avoid an
expensivetechnology meltdown. With these strategies, you can turn this recession into an opportunity for growth, profits and greater market share.
Having helped clients through 5 recessions, I've seen firsthand what works and what doesn't.
To everything there is a season
First, it is important to know that recession is a normal part of the business cycle. The U.S. economy will come through a downturn or recession and then enter a new period of growth. But the hard truth is most recessions last about 16 to 18 months. This current one began in December 2007, but will probably last into 2010. And with the government scrambling to implement dramatic economic policies that will likely cause more harm than good, some economists project that we won't see the end until mid-2011. Whatever the length, you can increase cash flow and profits now...and secure a major advantage over your competitors. You can also expand your market share in the next few years.
Anticipating economic reality: Knowing the 4 economic trends
Before we look at the 9 recession marketing strategies that you will need to survive and thrive in this recession, every marketer should be aware of 4 basic economic trends that will affect your campaigns.
1. Deflation
A downturn in the economic cycle reflecting declining prices and a credit contraction. Our current historic deflation was predicted by a number of economists and investment advisors over the past few years. It's not a recession, but an economic crisis of inflation accompanied by a recession.
2. Inflation
A rise in the general level of prices of goods and services over time caused by high rates of growth in the money supply. Inflation can be thought of as a decrease in the value of the unit of currency. It is measured as the rate of change of a price index. Because of the massive government bailouts and deficit spending, this will be your marketing enemy in a few years. Under the Carter administration, inflation shot up over 12%. Under
3. Recession
A significant decline in activity spread across the economy, lasting longer than a few months. It is visible in industrial production, employment, real income and wholesale-retail trade. The technical indicator of a recession is two nonsecutive quarters of negative economic growth as measured by a country's gross domestic product (GDP). Unemployment is still lower than it was under
4. Stagflation
A condition of slow economic growth and relatively high unemployment. It is a time of economic stagnation accompanied by a rise in prices, or inflation. This could be what we are headed for, lasting for 5 to 10 years.
By anticipating and understanding these economic realities, you can better adjust your marketing message and strategy. The key is to approach your challenges strategically and tactically-rather than act out of emotion and fear. When the late Sam Walton, founder of Wal-Mart, was asked what he was going to do about the recession years ago, he answered: "We don't plan to participate."
Lessons learned from the past 5 recessions
One of my favorite recession research studies gives us some strategic guidance for you.
McGraw-Hill Research published a study of 600 companies in 16 industries over a 5-year period that included a recession. Researchers concluded that firms that chose to maintain or increase their marketing budgets experienced sales growth that was 256% higher than those companies whose advertising suffered. Furthermore, those who cut back on their advertising realized a small increase of only 19% in that same time period.
Here is another lesson learned from the last recession: The 25% of companies that increased their marketing budgets saw an increase in market share that was 2.5 times greater than competitors who cut back. But that's not all you need to know. Here's what I've learned from past recessions...
- Companies that don't adjust their marketing to the new economic environment suffer.
- Businesses that follow the direct marketing model trump those who rely on traditional advertising.
- Historically, companies maintaining or increasing their direct mail marketing through economic downturns increase sales and market share during and after the slow period.
- Businesses that regard direct response advertising costs as investments rather than expenses enjoy higher long term dividends.
- Companies that stay aggressive in a downturn seize market share from more timid competitors.
- Companies that cut back will lose revenue and opportunities, with fewer upsells and cross-sells for several years after the recession...profoundly impacting the bottom line in the long-term.
Now let's look at the 9 survival strategies you should implement now.
Strategy #1: Re-examine your current marketing initiatives
Image advertising is a waste of your time and money, especially in a time like this. If you're not using advertising that provides a measurable, quantifiable cost per lead, cost-per-sale and lifetime value of a customer, you're practically throwing your money away.
You absolutely must know your:
- Cost per lead
- Cost per sale
- Lifetime value (LTV) of a customer
Strategy #2: Review your Unique Selling Proposition (USP)
A powerful USP will grab prospects' attention, distinguish you from competitors and draw them into your story. Now is the time to review and revise your USP. If it doesn't tell your prospects how they will benefit from your product in today's downturn and distinguish you from the competition...chances are you'll become irrelevant. Your USP needs to be prominent, easily found and up-todate in all of your marketing-TV, direct mail, website, you name it.
Tip: Before sending out your next campaign, take the time to review and revise your USP. Then place it at the beginning, middle and end of every marketing piece you create.
Strategy #3: Address marketing evils with preemptive copy
Marketing evils are the barriers that stand between your customer and their decision to buy from you. They create skepticism toward your product. Today's marketing evils include:
- Economic crisis
- Recession
- Competition
- Legal and regulatory changes
- Budget cuts
- Unemployment
Well-executed copy for this recession will achieve the following 4 goals:
- Address and dismiss your prospects' objections.
- Demonstrate how your product solves their most pressing problems.
