Why Market In A Difficult Economy?
As you enter this economic downturn, where will you begin to trim business expenses to stay competitive? As a business leader, it is your responsibility to take a long, hard look at your budget and prepare for cutbacks.
Historically, advertising and marketing are some of the first line items to hit the chopping block. The typical thinking around this choice is something like, “We’ve got a great product, and most of our business comes through word of mouth, and it is so hard to measure the return on our marketing, so let’s just cut that out for now.”
While cutbacks may be necessary, let’s consider why deep cuts in your marketing may be a short-term gain that you may regret in the long-term. The rest of this position paper will illustrate why marketing in a downturn can be a significant advantage.
Marketing isn’t sales
First of all, marketing isn’t about making the next sale. This is an important distinction. Many people don’t understand the difference between marketing and sales at all. By definition, the concept of “sales” incorporates the process in which an item or service is offered in exchange for money. However, throughout the years, there has been a negative connotation tied to the idea of sales.
For example, a few well known references to sales include “To sell one's soul” (1570), “To swindle” (1597), “To sell (someone) down the river” is first recorded in 1927, but is probably from slavery days, on the notion of sale from the upper South to the cotton plantations of the deep South, and “To hard-sell” (1952).
On the other hand, the history of the word marketing shows us that this word originally referred to the various aspects of economics and the process of increasing the value of a sale. The verb “marketing” was established about 1635, from the noun “market,” referring to a place set aside for trade. It incorporated the idea of "creating sales, as controlled by supply and demand" about 1689, and shortly after this time the term “market value” (1691) is first attested in writings of John Locke.
So while the differences between these two terms may be subtle at first, the simplest distinction may be that the purpose of marketing is to create demand so that value of the items or service for sale will be enhanced.
It has been said that in the process of shopping, “No one wants to be sold, but everyone wants to buy.” In other words, we don’t want someone to convince us or push us into a purchase. Instead, we want to decide on our own that an item or service is valuable and desirable. It is the role of marketing to drive this desire to buy.
So if marketing isn’t about sales, what is it about?
Marketing is about control. It give you the ability to choose with whom you want to do business. Additionally, it provides you with more control over your finances. With a proper marketing plan, an efficient business will be able to stabilize the “feast or famine” of uneven business cycles, choose the best clients, gain positive press and recognition, while increasing profits.
So what should drive my marketing?
Big billboards? TV advertising? While the type of advertising you pursue may include some of these more noticeable outlets, the engine of any effective marketing plan lies in the strength of your positioning.
By positioning, I mean your specialized area of expertise.
What business are you in? What benefit does it provide for your client? Why would someone choose you over anyone else? Proper positioning is never general or vague. It is clearly defined and readily understood by the target market. It is speaks of your definitive ability to solve the client’s problem.
Positioning shifts the power
A compelling position allows your business to shift the power structure in the buy-sell relationship. When the client has the power, they threaten to leave and go work with another vendor. When the power is in your favor, the idea of withholding your expertise allows you to maintain the power in the relationship.
As an example, if it were necessary, whom would you choose to operate on your brain, the new general practitioner down at the walk-in clinic, or a brain surgeon? Of course you would go with the expert specialist.
A “sales” mentality wonders, “What do I have to do or say to get them to buy now?” The only purpose for a conversation or a relationship is to get to the sale.
In a marketing conversation, you might say, “Our area of expertise allows us to consistently deliver results in this specific area. Should it make sense for you to work with us, we would be willing to consult with you and determine if this working relationship is a fit for both parties.”
This approach allows for a calm, respectful conversation that values the other person. It allows you to operate within your area of confidence and expertise. It draws others in and creates a win-win relationship.
In the marketplace, typical sales efforts run blindly toward the opportunity and push their way to the front. Purposeful marketing knows where to be, and at what time. They know the right words to say, and the right way to say them. They don’t demand attention, but you can’t take your eyes off of them, either.
So how does a down economy affect this approach to marketing?
Actually, it increases the potency of this plan. Over the next 18 – 24 months, you will see your competition begin to water down their positioning and move toward a generalist approach. They will be searching for any new opportunity, and may be accepting new work that is revenue neutral (or worse).
This flailing creates a stressful, unproductive environment in which bad decisions cast a shadow over a once successful profit center. This will be time the to approach those potential clients who are an ideal fit for your business. The strength of your positioning and demonstrated expertise will be a significant attraction.
We are all certainly going to need to find ways to squeeze budgets and tighten up unnecessary expenditures. We are going to have to focus on the quality of our products and the relationships we are building with our clients. Fight the temptation to play the “me too” marketing game, focus your positioning, and consistently work your marketing plan. This will provide a significant advantage over your competition, and will greatly increase your opportunities for improving your profitability, even in a down economy.
Being the man behind the dream, Chad is founder and President of Cre8tive Group. His background in international video production keeps him grounded as he steers the company and maintains a cohesive team. Chad also writes at his blog, Marketing for Good.