Recession survival - Knee-jerk marketing the woe of small business

How many times have you been contacted by a media or marketing sales representative who has a great song and dance about why they are the best place to put your marketing? And how many times have you bought what they're selling, even when it was never a part of your marketing plan?

Of course, that makes the assumption that you have a well thought out marketing plan based on your actual audience definition.

Most small businesses are led by people who are great at what their small business delivers, whether product or service. But being good at one thing doesn't make you good at everything. As a result, there are folks with no marketing training or experience developing plans or, most likely, making knee-jerk decisions based on the last sales rep who walked through the door.

In recessionary times (and I'm pretty sure everyone now admits that we're in a serious recession), it becomes more important than ever to develop a thorough marketing plan and then stick to it. Recession marketing requires a brave business owner who understands that cutting the marketing budget also means cutting off the conversation with the customer.

The value of the marketing plan versus knee-jerk spending is two-fold. Firstly, having a plan allows you to know what your expenses are every month so you can plan ahead. Secondly, it forces you to really think about who your audience is and how to reach them efficiently.

To start your marketing plan, you need to know all about your audience. And not just their age, education and income level. You need to learn about their hobbies, families and occupations. These additional pieces of information help you reach them in their 'special' places, and in most cases, more economically than in mass media.

After you really, really, really know who your audience is, you can move on to doing the research about what is available for reaching them.

Example: Moms with school-age children are trapped in the family vehicle for a number of hours, trotting children to extracurricular activities, doing the family shopping, etc. Reaching them could be as easy as buying your local radio station that runs bus cancellations and amateur sporting reports. Add the radio to a sponsorship of a local amateur sports team and a partnership with the local grocery store and you have a great package to reach this audience part.

Recessions require that if you are going to purchase a marketing tactic, you have to purchase it correctly. Planning helps with this. If you don't have enough budget to do it right in January, save January's budget and combine it with February's so you can achieve your goals. You are better off getting great results from a combined budget tactic than no results from a poorly delivered one.

And above all, know what your strengths are as a business owner and focus on those during recession. If you aren't a marketing expert, find someone who is. Even if your marketing expert costs you a few dollars, the increased results will make it worthwhile. (But for heaven's sake, make sure your marketing expert is actually a marketing expert not an ex-media sales rep or just someone who purchased a desk-top publishing program. Marketing is about a lot more than just being able to produce a flyer!)

Smart recession survival

Small business owners can see recession two ways. One where they sit in fear and one where they take advantage and stay ahead of the pack.

I suppose it's a natural survival tactic to hold everything close, keep it safe - particularly your money. But if you let fear govern your business decisions, you simply may not survive.

Recessionary times are when the smart survive and the unique get noticed.

Smart companies recognize marketing as a revenue generator, not a cost centre. They don't immediately cut their marketing budget. They get smarter about how the money is used. Mass communication is replaced with targeted communication. Interaction with the customer is increased so they stay front-of-mind.

Unless you are in a luxury market, your customers still need or want your products. Make sure your products and services are priced to reflect market tolerance. Surviving recession isn't about lining your pockets, it's about survival.

Get creative about how you reach your customers. Surprise them with where they find you and what you are telling them. Small business messages have historically been very ego-centric. You have to become customer-centric to make it through tough times (actually you should be customer-centric all the time, but it's even more important now). Standard tactics won't be enough.

And tighten up your marketing spend. That doesn't mean cut the budget, it means eliminate the chaff and be efficient with the money you have. If a tactic isn't bringing a return, then change the tactic. But remember when you are measuring the success of your tactics that it isn't just about the immediate return. It's about developing a relationship with your customer. If you're getting inquiries or website hits but no actual buying, then your tactic has done its job. Marketing's purpose is to bring customers to you, it is the job of the sales team to actually make the sale.

The best weapon you have in recession is a good data base of your customers. This will help you deliver personalized attention at the marketing level. You can gather a good data base through a contest with a small survey as part of the entry form. The contest creates traffic, either to your website or your place of business, and while your customers have a chance to win so do you with the information you gather. Variable data printing isn't only for big companies these days. It's affordable to businesses of all sizes.

Develop a referral program. This is common place in the financial services industry but is functional for all types of business. Your best advertising is word-of-mouth (whether it's traditional word-of-mouth or through social media) and if you can get your customers talking, you're a step ahead. And if your referral program is strong enough, they'll definitely start talking.

