Tweet

Recession survival strategy: Force your marketing to make money – by measuring

Guest post by: Drayton Bird

Article Overview: Is your marketing a cost, or an investment? You will only know if you measure your results. And you can only do that if you market direct – on the internt or otherwise

Recession survival strategy: Force your marketing to make money – by measuring



Marketing is one of the first things to feel the axe when times get tough - and no wonder if you have no idea what it's doing for you

Do the following figures interest you?

By moving nine words from the bottom to the top of a form, a loan firm increased the number of applications by 240%.

Adding two words in an email subject line doubled the number of enquiries about a telephone service

Putting someone's face in a letter about investment increased sales by 20%

Removing one piece from a direct mail piece for a bank increased return on investment by 92%

If those figures don't interest you, stop reading now. If they do, keep going.

Why managers cut marketing



When recession strikes, where do managers save money? Well, very logically they cut out things that don't seem essential.

Often that means marketing ... a rather vague discipline which often seems to ask you to spend a lot of money for an unquantifiable return.

This is because very little marketing is conducted in a measurable way. Yet all the really successful marketers - Procter & Gamble for instance - measure everything. What is more on today's dominant medium, the internet, everything can be measured.

If you look at some of the world's most successful firms - Amazon, E-Bay, Dell, or American Express, for example - they rely entirely or almost entirely on direct marketing.

Moreover, all internet marketing is direct marketing. That is, messages reach people directly via email, or they go directly to it when they go to a web page.

There are many other kinds of direct marketing - direct mail, mail order advertising, SMS messages for instance. And today the overwhelming majority of selling messages direct you to a website, giving you the chance to build a direct relationship.

But what they all have in common is they make it easy to gauge what you get for your money

Why it makes sense

There are actually three reasons, all simple, why direct marketing makes sense.

First, as I have explained, by coding all your messages you can measure your results, and when times are tough you need to know what results your investment is producing

Second, it is an ideal way to target and acquire the right kind of customers - the ones most likely to spend the most money

And third, it is perfect way to retain those customers for longer - and the customer you have got is from 3 to 8 times more profitable than an identical person who is not a customer.

In short, direct marketing, whether online or in traditional media allows you to spend your money where you will get the greatest return on investment.

But there is another reason which I first pointed out to an audience in India 22 years ago. Direct marketing is the closest thing yet to perfect marketing. Quite a claim, so let me explain.

What is marketing?

Marketing is defined by the British Chartered Institute of Marketing as: "Identifying, anticipating and satisfying customer requirements profitably".

There is another, simpler definition given by an American millionaire many years ago who said: "Find out what people want and need, and give it to them - and you'll get rich".

Peter Drucker wrote that the aim of marketing is to "know and understand the customer so well that the product fits him and sells itself." This is, if you agree with him, perfect marketing. And it is what direct marketing does better than any other method.

First through the use of postal, telephone and internet questionnaires it establishes very cheaply what people say they want.

But as we all know, what people think they want or say they are often not what they really want and not a good guide to what they will actually do. That is why a lot of research is very misleading.

Direct marketing solves that problem by clearly answering the BIG question: will they buy it? It does so by asking them to do so. As my old boss David Ogilvy put it, "General advertisers can only guess. Direct marketers know." By testing different messages you can see what works and what doesn't.

Why guess when you can know?

As a result I can tell you the answers to all sorts of interesting questions. Like what happens if you run long copy rather than short copy. How long you should have a phone number on the TV screen if you want to get the most replies. Where your headline is most likely to get read - and so on.

Peter Drucker also said, "The perfect advertisement is one of which the reader can say, 'This is for me, and me alone.'" By definition no mass advertisement can be perfect; but one which is addressed to individuals via direct mail or e-mail can be.

So it is worth reflecting that the light at the end of the advertising tunnel may be that of an oncoming train called direct marketing. You can get run over, get out of the way, or get on board: but whatever you do, don't ignore it.



