Marketing and sales in a recession is no different than during good times. It’s just that most businesses act as if something really went bad during this recession and shoot themselves in the foot. But here’s a secret to grow your business even faster BECAUSE of the economy.It amazes me that most business owners actually start cutting back on the very thing that would catapult their business even in the worst of time
Here’s the secret, the marketing formula.
Scientific Marketing Formula
The leads you get each week are dependent upon two things, how many people get to see your marketing message times the conversion rate of that marketing formula.
So, let’s say that before the recession, you were sending your marketing out to 100 people a month, and 10% of those who saw your marketing responded by calling you. That should be about 10 people calling each and every month.
But here’s the problem. Most small businesses operate so near the breakeven point that from month to month they just barely pay the bills. Most aren’t sending their marketing to 100 people. Some barely touch 5 or 10, and even worse, fewer than 0.1% respond to their marketing. But we’ll come back to those issues, and a fix later. For now, let’s finish our toughts around marketing and sales in this recession.
As I said, most business actually operate very near break even. So what happens in a typical recession? About half as many people respond to any kind of marketing after the recession hits.
The result: If they were operating near break even before the recession, when the economy hits them, they lose half of the number of people they were reaching before the recession, and now are BELOW break even, watching their business SUCK money out of their pockets, or, at the very least, they aren’t making anything from their business.
Let’s go back to the marketing formula and how to get more from your marketing and sales in any recession, or any economy.
The marketing formula before the recession — touch 100 people, and get 10% response rate, resulting in 10 calls.
1,000 x 10% = 100 calls
But after the recession hits, they are still sending to 100 people, but now getting 5% response, or only 5 calls. They’ve lost about 1/2 of their customers, and 1/2 of their income. If they were at break even before, they aren’t now.
So what is the typical response? Cut expenses, usually marketing. OOPS! Going back to the marketing formula, doesn’t that just cut the total number of people calling you every month?
But what would have happened when your response rate dropped in half, if you had doubled your marketing efforts? Wouldn’t that be generating as many customers as before the recession, and as much revenue as before the recession?
Yet, why does every small business cut marketing when times get tough? They tell me it’s to “save money”.
If we send our marketing to 200, and get a 5% response rate, we still get 10 calls a month and the same income as before. In fact, once we GET IT, shouldn’t we consider increasing our marketing efforts even before the recession, and even more after the recession?
The result is more income. But most business owners look at marketing as something to avoid, costs to reduce.
There is ONLY ONE time when this won’t work. That’s when your “cost to acquire a client” is more than the profit you get from that client. Then what do you do?
NEVER EVER cut marketing, or reduce marketing, at least when it’s generating more than it costs. If it does cost more than it generates in sales, fix the marketing message. The marketing message is “what you say, how you say it, and who you say it to.” Say something that really grabs your prospect and he’ll buy from you. If the message doesn’t work, fix it. You can’t continue marketing in that case. But that’s the ONLY case.
In fact, if you intend to be a profitable business everything depends upon the two things in the marketing formula, getting the message out to enough people, and convincing enough people that they HAVE to HAVE what you sell. Your business depends on it.
Marketing and sales in a recession is no different than marketing and sales in good times. In fact, use the marketing formula to achieve the income you really want.
If you’d like to increase your marketing and sales results, I’ll work with you for the first half hour to find the answers you need to make your first $100K to $1M for no charge. Call 816-415-8878.
Alan Boyer, $100K Small Business Coach
Helping business owners reach $100K to $1M in months and to stop playing in the kiddie pool when attracting clients.