Above all, don't try to manage your marketing on your own. You're in the business you're in because that's what you are good at. Don't try to be good at everything - no one can manage that. Call in the specialists to really get your marketing budget working for you. But make sure they are trained and experienced. Just owning some desktop publishing software doesn't make someone a marketing specialist.

Small businesses can be agile. That's a great advantage over big business. Be ready to change at a moment's notice - whether it's your product list, your audience base or marketing tactics.

Recession means get smarter

The economic news throughout the world has recently become a big threat to small business. Lending has tightened, customers are holding their funds close to their chest. For many businesses, the next order of business is to cut costs. AIC, a mutual fund company cut their staff by 20% this week. In the article it is mentioned that this isn't as big a deal as it appears because most of the staff cuts were to IT and marketing.

And there's the rub. So often, the first that gets cut in a recession is the marketing team and the marketing budget. And without either of these, how do you get your message out?

Recessionary times are about being smarter with your money. Quite frankly, in my book being smart all the time makes the most sense but so many business people and even in-house marketing teams take the money for granted in the good times.

So how do you use your money wisely?

First, get to really know your audience. Mass marketing isn't economical if you sell a niche product or your audience represents a specific market. Find ways to fine-tune your delivery mechanisms. Stop talking to the people who will never be your customer. To use an example from last week's blog, if you are selling something that costs $30,000 stop talking to neighbourhoods with high unemployment or low incomes. You may have to get out of your office and actually sell your message in person.

Second, stop buying message delivery systems just because they seem inexpensive. If you spend $125 to reach no one who responds it is actually more expensive than spending $250 to reach those who will. Of course, you can only spend what you can afford, but if you resist the urge to spend that $125 that seems so inexpensive you can add that to next month's budget and actually reach people who care.

Third, and while I've come to hate this expression, think outside of the box. Be creative in how you reach your audience and how you spend your money. For some US readers, this could mean thinking about getting a Canadian marketing team to craft your messages. The difference between the Canadian and US dollar right now means you get more for your money. But it doesn't mean to resort to your nephew to do your creative development just because he happens to have a design program on his computer.

The companies that stay in the customers' minds during a recession are the ones who survive and grow more quickly after the recession ends. Which it will. It always does.

Relevant messaging - what if your customer doesn't care?

The Canadian election on October 14th had the lowest voter turnout in Canadian election history. And yet, for many of the people who voted, it was considered the most important election in their lifetime. What went wrong?

Apparently the majority of the population just didn't care. (I am a firm believer that if you don't vote, you don't get an opinion about the state of the government later on.) They were getting mixed messages from the media, backtracking from the politicians, irritating telemarketers and door-knocking canvassers.

There was too much negative commentary from the parties as well. And here's a very important point for small business that would have put a different tone on the election. Spend your time and your money telling me what is good and unique about you; don't spend my time just yapping about the things that are wrong with the competition. Yes, yes, each of the parties purchased advertising in which they spouted their positive attributes, but we all know that media coverage gets more attention and belief than any paid advertising. In the end, all the political leaders looked lame and some even looked childish.

I had a conversation right before the election with my local MP. We had a great chat about how the Conservatives are their own worst enemy when it comes to messaging. What they mean to say and what gets published in the media are often two very different things. And I can't help but think that if they actually had a marketer, instead of just a whole slew of public relations folks, their messages might be a little tighter. Sure they use a marketing firm to produce their lovely paid advertising, but where is the marketing guidance for the every day mess?

The complicated stories that were the underlying issues of the election were too complicated to resolve in speeches or one-minute ads. The environment, the economy and leadership abilities all require a consistent, understandable message - one that isn't up for media interpretation.

And small business needs that relevant, clear message as well. You can spend a lot of money uselessly if your messages aren't relevant to a person's life. You can help people care through education and exposure, but neither one of these things is an instant return. Are you selling a $30,000 item to an area with high unemployment and a fear of job loss? You might want to check in on the relevance of your messages.