Box:



Ten practical benefits of direct marketing

Here are ten things to remember about the power of direct marketing

• 1. Unlike many other forms of marketing, it can achieve your objectives cost-effectively (i.e. it can sell at a cost you can control)
• 2. If it's done properly, it also helps build your brand
• 3. You can start with a relatively small investment, which has an immediate impact on the profits before you invest big money. This means you reduce risk
• 4. Speed. There is a short lead time -especially on the internet. You can have an idea today and test it tomorrow
• 5. You can refine as you go along (adjust the investment, the projections, depending on your results, etc)
• 6. Very flexible. Can be easily switched on or off. You're not locked into a long campaign - unless it works. If it does, you spend more and keep spending longer
• 7. It's measurable, accountable: no guesswork
• 8. There's a massive opportunity in South Africa because so few companies are doing it properly
• 9. It helps you persuade individuals and overcome their objections with more detailed arguments.
• 10. It is a perfect way to get leads and motivate your sales force.

Related Articles
  How to Stop Wasting Money on Your Marketing
  Developers Make Moves to Round Out Their Business Models
  Part 5: Marketing and Sales Strategies
  Why You Must Keep Marketing Through The Recession
  Virgin Mobile embraces slow economy with “Screw You Recession” ad campaign

Article Tags: amazon, american express, axe, bottom to the top, dell, direct marketing, discipline, dominant medium, e bay, mail mail, mail order advertising, mail piece, many other kinds, marketers, marketing direct mail, procter amp gamble, recession, return on investment, subject line, telephone service



Related Forum Posts
Startup problems - The first stage of starting a company is survival - do what you have to do to keep the company going until you're at a point where you can pay yourself a full salary and start bringing on extra help. If you can't get to survival and have enough cash coming in the business won't make it past the first year.
Strategy People - Greetings all! Recently I have come to the understanding that I am severely lacking strategy. I have many, many tactics on how to make money with my business but without a strategy to implement those tactics I'm spinning my wheels. Has anyone found someone who is a great strategist for their business? There are lots of 'readable' resources around but like more entrepreneurs, I'm too busy thinking of ways to make money for my business rather than learning strategy. So, for me the best thing is to find someone who can help guide my business in strategic planning. Someone who can supplement my strengths with their own. As an extra question, is this a common trait amung entrepreneurs? How many here are good at strategy? If you learned to be good, how did you learn?
Alexa vs. Compete - Thanks for the tip Clint. I know Alexa is not perfect - but as far as I can see it is the best measuring stick out there. I keep track of my own numbers which are important for my advertisers as well. Why do you feel that Compete is a better measuring stick than Alexa? I would love to hear your thoughts on it.
Re: What can You Learn from a Jobless and Homeless Woman? - [quote="Kevin":2ymouuky][quote="Alan Mater":2ymouuky]Hi Kevin, That would certainly be new and interesting. It sure puts things in a different perspective.[/quote:2ymouuky] Yes, it would be the ultimate bootstrapping strategy... but I think it could still be done.[/quote:2ymouuky] Well, in all reality, anyone that would be in her situation could make use of various online business opportunities. There are many different ways to make money that don't require any money to do. All you would have to do is change your marketing approach to emphasize the fact that "even a jobless and homeless person can make money doing this."
Re: Best Internet Marketing Strategies - [quote="PromoBusiness":1g6hv9hl]I would honestly say, don't put all of your eggs in one basket. Years ago I was so proud to say that I could 'sell' to anyone in any industry. Over time I realized that certain industries were much more lucrative in terms of commissions and order quantity. I think the same idea definitely exists in internet advertising - if you are looking to one or two single sources of online marketing, you aren't seeing the whole picture. Keep with it, and try and make some kind of consistant effort.[/quote:1g6hv9hl] Yes, that's the best approach. While it's important to learn and understand one strategy at a time, it's also just important to broaden your efforts. Let's face it, we can't all be masters at any one strategy. It's best to diversify and make the most of our marketing efforts and reach the widest range of people as possible. Consistency is the key. Keep at it everyday, and you'll see results.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Leading from Authenticity is a Beautiful Thing

How To Calculate A Minimum Fee For Your Services

Adapting to Technology and the Internet

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.