Have you geared your marketing budget to an upturn?
After a couple of years of rather dismal news about the economy, there seems to be some hope in the horizon. B2B companies are increasing their marketing spending in 2011 according to a recent Forrester study, relayed by MarketingProfs.
Now that even your worst competitor is adapting its marketing budget to an upturn you should make sure you’re not going to get trampled when everyone is clawing for a rapid increase in revenue.
But how? In the aftermath of the downturn, you probably find yourself having to work with a cut-down budget, and it’s not at all certain you have as many staff as you’d need.
The good news is that you CAN increase your marketing presence where it is most needed, even with the reduced resources you have at your disposal.
Running your business frugally will be a good idea even in good times. If it helped you ride out the downturn, think how it will increase your profits in better times. It doesn’t mean constant cost-cutting or skimping on what is important and necessary, it means paying close attention to costs and return on investment—a sound policy for any business at any time. Many of your competitors will fall into the trap of lavish spending and sloppy ROI monitoring in good times.
First priority: hang on to your market share
Looking at your statistics, what happened to your market share in the past couple of years? If you maintained your share, congratulations. That will be an excellent springboard for the future. If you lost market share, you have more work to do—but it’s not the end of the world.
Either way, now is the time to maximise the outcome of a minimal marketing investment to stay competitive.
Maintain Share-of-Voice and you’ll maintain Share-of-Market
Share-of-Voice (SOV) means your share of the visibility in the market you compete in. In other words, the multitude and magnitude of your marketing messages in relation to the entire marketing/advertising cake in your business. Where it really becomes interesting is that keeping your SOV above your Share-of-Market (SOM) will in the end result in growing market share. The Nielsen Company has published a study on this.
Focus on immediate sales
A brand is not something you “create”. It’s something that emerges from everything you do around your brand. Product or service relevance, customer support, failures and successes, the general perception of the relation between your offering and users that ensues.
That’s why ensuring an excellent end-user experience will help create your brand. In other words, aiming at immediate sales and satisfied customers go a long way in building the brand. Why waste your resources in brand building as a separate exercise when everything you do to get sales NOW will automatically contribute to the brand anyway?
Focus on existing customers
Chances are that your business follows the Pareto principle, also known as the 80/20 rule: 80 per cent of your business comes from 20 per cent of your customers. The opinions vary, but different sources say finding new customers is 3 to 10 times more difficult than selling to your existing customer base. Now that there is more willingness to buy in the market, pay attention to your loyal customers.
The recipe for success in the new climate of hope therefore includes at least these elements:
- Maintain your market share
- To maintain your market share, ensure sufficient Share-of-Voice
- Aim at immediate, short-term results for a start
- The easiest way to get short-term results is taking good care of your present customers
How is it in your business? Is your company matching its marketing budget to an upturn? What are you doing to improve your placing in the competition?