Tag Archives: recession marketing

Stop Saving Your Business And Start Building It

Vince Lombardi

Vince Lombardi

This week’s blog entry is a pep talk to all those business owners who are hesitant to invest in growing their businesses.

Flat sales are considered the new up.   You’ve made many cuts and are hesitant to make any more.  You may have experienced layoffs.  You wonder what else is next.

Guess what?  You are not alone.  Your competitors are facing the same uncertainties.

The reality is if you have survived this long, you’ve run a good business.

You probably think your conservative nature has helped you make it to this point. That may be true, but it’s time to make a change.

People are spending money.  They still need products and services, and they are going to buy from companies in which they are aware.

This requires spending money on marketing, product innovation, introducing new services.  As I have mentioned in the past – give people a reason to do business with you instead of your competitor.

By doing this, you are letting people know you are open for business.

–   Email current customers with a loyalty discount offer. (If you sell a product, a subject line of “Free Shipping” increased click-thrus 60.7% versus other subject lines, according to an Internet Retailer study.)

–   Call customers to reconnect with them.

–   If your staff needs work, offer discounted audits or analyses.  Chances are you’ll find something your customers need help with.

Here are 15 companies that started and succeeded during a recession:

  • GE
  • HP
  • Microsoft
  • Federal Express
  • Clif Bar
  • Method
  • Hyatt
  • Burger King
  • iHop
  • Jim Henson
  • Lexis/Nexis
  • CNN
  • MTV
  • Trader Joes
  • Sports Illustrated

Enough with the pep talk.

Stop saving your business and start building it again.

Advertisements

Leave a comment

Filed under recession marketing

Recession Continues To Breed New Thinking

Toys R UsIn today’s Wall Street Journal, Toys R Us announced they are opening 350 temporary stores in traditional shopping malls and other locations to take advantage of the holiday season.   This strategy is borne out of two market changes:

  • KB Toys, traditionally a mall-only toy retailer, going out of business
  • Sears expanding their toy department to help grab share from the KB Toys deficit

Holiday sales were down 3.4% last year for Toys R Us. Anticipating similar results for the 2009 holiday season, the national toy retailer realized they could not rely on the same approach to reach customers and drive sales.

Toys R Us is leveraging three key areas:

  • Inexpensive rents – With retail sales down and retailers going out of business, there is excess capacity in shopping malls.
  • Lower pricing – Higher rents were baked into KB Toys’ pricing (so much that they weren’t competitive). Since rents are lower, TRU can keep pricing on par with freestanding stores.
  • Convenience – The convenience of a mall location should attract people who are already shopping versus having to go to another location.

Toys R Us stopped looking at their business the same way.

You should to and see where opportunities might exist to change how you do business.  There has never been a better time to do it.

2 Comments

Filed under recession marketing

How Credit Unions Can Benefit Your Bottom Line

recession-proof-business-300x300Does your company belong to a credit union?

Even with most credit unions moving to community charters where virtually anyone can join one, there remains additional value by being a member company.

  1. Becoming a member company costs your company nothing
  2. Your employees get access to loan rates that are typically lower than what banks offer, while savings rates are typically higher
  3. Credit unions tend to be more stable than banks
  4. They provide the customer service of a community bank
  5. They typically have all of the services of a national bank
  6. They are a terrific marketing opportunity for your company

A terrific marketing opportunity for your company?

It’s quite simple.  Credit unions tend to have very loyal members.  Members who have “gulped the credit union kool-aid” are evangelists for their credit union.  This halo covers the member companies as well.

The opportunity exists for you to reach out to your credit union business development contact and tell them you would like to market your services to the other credit union members or member companies.

Tell them you want to provide credit union members a special member offer or discount which can be marketed through their emails, on their website and/or newsletter.

The cost of this marketing is minimal, if it costs anything at all, and it gives you access to thousands of people you may not have reached before.

You both win when you gain access to potential new customers.

If you are already a credit union member company, you are halfway there. If not, find one who can best service your needs.  To find credit unions in your area check out the NCUA.

1 Comment

Filed under recession marketing

Reduce Customer Credit Card Usage. Increase Loyalty.

Reduce Credit Card UsageCredit card usage is a key component in creating customer loyalty, from earning frequent flyer miles to rewards points.  In today’s economy can you increase loyalty by encouraging your customers to use their cards less?

A few weeks ago I wrote about the importance of keeping pricing consistent and instead adding value.  This is important because cutting your pricing may impact your ability to recoup a higher margin for an extended period of time.

But in today’s economy, the pressure facing companies to provide discounts on their products and services is strong.

So what can you do to encourage consumers to purchase your product, remain loyal to your brand and keep your price consistent?

Change your model – by giving your customers the incentive to pay another way.

