Radium

Online marketing in a recession

Friday, 27th February , 2009

Digital marketing in a recession:
Hint – Don’t cut your budget and give away free stuff!

Forget about just weathering the storm and hiding under the covers. Now is the time to increase conversions, streamline your digital marketing and grab market share cheap! I know most companies will have the kneejerk reaction to cut their marketing and advertising budget. That’s fine if you want to lose market share and profits. But, if you’d like to keep your current customers and maybe gain new ones, don’t cut your budget – cut your costs and refocus your attention. Here are 8 steps to help you market electronically in a down economy.

1. Grab the low hanging fruit
You have the choice to attract new customers or retain and up-sell existing customers. The latter will always be easier and cheaper, especially in a recession. You already have a wealth of data on your existing customers (or at least you should), you know what they’ve purchased in the past and what products are logical up-sales and compliments. Reach out to your current customers and engage them in conversation. Remind them you still exist and you have solutions they need. In economic downtimes, consumers are looking for brands and companies they can trust and who better to trust then someone that has already sold them something.

2. Remove deterrents
Take a look at your website with a new set of eyes. Better yet, have a prospective customer or current customer review your website. Are there pages that are confusing? Are there broken links or missing content? Do you have images that don’t quite fit your brand image? Now is the time to clean up your site and take care of these items.

What are your goals for the website? Does your content help you achieve these goals? If not, get rid of it. Less is always more – say just enough and then move on. Cramming more information into your pages isn’t going to convert more customers. It will most likely just turn them off.

3. Focus on the middle and bottom of the sales funnel
If you have a website analytics or CRM system, now is the time to mine it (if you don’t have one, what the heck are you waiting for?). Take a look at your current conversion rate. This is your baseline. Your goal is to beat this number and close more sales and leads. Take a look at your conversion funnel. The conversion funnel is the steps a user must go through to accomplish a goal. Most analytics programs will visually represent your conversion funnel. Take a look at your goal abandonment percentage. Where are visitors bailing out? Take a look at these pages, fix them, provide additional content that is missing, and remove content that isn’t needed.

4. Don’t waste money on consumers that will never buy!
This seems obvious and it should be but frankly a lot of companies are directly or indirectly marketing to people that will never buy their products or services. Review your current advertisements and placements. Are you spending money on sites that have never led to a sale? Are you purchasing keywords that have never led to a conversion? Now is the time to trim the fat. Go back and comb through your data. The key is not cutting your budget but redistributing the money spent on losing campaigns to those that are returning a profitable return.

I would like to issue a word of caution when analyzing customer data. The old school methodology is to look at customers over their lifetime and review direct sales from these consumers. I’m not saying this isn’t beneficial to do (it is and I would recommend you do it) however, this methodology doesn’t take referrals into account. If your business has invested any effort into social media you will want to review your customers and see which ones are the most valuable to your company with a different set of metrics. How many friends have they referred to your site? What is the total value of all those sales? Expand the value generated to include these additional customers and recalculate their value. How do they stack up now?

5. Lower your customer acquisition costs
Your customer acquisition costs are all the costs associated with acquiring a new customer. To determine this number, divide total acquisition expenses by total new customers. Most online marketing mediums will compute this number for you automatically. Because each medium will have different costs associated with it, compute this number for each medium separately.

For paid search marketing there are several tactics that will help you lower your costs of acquisitions. On an overall campaign basis, you should already be working towards lowering your cost per click (CPC) by improving your keyword quality score and conversion rates. This is nothing new. You should already be doing this, but more often than not, I see companies that monitor their keyword lists for a few months and then never log back in. If you don’t have time to monitor your paid search campaign, hire someone who can. Otherwise, you’re wasting money.

6. Follow your competitors even closer than normal
Do you visit your competitors website, do you read their blog, are you signed up to receive their newsletters – You should be. As I mentioned earlier the kneejerk reaction in a recession is to dramatically cut operating costs by trimming advertising budgets and reducing services deemed unnecessary by the powers that be. This can be a huge opportunity for your organization to step in and sweep these customers off their feet. Did your competitor stop offering support for a legacy version of software? Maybe you should start. Has your competitor dropped their ad spend on Adwords? Maybe you should increase your daily budget. The key here is to monitor your competitors’ actions and be ready to take advantage of opportunities as they arise.

7. Understand your customer’s situation – Get out of your bubble!
Are you ignoring the fact that your customers 401K just got wacked for half its value and they’re worried about keeping their jobs in the next year? How can you expect your customers to care about you if you don’t care about them? Your company can’t operate within a bubble. Be real, be compassionate and be relevant to consumers. If you’re developing Ad creative, consider using current topics and concerns of your customers. If you’re unsure what I’m talking about, take a look at the new Allstate and Hyundai commercials.

8. Look for new outlets to reach customers at a lower cost
Ah, social media – I saved my favorite for last. No matter how cool and relevant your website is, consumers are going to spend their time elsewhere and that’s ok. The great thing about social media is that it allows your customers to experience your brand and company on external websites. Remember, no website is an island. You want visitors to consume your content on their time. Setup company pages on relevant social media sites and automate content updates with RSS feeds and subscriptions. Not sure where to begin? Perform a couple of company name searches across Google, facebook and Linkedin and see what turns up. You may find your brand loyalists have already setup pages dedicated to your company.

Conclusion
I haven’t presented anything new here. Digital marketing in a recession shouldn’t be any different than marketing in times of prosperity. However, in times of abundance we have the tendency to be lazy and not monitor items as closely as we should. Often items go overlooked and unchecked but when sales drop and costs become more visible these items come back to the forefront.