Marketing In A Down Economy
The economy is stale, the unemployment rate is improving at a crawl and consumers have reduced discretionary spending. A lot of small businesses are hurting and scrambling for new customers as there seems to be fewer and fewer each day. Some of these businesses have reduce their marketing budgets to comply with the times, but reducing marketing only guarantees that less customers will be aware of your product or service.
An even bigger problem and less commonly thought about problem is the type of marketing that small businesses are investing in. In an effort to model the success of larger companies, small businesses are spending large amounts of their marketing dollars trying to brand their company. The problem is building a brand is very expensive and the benefits of branding are usually delayed. When branding you are positioning yourself in the marketplace and the minds of the marketplace so when they need your product or service they think of you. Branding can be a great long term strategy but most small businesses spend a dollar today and need that dollar back tomorrow to pay the bills.
The good news is there is a type of marketing that brings a more immediate response and while nothing can be guaranteed direct response marketing is measurable and scalable.
Direct response marketing by definition “ is a type of marketing designed to generate an immediate response from consumers, where each consumer response (and purchase) can be measured, and attributed to individual advertisements.” This is powerful for a small business because every dollar is accounted for; direct response marketing takes the guessing out of what’s working and what’s not.
Today there are many different vehicles for direct response marketing. Direct mail is still an effective strategy for most businesses if done correctly, however internet marketing has made direct response that much more immediate and affordable. Google Adwords is one of the pioneers of the direct response internet marketing vehicles. Google Adwords allows you to market to your customer at the moment they are looking for you. Everything can be measured and tracked down to what keywords created conversions. Unlike buying a $10,000 billboard and hoping for the best, with Adwords, you control your budget , who sees your ads, and how much you bid.
This type of marketing is measurable and mathematical. To be really successful you have to know your business metrics very well. A business needs to know the average value of a customer, lifetime value of a customer, conversions rate, cost per conversions etc… A lot of business are familiar with what these terms mean but have no idea what their numbers are exactly. “How many phone calls do you need to receive before you get a new customer? These types of questions and considerations are critical as they help you determine how much money you can spend to acquire a new customer. It also allows you to understand what is really the most effective media long term.
The best thing a business can do to be successful with this type of marketing is to take inventory of current customers and start to track as much as possible. Once you have a baseline, it’s time to take action and get some new customers in the door. Every business wants the situation where they spend $1 and get $2 back, but for this to be possible you have to track and measure your numbers so you can recognize that opportunity. Direct response marketing vehicles like Adwords are a great option for most businesses and can really help a small business when the marketing dollars are tight or the economy is slow.
If you need any assistance with setting up an Adwords campaign or other online marketing opportunities feel free to contact us by phone or by completing a form.