- Explain why your product is absolutely necessary-even in an economic downturn-and why it's in your prospect's best interest to buy now.
- Clearly demonstrate why an alternative choice is not going to cut it.
Addressing these evils and explaining why your product overcomes them will boost your response. Likewise, ignoring these evils will depress your response.
Strategy #4: Take advantage of dropping marketing costs
Media spending is plummeting and we haven't hit the bottom yet. As a result, online and offline media costs are dropping-and, in some cases, this trend is likely to be long-term or permanent. Here's where I've successfully helped marketers with cost-cutting negotiations:
- Printing
- Media costs
- Lists
- Postal discounts
- Media options
Strategy #5: Reevaluate your offer and make it preemptive
In this recession, consumers are hunting for the best way to get more for their money. It's critical to update your value proposition so that it's powerful and preemptive: It should answer prospects' questions before they ask them and overcome their objections. Remember, your offer is not about the product-it's about the prospect and what the prospect gets. The strongest offers reinforce value. They focus on the deal that the prospect will receive and present a get-morefor-your-money image.
Here are 3 components of a successful offer:
- A discount or price reduction. Right now people are looking for value, and a discount is the simplest way to deliver it. Just look at the most successful catalogs, emails and mailing pieces. You'll find discounts in every one, from consumer retailers like
J. Crew to B2B marketers like Thermo Fisher Scientific. Even designer makeup and beauty products are on sale, which is rare. - A premium. It's a gift, a bribe, a strong enticement: Add value by giving something away. This can help you justify a higher price if you are unable to offer a hefty discount.
- A guarantee. Reassure your prospects that they have nothing to lose. If you don't have a guarantee, now is the time to start one.
Strategy #6: Concentrate on your database
For most marketers, 20% of your customers represent 80% of your profits. Any significant loss of this core group could mean a serious hit to your sales, profits and future. Remember, it is always three to four times cheaper to upsell or crosssell an existing customer than to acquire a new one.
That's why you should implement these customer-retention strategies:
- Upselling and cross-selling. Reevaluate your current process. Are you being aggressive enough in offering products or services that complement your prospect's purchases?
- Loyalty programs. It is more important than ever to reward your best customers with extra perks to keep them coming back. Creating an exclusive club for loyal customers is also effective.
- Conversion series. If you offer a free trial, be sure you have a professional follow-up direct marketing conversion series in place to convert these prospects to buyers. Many marketers make the mistake of letting qualified, interested prospects slip away easily. See the chart above for an example of a conversion series time line.
- Retention series. Don't wait around for your customers to renew subscriptions, reorder products or come in for your services-remind them of your value, and reinforce their decision to purchase from you.
- Database lead management. If you don't convert those hard-earned leads to sales, you're wasting your marketing efforts.
- Reactivation campaigns. Use your improved, preemptive offer, complete with premiums and discounts, to entice former customers to come back. Craft copy that demonstrates why your product is the best choice right now.
Static corporate home pages do nothing to encourage sales or improve your results. Yet so many marketers still rely on these non-marketing or anti-marketing sites. Instead, turn to direct marketing microsites and landing pages: Individual websites geared toward specific products and promotions. These sites use only direct response copy and art to sell a product or service. To improve efficiency and boost response, they don't have navigation distractions. For example, you may want to create unique pages to capture leads and sales, or develop a product-specific sales page.
Strategy #8: Streamline your shopping cart to boost sales
It's a fact: 7-1/2 out of 10 online prospects will abandon their shopping cart before completing a purchase. Here are 2 big mistakes to avoid...
Mistake #1-"Tombstone" carts. This is what I call shopping carts without sales copy. They're a dead-end. Your cart should engage prospects, reassure them that they are making a good decision and lead them right to the "Buy Now" button. It must have direct response sales copy and direct response art.
Mistake #2-Multistage process. The more you ask your prospect to click, the more sales you'll lose. A one- to two-page seamless checkout process is more effective and efficient than a multistage process. Prospects will be less likely to have second thoughts and click away. Above all, keep it simple.
Strategy #9: Reevaluate your media
Be sure to put your recession appropriate USP to work in all campaigns-including online and broadcast media.
- Direct mail. You're still able to produce a low cost per lead or sale with this highly targeted medium...even in a recession. It should be a major component of any marketing mix.
- Paid search. Easy paid search is dead in this recession. But the right mix of keyword strategy, powerful direct response ads and separate, dedicated landing pages with timely content will produce a very high ROI-although the numbers will be a very small part of your overall lead generation and sales program.
- Email. The days of sending a sales letter via email are over. Sales hype will not work. Instead, use an information-driven, content-rich email. Remember value.
- TV and radio. Rates for prime airtime have been dropping, so now's your chance to renegotiate rates and retest your options, such as time of day.
Consumers may start to give up trips to the coffee shop in favor of a do-it-yourself espresso machine. Businesses may choose new software instead of new hardware, or invest in extra tech support to avoid an
expensive
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