The average company pays between 1.5% and 5% in credit card service charges. If you have $5,000,000 in revenue and are paying 3.5% in service charges, up to $175,000 of your bottom line could be going to the credit card companies.

While you may consider this a cost of doing business, what if you encouraged your customers to pay by cash, check or bill pay by putting 2.5% of their bill (based on the 3.5% noted above) into a loyalty account for them to use towards future purchases?  You would still come out ahead by $50,000.

Such a program provides many consumer benefits:

  • Reduces their cost on future services
  • Does not increase credit card debt (according to IndexCreditCard.com the average consumer household is carrying a $10,640 balance on their credit cards)
  • Saves money by not having to pay interest on credit card purchases
  • Provides value for products and services they already use

Your company benefits as well:

  • Reduces transaction costs (thus benefitting the bottom line)
  • Increases customer loyalty
  • Provides unique point of difference

A recession is great time to change how you do business without changing your business.

1 Comment

Filed under Customer Marketing, Marketing ROI, recession marketing

Are You Telling Your Customers You Are Closed For Business?

Closed For BusinessA recent Ad-ology study noted that 48% of U.S. adults think a lack of advertising by a bank, retail store or auto dealer during a recession is a sign that they are struggling and thus make them less likely to do business with them.

Conversely, a vast majority perceives businesses that continue to advertise as being competitive or committed to doing business.

What message are you sending your customers?

Leave a comment

Filed under recession marketing

Don’t Wait For Consumers To Start Spending Money Again

Fast CompanyIn the June issue of Fast Company, Sean Maloney, Intel’s chief sales and marketing officer, is quoted saying that their job “is to give [the audience] something so wonderful that they’ll spend money again.”

This is a great philosophy for any business for any time, but especially in a recession.  Instead of waiting for customers to buy your product, what reason are you giving your audience to want to buy your product?

Hyundai is a great example of creating demand.  Earlier this year, to encourage people to spend money on their cars, Hyundai launched the Assurance program.  This is a program that states if you lose your job within the 12 months after you purchase your car, Hyundai will take it back without damaging your credit.

Many car companies copied that program, so Hyundai recently upped the ante.  Now in addition to the Assurance program, Hyundai is giving $650 a month for six months to people who buy their CUVs.   And if they lose their job they can return the car and keep the money.  To people on the fence about buying a new car, that qualifies as “something so wonderful”.

Apple is another great example at a lower price point.  Look at its iPhone apps.  Does anyone really need an application called Pee Monkey? (Yes, there is such an app.)  Probably not, but people are defining “wonderful” in record numbers helped by the low price point.

So what can you do to your product or service to make it irresistible?

  • Could you improve the warranty that goes along with your service making it risk-free?
  • Could you provide add-on services to make the offer enticing?
  • Can you find a way for your product to save people money?
  • How does your product make people’s lives easier, better, etc.?

Sometimes creating this “wonderful” simply requires educating your audience on all things your product can do.

This week take a look at your products and services and determine how to make your product or service so “wonderful that [people] will start spending money again.”

Please share what you come up with to make your product wonderful.

2 Comments

Filed under recession marketing

Your Audience Has Changed, Have You?

The Economist published an article discussing the impact the recession will have on people’s purchasing habits.

Typically we, as consumers, have short memories and as soon as things improve we go back to our free-spending ways. This time however, the article goes on to discuss, that this recession will have a longer lasting effect.

We can already see this in gas consumption as usage remains down even though the $2 average cost per gallon is 50% less than it was a year ago.

People are eating at home more.

People are saving more – in fact the saving rate in January ’09 reached a 15 year high of 5% compared to .1% the year prior.

Since the audience is adapting to this new economic reality, how have you adapted your message, pricing strategy, and brand to best meet the needs of the market?

Notice I use the word adapted and not changed.

I also hesitate to use the words discounting or rebates as they can negatively impact your brand long-term and your audience’s buying habits.  Just look at the big retailers at Christmas time – everyone waits for the big sale because they know it is coming and being known solely for discounts can devastate profits as well as your brand value.

Adapting your brand allows you to highlight how you are meeting today’s needs in a responsible and helpful manner.

For example:

  • Highlight the things that make your product unique and/or superior to the competition
  • Talk with your audience about the value your products or services provide
  • Help your audience save money in the short-term and over the long-haul
  • Reward them for their loyalty
  • Thank them for being a referral source
  • Discuss how you have been adding value to their lives for years

Target has done a nice job of this adaptation with their “redefining” campaign promoting the new movie night, the new girl’s night out, etc. while touting what makes Target unique – an inexpensive way to remain stylish.

The key is not taking things for granted or assuming things will return to normal.  That may have been the case in past recessions, but the severity of this one is predicted to make a significant change in people’s habits.

It’s your job to make sure your brand knows how to adapt.

1 Comment

Filed under recession marketing