Marketing in Tough Times

With all the emphasis lately on the federal government's "No Child Left Behind Act", sometimes we tend to loose track of a very important point. State and local governments provide the overwhelming majority of funds to support the K-12 market. The latest statistics, published in April 2002 for school year 1999–2000, NCES reported that local and intermediate sources made up 43 cents of every dollar in revenue, state revenues comprised 50 cents, and the remaining 7 cents came from federal sources.

Why should this concern us? Because it is difficult to pick up the newspaper lately and not find an article on how states budgets are being slashed due to reduced revenues. And, since a major chunk of every state's budget is allocated to funding education, we can see the writing on the wall. State funding for K-12 education is going to be reduced in the near future.

And, as schools receive less money, they are going to have to make some difficult choices. And, putting off or reducing technology and supplemental purchases may become a necessity as districts struggle to balance their budgets.

So what's a smart marketer to do in the face of this forecasted downturn? Unfortunately, as revenues decrease, so must expenses, if the bottom line is to be constant with the past. Chances are, you've already been thinking about how to pare down your marketing investment for next year.

Here are some practical strategies for doing more with less.

Create a Customer Loyalty Program

Remembering that your best customers are your competitor's best prospects, focusing on customers in tough times is the most important strategy for surviving and prospering the next few years. Customer loyalty is built on honest and trusting relationships, customer satisfaction with your products and services, and excellent customer service and support. Look into all three of these areas to devise programs to strengthen each one. Now might be an excellent time to jetsam that automated phone service and put a live person on the phone to service your customers.

Reduce Your Spending on Unqualified Prospects

This strategy calls for a renewed concentration on targeting your prospects. We know that 25% of the market will never buy from you and identifying these prospects can help you focus more attention and time on the prospects who might turn into a customer in the near future. This is not only a strategy for list selections for direct mail marketing, but also applies to other marketing investments such as advertising and exhibits. And, it doesn't mean that you should eliminate advertising or exhibits next year, but it does suggest thinking about creative ways to pare down the time and effort spent in these venues with unqualified prospects.

Shorten Your Horizon

As strategic marketers, we like to look three to five years down the road and plan our marketing investments accordingly. But in tough times, a smart tactic is to shorten our time frame to one to 2 years. Why? Because surviving in tough times means getting an immediate return on our marketing dollars. And, because the competitive landscape is going to change in the future. Smart companies will survive and weak companies will disappear. So before we spend even one dollar, we need to ask ourselves the question "Will this marketing investment pay off within the next two years?" Think about this in relationship to setting objectives for your partnerships and co-marketing ventures as well as image and branding strategies undertaken during the next two years.

Negotiate Aggressively

Being from New York, this strategy comes as second nature to me but now that I moved to Denver, I can see that being aggressive is not a national trait! But in tough times, smart marketers realize that everything is negotiable – printing, ad space, and yes, even creative costs like copywriting and design! In this market, your suppliers are also having a hard time and will be more anxious to get your business. And, don't forget to ask, "What's free?" Many suppliers are offering "free" services such as banner ads on their web sites, extra circulation of their magazines, and three different catalog treatments for the price of one!

Don't Stop Marketing but Market Smarter

There have been numerous studies showing that companies who continue to maintain their market presence during tough times come out of the market dip stronger than the companies who didn’t. There are logical reasons for this that can be summed up by "The loudest gets the most attention, especially when everyone else is silent". But its not a matter spending more, it's a matter of spending less but getting the same value as if you were spending more.

Remember, the education market is a cyclical market and somewhat recession proof, and schools will always need instructional materials. They just might buy less of them this year or delay their purchases. And tough times always evolve into better times. Marketing smartly now will ensure that your company is around for the good times ahead!

ABOUT THE AUTHOR
This article was written by Carol Ann Waugh, President of Xcellent Marketing, a marketing and new business development firm specializing in the educational and library market. Xcellent Marketing offers a variety of marketing services to help publishers increase their revenues and profits from identifying new markets, providing critiques of web sites and marketing communications such as direct mail, catalogs, advertisements, etc. as well as developing effective traditional as well as Internet-based marketing plans. Carol can be reached at (303) 388-5215 or at cwaugh@xcellentmarketing.com.