Marketing Survival Guide for Small Businesses During a Recession
“The reports of my death have been greatly exaggerated”
Some business owners feel that the reports of their upcoming business death is actually imminent.
Here’s a survival guide for small business owners. How to market and get as many clients as you want no matter what’s going on in the economy. The only reason businesses struggle in a recession is not the recession, but is only due to how they respond to the recession. Most are doing the wrong thing for fear that the recession will hurt them. It’s their actions that cause the pain, not the recession.
1) If what you’ve been doing is STILL not working, or never did, then you just can’t keep doing what you’ve been doing and expecting different results. It’s time to FIX or REPLACE. It’s that simple. Don’t wait for tomorrow expecting that over time it’ll be better. It won’t. Whatever your response is today will be the same tomorrow. Whatever your marketing message is it’ll still connect to just about the same number of people every time you use it. So, don’t expect anything to change. It’s time to fix or replace your marketing message.
2) Measure, manage, and optimize your marketing.
3) Know EXACTLY what it costs you to acquire a customer.
4) If the cost to acquire a client leaves you a nice profit, then logically ask, “How many clients do I want to buy” and crank it up. Buy as many as you can afford while watching your income skyrocket. Make sure that you always take some of the profits to feed your marketing and watch your business spin upward, not downward.
5) If the cost to acquire a client doesn’t work out on a one time purchase, can you still justify acquiring the client at this rate if you have an active plan to get that client to buy repeatedly for the next year? In other words, if it costs you $100 to acquire a client that’s worth $100 in profits for one time, then can you get that same client to buy monthly? Then you can make it work. If so, then we still may invest in buying more clients, but we’ll have to watch our pennies so that we’ll be able to keep investing. But, this might also mean that we should be looking at improving our cost to acquire the client.
6) If the cost to acquire a client won’t work out . . . then its time to FIX or REPLACE our marketing, or the cost of the products or services. My choice is to fix the marketing because of the leverage it provides, the multiplication effect of every dollar invested should be generating many times more dollars.
7) NEVER, NEVER, NEVER continue marketing without knowing what the measurable results of that marketing is, and what it costs you to acquire that client with each and every marketing campaign. If a marketing company tells you they can’t measure it, then change marketing companies. Or, at the very least, you’ll have to test market it to find out by sending out your marketing to a test sample while measuring the results you get.
For some forms of marketing that aren’t naturally “direct marketing” then we’ll have to turn it into direct marketing.
Direct marketing is when you send something directly to a group of potential prospects and can count them walking in the door.
There are some things, such as radio, TV, networking, word of mouth, etc that are frequently lost due to the tendency to just “turn them on” and not know where the customers are coming from when they walk in the door.
We can measure them by providing a coupon, or by asking them to tell you where they heard about you to get a special price. As long as you either count the coupons, or keep a log of who many came from what campaign, you’ll have the information you need.
Measurements can be:
- counting the number of people,
- counting the dollars sold, and also
- comparing the dollars into the marketing to the dollars or number of people out.
$1,000 spent on a campaign that generates $5000 in sales is a return on investment of 500%, $2 generated for every dollar spent on marketing. That’s one of those where you’d better start investing quickly. Take something like that and ask yourself, how many dollars do I want to make this year, calculate the amount needed to invest, and go do it. .
A small business owner asked me recently, “How can I measure my marketing?”
One problem that many businesses have is that they don’t measure marketing because they don’t know how. They are either throwing dollars into a marketing campaign that may, or may not, be bringing people in their door, but because they don’t have any way of tying these marketing dollars to any particular person walking in the door they don’t know if something is working or not, nor which marketing campaign might work and which ones don’t. Therefore, they are not in control.
Some may be “networking” or doing “word of mouth” marketing to keep costs down but they still have no clue whether the time they put into that effort turns into anything.
These business owners are simple “at the mercy” of the economy, or their poor marketing, and it’s time to get control so they can FIX or REPLACE that marketing.
When it comes to marketing, it’s a fairly simple formula. It’s
- (the number of people who see your marketing, and need it)
- The percentage of those who respond to your marketing message
- The number of people who respond, call you, sign up, or buy, or do whatever it was you wanted them to do in the first place.
The ultimate, bottom line measurement is one of 4 things
- the number of people that do what you wanted them to do
- the number of dollars it generated
- the cost of acquiring that customer (this being the most important measurement)
First, you MUST know that the person that contacts you is tied to a specific marketing campaign. If you can’t tie him back to a specific campaign your marketing is out of control. There isn’t much of a way of fixing or replacing.
One way of getting control is to have the customer bring in a coupon that’s tied to that campaign. It could be for a discount, or something you will give the customer for bringing it in. That will allow you to count the coupons against either how many dollars you spent on that campaign, OR how many people you actually reached out to in that campaign.
But here’s a VERY important point about measuring the cost of marketing. It isn’t the up front cost that you paid to do the marketing or produce it that counts. It’s the cost to acquire a client that counts.
So, if you spend $1,000 for direct mail to 1,000 people, you get 100 people walking in the door, that’s a 10% response rate, and it cost you $10 for those 100 leads. They aren’t sales yet.
Now, let’s say that 50% of those people buy. You now have 50 sales at a cost of $1,000, or $20 to acquire each client.
Now, that might be a fantastic number if you are selling a $500 item. Investing $20 that would turn into $500 is a good investment. The question now should be, “How many of these do I want to buy” and you’ll crank your investment and your marketing up far above the 1,000 people you just reached out to touch.
However, if you are selling a $20 candle or other item where there is only a one time purchase, then it might not work. Or, you may have to have a follow up campaign that markets to all of these people that bought the first time, so that we can get them coming back in month after month. A $20 purchase every month for the year is $240, and now, the $20 investment starts to sound not just workable, but could be a great business.
The point here is that we must be in control. At first we build a model that tells us what this marketing invest to cash flow looks like, and will it work, or will we have to fine tune it in some way. We don’t just live with whatever happens.
An example is one of my clients who’s a major freight insurance company that I had been working with for many years. Their marketing had been working very well. But, in January we noticed something, and this was probably the first impact of the recession on their business. Although the number of sales stayed constant, the dollar volume of each sale plummeted 75% within a couple of months. Easy customer was still buying, but buying smaller insurance policies.
What had been a very profitable sale was now costing them about what they made on each policy.
|Are you a small business owner who’s struggling with the recession, and would like to learn how to acquire as many clients as he can possible handle?But you’ve been struggling, not knowing how to do that during this recession. It’s actually just as easy to grow a business during a recession as at any other time. It’s actually how business owners respond to the recession that makes it feel so bad.
Get Chapter 1 from “How to Build a Super Star Coaching Business for free.
Alan Boyer coach’s coaches, who want at least another $100K this year … The reports have been “5-10 times more clients in just a few weeks, and still growing.
|“I will impact everyone I touch, both personally, and in business Every time we toucho Not just “a little” but to LEAP forward by MULTIPLES every time we touch, o Or I’ve missed the boat.” That’s what a Super Coach does.|
Alan Boyer — $100K Small Business Coach