Surviving the Downturn: Strategies Part 2

In my last post, we looked at re-tooling the “price” – P  in the marketing mix.   This week I’d like to hone in a bit on the “promotion” -P.

We all know that marketing expenditures are shifting from traditional branding efforts and media to more direct ROI methods and “customer nurturing” or social media.  With budgets shrinking marketers are faced with having to do MORE with LESS.  So, what are some of the savvy marketers doing?   

Well that depends on what industry you are in, and whether you are a B-to-B or B-to-C marketer.  But, one strategy that many marketers have embraced is to focus more on RETAINING customers rather than acquiring new customers.  I’m not saying they are abandoning their new biz efforts, but SHIFTING more of the marketing budget towards retention.

If you think about the old 80/20 rule (in the B-to-B world), where 80 percent of your business comes from 20% of your customers, then it really makes sense regardless of the economic climate to keep those customers loyal to your brand.  Many companies are stepping up their efforts to identify and nurture the decision makers and influencers in their top 20%.  It’s not enough to just focus on one or two individuals in an account, but rather anyone who has an experience with your product or service.

Another main reason is the obvious –it simply costs much less to maintain a customer than to acquire a new one.  So, in a downturn when budgets are scarce, it makes sense to change your main focus to maintaining your market share vs. growing it.  Some of the tactics being deployed are:

               Loyalty programs:  Companies that have them are enhancing and promoting them more.   Companies that don’t have a loyalty program are creating them.  One strategy that is also growing is  the “brand ambassador” program.  The brand ambassador program can be implemented with various media —direct mail, email, inserts, collateral material, social media, and by word-of-mouth.  It’s simplest form is the “referral program” where your friend gets xx and you get xx for referring them.  A few more expensive to implement, but bring in a positive ROI are the following social media tactics:

           Tap into customers’ enthusiasm with online ratings and reviews.  Many marketers have seen an explosion of new sales just because they implemented this feature in their website.  One company, eBags expects to yield over $400,000 in profit from a $200,000 investment in one year!

          Create a community to energize your customers.  This works best if your customers have a passion for your product/service and have an affinity for each other –especially in a B-to-B environment.   Constant Contact- an email service provider for small business owners is experiencing an incredible snowball effect from this effort —13000 participants -10% from it’s customer base, with 30% of the community providing referrals. That equates to an 82% growth rate for the company! 

More to come..have a great day!    Brian.

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Explosive revenue growth at little or no cost –is it possible?

In today’s tough economy there are still ways for creative marketers to achieve remarkable results without having to make a major investment —here are two examples:                               

1)  Social media – YouTube:  Blendtec, a manufacturer of high-end blending machines is one of several great examples of how this medium can yield incredible results –in fact it achieved over a 20% growth in revenue from a $ 300 investment!!!  The skinny is this– the new marketing director was amazed at how the blender could grind up wood in the testing center and thought it would be great to show the world a demo of it’s power.  With that, he thought of putting “extreme blending” videos on the web.  Initially they put the videos up on their website and linked with Digg.  Then on to YouTube.  Then the explosion took place– 6 million views in the first week!  Soon fans on YouTube were suggesting things to grind up –such as the iPhone …and Blendtec obliged.  The result: over 60 million views plus appearances on The Tonight Show and The Late Show with Jay Leno.

2) Partnerships.  Here’s where you really need to think out of-the-box.  Customers, suppliers, other organizations in your industry, etc. all have their own market reach that could be tapped with little or no cost.  Here’s an example…

The marketing director of a large magazine approached one of their retail advertisers with this promotional concept:  promote a sweepstakes contest that would drive the consumer to the magazines’ website to register for a free e-newsletter and to enter into the sweeps contest.  The advertiser agreed and paid for the floor banners that were place in the isles of their retail stores.  The publisher gave the advertiser exclusive sponsorship and appropriate online exposure.  The results:  Several thousand folks signed up for the free e-newsletter that has become a revenue generator for the publisher.  The retail advertiser increased it’s brand awareness.  The revenue generated from this campaign was not divulged, but regardless the cost to the publisher was ZERO since the web work was produced in-house.

Do you have any such stories?  Have a great day!

Brian

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A few primers before your business dives into the Web 2.0 World

If you’re like me, when you first started hearing about social media (web 2.0) you probably thought it was just a passing fad or something that you didn’t need to deal with.   Well, the fact is that it is by far the fastest growing media right now — (I know, most of you bloggers out there already know this, but hey –give me a little slack here–I’m catching on very quickly). 

I want to give a little plug for an amazing book I’m reading called “The Groundswell” by Charlene Li and Josh Bernoff.  For anyone who is serious about understanding the business implications and the correct way to approach the Web 2.0 opportunity, this book is a MUST READ.

For those of you who rather not read it, but just want the topline, here goes:

1.  Know your objectives before you DO ANTHING.  That’s right. Don’t just set up a website, Twitter, Blog, etc. without clear objectives of what you want to accomplish.  Why?  Because you can waste big bucks and time executing the wrong tactics.

2. Research your customers/prospects and their “social media behavior”.  According to Messgrs Li and Bernoff, you need to identify and dissect the different groups of people and adjust your strategies accordingly.  For example, there are 6 categories that make up their Social Technographic profile: Creators- who publish content, Critics -who react to online content, Collectors –who tag and organize content, Joiners –who maintain Facebook pages, Spectators- who consume what the rest produce, and Inactives -they go online but they are not into social media.

3. Find an agency partner who has a proven track record in producing successful and measurable campaigns and that can grow with you as your communities take off.  Also make sure they begin with your objectives in mind and a clear understanding of what constitutes a successful campaign.

4.  Make sure upper management is involved.  Whatever progams you implement will be a  major change on how your organization communicates with your customers.  Implemented correctly, it can reap big rewards.  A wrong turn, can be devastating.

Cheers!

Brian

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