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.

Big or small budget - it's what you do with it

Marketing budgets come in many sizes. Having a "small" budget, doesn't preclude you from being successful.

The Globe and Mail recently ran an article about a new company called Cenabal Gourmet Organics. In this piece, the article commented: "Standing in the way of her spreading the word is a modest marketing budget of $25,000 a year. Says Ms. MacDonald: 'I need advice on effective ways to create buzz around a product, without a lot of money.' "

For some small companies, that isn't a modest budget at all. It really comes down to making the most of the money you do have. And that doesn't mean cheaping out on your marketing endeavours either.

For Cenabal, an "expert" recommended that she modify the label - and if she can't afford to do that then she should create a small booklet that ties around the neck of the bottle. A much less expensive way to go would be to create a shelf-talker. This piece of cardstock can draw the consumer's eye to your product and inform them at the same time. And yes, you'd need a designer for it to be professional, but as an alternative to a booklet around the neck of the bottle, infinitely less expensive and potentially more effective as the booklet still relies on the consumer picking up the bottle to be informed.

The most expensive part of a small company's marketing budget should be the time put into knowing you have the right answer to reach your audience and make every penny count. And that doesn't mean finding the cheapest printer or designer. It means developing tactics that give you great returns, even if they cost a little bit more.

For example: It will cost you $50 to be a minor sponsor at a charity event. You get your logo on their website and a mention in the program. Value? You also have the opportunity to spend $100 partnering with a related business on a one-colour insert in your local Chamber of Commerce newsletter. If your budget is tight, which would you choose?

The insert costs twice as much, potentially four times as much once you get the writer and designer involved. What you would discover however is minor sponsors of charitable events rarely get any business from only a logo on the website and a mention in the program. So $50 out the window. (But keep in mind that it is important to be a good corporate citizen and do your part, either with the $50 knowing it isn't going to get you any business or volunteer your time)

With the insert, you are reaching hundreds of potential customers and could easily wind up with 10 or 12 new customers. So it cost you four times as much and you get 10 times the customers.

Get where I'm going with this? Don't pick the cheapest thing just because it's the cheapest. Always have your return-on-investment (ROI) in the front of your mind when you build your plans and pick the tactics that will get results, even if they cost more than the alternative.

Value statements - Your business in one sentence or less

Looking at my blog site statistics, I discovered the most popular piece was about taglines and their value. That being the case, I thought it a good idea to revisit the concept and expand a little.

It's surprising how many companies have trouble describing themselves in a succinct manner. It is such a challenge that TechAlliance in London, Ontario held a 60-second Pitch competition. Folks had to stand up and "sell" their business to the crowd in 60-seconds or less. So if 60-seconds is a challenge, 30-seconds would be even more difficult. And one sentence? Well, can it really be done?

I like to encourage clients to develop a "value statement" for their business. This could be part of the mission/vision statement process, or can be developed a bit later in the game.

One important thing to note: Your mission and vision statements are there for your internal audience, not for your external customers. Your mission and vision should inspire your staff to reach those goals. Mission and vision statements are not value statements, nor are they taglines.

Your value statement speaks to what you bring to the customer that is different than anyone else in your field. If you are selling based on best price, then that should be in your value statement. (I never recommend selling based on best price. People who purchased because you have the best price will move on pretty quick when they find another best price. You need loyal customers, not ones who only buy because you are the cheapest.)

Tepperman's has an excellent value statement - "Family to family, that's the difference!" Their tagline is another thing altogether - "We fit the lifestyle of your home". The Tepperman family has been selling to other families for decades. And families appreciate that they know what buying for a family feels like.

Unless you have just invented a brand new widget and have no competition, figuring out your value statement can set you above your competition. Is your value that you have loads of experience? Is it your location? Is it your training program? Or is it that you go the extra mile for customer satisfaction? These are just a few examples of things that can represent a value statement.

To develop a value statement, you need to listen to your customers. What is it they value about your business? If you ask enough customers, you'll start to see at least one attribute repeated over and over. This is probably where your value statement is hidden. Once you know that value, it is imperative you always live up to it. Nobody gets to have a bad day when delivering on your value statement.

Can your value statement also be your tagline? Maybe. There's certainly merit in the concept. And at the very least, it is the perfect place to start when developing your tagline.