Politicians are fun to watch because they have to educate, get exposure and convince people their "product" is the best, all in a short period of time. Jack Layton hasn't changed his "product" in years - so if it wasn't relevant to people before, why would it be relevant now? Elizabeth May personifies what everyone feared of the Green Party - fanatical extremist. That has a pretty limited relevance. Stephen Harper obviously had the most relevance for the voters - a calmness in the face of economic explosion, a leader who admits mistakes rather than blaming others. He has his flaws but he came closest to being relevant to Canadians. And Stephane Dion? Well, poor Mr. Dion just didn't have a clue. And all the Liberals are equally to blame. They voted him into the leadership position and supported the Green Shift. Don't let any of them convince you that Mr. Dion did that all by himself. Relevance, gentleman ( and lady). If you want voters out, you better find out what is relevant to your customers. And that's us. Every single person in Canada is your customer.

Part II - Be careful how you say hello

Last week, I took a look at the dangers to your brand that a badly handled dismissal or layoff can create. This week, I'd like to spend a moment with how ignoring the importance of your brand when hiring new staff can have long term effects.

The brand outline is rarely one of the things that is contained in the welcome package for an employee (and some companies don't even have a welcome package and, okay, they don't have a brand outline either). New staff learn about the human resources policies, benefits packages and history of the company. But there is an absence of indoctrination into the brand and the importance of upholding it.

Lots of senior management believe that upholding the brand is the duty of the marketing department but in reality it's the responsibility of everyone who works at the company.

Basic brand ideas, such as the appropriate font for emails, can be shared with new staff easily. I've lost count of the number of emails I have received from customer service staff using wonky fonts. And the language in emails needs a certain tone depending on your business and your brand. There's a big difference in how the staff talks and writes at Virgin Mobile compared to a stuffy insurance company.

And then there's the evil creature - the PowerPoint presentation. When staff outside the marketing department are called on to do a presentation, their imaginations run wild. Colours, images and language that have nothing to do with the brand creep in; no one stops them because, as I mentioned, there is a belief that brand protection is the job of the marketing department. Heaven forbid one of these presentations gets out of the building and in front of the customer. Any strong brand presence is whittled away.

Your staff needs to be engaged with the brand and have enough knowledge of what it represents to uphold it. This includes not just the visual and verbal entities mentioned above, but the philosophy of the brand as well. Companies who have brand support throughout their staff are strong companies. And they're believable companies because their message never falters.

Be careful how you say good-bye

Companies expend a great deal of time and money protecting their brand in the public, but for many companies it is their internal behaviours that are the most dangerous. How new staff are greeted, and existing staff let go, have multitudes of impact on the perception of the brand.

A recent example is, of course, the automotive industry in Ontario. The lay-offs abound and some brand damage has been delivered to General Motors and Ford, among others. The important thing here is these companies put effort into minimizing the public effects of the lay-offs as best they can with great buy-out packages, paid new training for laid-off workers, minimizing impact through attrition and negotiating support with the government.

A disgruntled laid-off or dismissed employee has a huge impact on the brand. They all have families that are part of the experience, feeling the anger, humiliation and fear right along with the worker. And all those family members have extended families and friends that hear about the issues. All told, one worker can impact the brand attitude with over 50 people.

Companies in the financial services industry have varying levels of attention to how they treat workers. Many of these companies in Canada are out-sourcing support departments. (The financial services industry in the U.S. is just another story all together) How these out-sourcings are handled impacts the brand.

A positive example is Sun Life Financial. They undertook to save costs against their budget by outsourcing their cafeteria, fitness staff and print departments. There was fear among the employees as the negotiations took place, but Sun Life Financial minimized the impact with regular communication and assurances of protection for existing employees. When the outsourcing was implemented, the staff in each department were offered the opportunity to stay, have benefits and keep their seniority.

A not so great example is the out-sourcing of the mail room at Aviva Canada. The staff were informed of the negotiations last November and were promised protection. Suddenly just before Labour Day, a meeting of the mail room staff was called and they were all informed the department had been outsourced and their jobs at Aviva Canada would end in four days. So much for even an act of courtesy like two-weeks notice. Sure, they gave them a buy-out package including the two-weeks in lieu of notice (required by law), but these people were suddenly out of work - after understanding they would be protected. The next day, the outsourcing company, Pitney Bowes, arrived and offered the staff their jobs back, but at $10,000 a year less, with no seniority, no accumulated holidays and a three-month probation period. And they had one-day to decide if they would commit to this new job.

Aviva Canada was most pointed in informing the mail room staff that they would now be considered outside employees and would be treated as such if they should apply for a job with Aviva in the future. This after some of the staff had been with the company for nine years.

Now a couple of nasty brand things happened here. Aviva Canada's brand got nailed as being untrustworthy, secretive and uncaring. Pitney Bowes gets nailed as being cheap, uncaring and advantage-takers. It's not about the money and the 30% cut in pay most of the workers experienced, it is about decency and dignity. Giving these people only one day to decide if their future was tied to an advantage-taking company or tied to unemployment in a potential recession, fear would certainly win out. Perhaps this is good business strategy - trained workers at 30% lower cost - but it isn't even close to good brand strategy.

And if these companies think for one moment that the staff of the mail room didn't share their experience with their families, they are not thinking clearly. And what the family members do with the information - well, the company has no control over that.

Next week - be careful how you say hello. Yet another brand damaging experience.

The cost of creative - in dollars & sense

Great marketing is driven by great creative - the words and pictures that engage the consumer. It evokes emotion, whether good or bad. And emotion is the key driver in 90% of purchases in our modern times.

Before the 1970s, features and benefits helped the customer make the buying decision. Now the decision is based on how they feel about the product or service. Does it make them feel good? Is it easy to see "What's in it for me?"

Creative that doesn't engage the consumer or, heaven forbid, causes a negative reaction is, at best, a waste of time and money and at worst, damages the relationship between the company and their customer.

Great creative isn't cheap. It's a rare thing when the perfect creative answer happens in the first hour of work. But don't be fooled that you need to pay $250/hour or more for creative that really works for your customer.

Quick case in point - Microsoft (you knew I was going to there). The Jerry Seinfeld/Bill Gates partnership on what was supposed to be Microsoft's venture into being "cool" is a fiasco. And certainly didn't come cheap. Why would they even try to be cool? Well, because Apple looks cool, sounds cool and is slowly chipping away at the PC world. But Apple is cool without obviously trying. Microsoft is rather like your great uncle who wears plaid pants and sock with his sandels. You can give your uncle a great, funky haircut and new clothes - but he'll never be cool. He doesn't talk cool or walk cool.

Somewhere along the way, the creative team on the Microsoft fiasco forgot that the success of Seinfeld, the show, was based on the interaction of the characters not on the simple presence of Jerry Seinfeld. It was an ensemble success. If you change one element, it no longer has the appeal. Seinfeld himself was never the key element. He was simply the glue that held it all together. And worse news, Seinfeld is old news.

I have the utmost respect for Bill Gates, his philanthropic work and how he has taken Microsoft to the edges of world domination. But I simply have no respect for the idea that Bill Gates can act or even look comfortable on screen.

Big lesson here? Don't try to be something you're not, even if the highly paid creative team thinks they are on to a new direction. Use common sense. And no matter how you look at it, $10 million for an "old news" performer to kibbutz about everything except the product is bad, bad, bad.

But fortunately for Microsoft, all the brew-ha-ha over the Seinfeld fiasco allowed their Mojave Experiment campaign to basically fly under the radar. Whose brainchild is this? The creative team obviously recognized that Windows Vista is a behemoth of negativity. But trying to disguise it as a new operating system called Mojave is just emphasizing how really negatively consumers feel. If Microsoft accepts the consumer view that Vista is the devil in disguise, then seriously make headway in changing the consumer attitude. And not through an ill-conceived television campaign. Deal with the issues that make consumers angry. Deal with the megalomaniacal behaviour that made the decision to design Vista so you have to spend a ton of money replacing your older programs with new versions that work with Vista. And how about more testing before release so you don't fry people's brains with ridiculous errors and constant updates to the product? If you bought a refrigerator and then discovered you had to re-wire your house to use it and it only remembers how to stay cold with constant adjustment - well, you'd just return it and probably not buying anything from that company again. This concept isn't rocket science.

And contrary to what Apple would have you believe, their operating system is not without its own bugs. They may not have the blue screen of death, but they have the ever spinning wheel which, if you watch it long enough, probably hypnotizes you into believing they are a direct descent of the gods.

Enough with trashing poor, poor Microsoft. (Although if you folks at Microsoft can hear me, maybe next time hired folks who are a little less "cutting edge" and a little more "common sense")

To bring it all back into the world of small business, your creative should engage your customer in a positive way. Keep it neat and tidy (no over-designed grunge please). Catch their eye and give them a reason to spend a minute with your message. Don't embellish (you'll get caught), don't lie (you'll get fined), and don't think that amateur creative doesn't damage your brand. It does.