34. Get Back to the Basics: 3 Essential Strategies to Marketing Success in Tough Financial Times July 30, 2009 3:15pm - 4:00pm Understanding that marketing success comes from having a solid strategy in place is especially important during tight financial times. Whether you still have a large budget for an extensive branding campaign or are working under a newly reduced marketing budget, you will be more successful after you determine how to allocate your funds and efforts to those items with the best return. This session will cover the importance of first understanding your ideal customer and developing your unique message, and only then, determining the best tactics to communicate your message and brand for effective lead generation.
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Understanding that marketing success comes from having a solid strategy in place is especially important during tight financial times. Whether you still have a large budget for an extensive branding campaign or are working under a newly reduced marketing budget, you will be more successful after you determine how to allocate your funds and efforts to those items with the best return. This session will cover the importance of first understanding your ideal customer and developing your unique message, and only then, determining the best tactics to communicate your message and brand for effective lead generation.
So, let’s get started…Well - We live in interesting times.
The panic on Wall Street rippled quickly from the investment community ……into executive suites and down the line to each and every employee.
Everyone is talking about how to react. What are the impacts to our nation? Our economy? Our business? Us?
So…. How should we react? I’m speaking to you as the leader of a marketing team at a software company in Houston. But, I hope that what we’ll talk about today is helpful also to you as business and marketing teachers. And to the students that you teach. Students who will be shortly entering the environment that we are operating in. Maybe the most important question we as business leaders and teachers should ask ourselves: What actions can we take today that will make our company – in the case of those in private industry - a better one to do business with in this economy?
What I’m finding in my business and in talking with other marketing leaders in Houston is that its critical right now to recognize that the rules of the game have changed…possibly forever.
Yet, at the same time, I’m also observing and hearing confirmation from colleagues about the value of listening – paying attention to - understanding your market. Your prospects. Your buyers.
Many companies who are really struggling right now have fallen into the trap of chasing outcomes and guessing at what their business will become. The actions they’ve taken have largely been tactical, with a focus on cost reduction— giving executives no greater or lesser peace of mind about their prospects going forward.
On the other hand, what we are trying to do – and what other companies that I see as successful right now – are trying to do is to identify the strategy we can execute that will best align our business to the market for the next two years—where uncertainty is a given and cash flow liquidity a must.
At my firm, my team and I are really focused not on the past, and this might sound strange – not on the future. We are focused on aligning our strategies and execution for improved performance today. And, well, we are pretty excited - as we believe that great companies and products can be built or grow in a down economy.
If you look back to the last recession, in the early 90’s, you realize that companies like Google, Amazon, and eBay all emerged as leaders during the last downturn.
And if you look back farther, to the Great Depression and to the panics and downtimes in the late 1800s, you discover that companies like P&G, IBM, GE, United Technologies, and FedEx were all launched during what looked to be extraordinarily bleak periods.
So, at my company, my team and I are aligning ourselves to replicate those kinds of successes. We want to take advantage of this downturn to cement and grow our market leadership and to position ourselves to take advantage of a new wave of growth.
Well then, what are we doing? Our strategies our pretty straight forward. We are channeling our efforts and energies into 3 key areas: 1. Understanding our Buyers Now – how well are we aligned to the current market? 2. Refining, refining, refining our message—What’s working and why? 3. Focusing on maximizing our marketing investment—How do we make good decisions about where to invest our budget?, How do we build a competitive edge?, How we can make it easier to do business with us? How can we build a strong network of supporters? How can we be most relevant?
First, 1. Knowing our customers—How well are we aligned to the current market? In my career as a marketer, I’ve always found it critical to understand the customer first. But, I’m discovering that that is even more important now. The market has changed and we have to deal with that. If we tried to make decisions without a complete and accurate view of the current world - as it exists right now – we would be crazy. But, that’s what a lot of companies and marketers are doing. They are guessing and assuming— when, in reality, they have no idea whether or not they really know whats going on right now in their markets.
What we’ve been doing is going back to square one to make sure we understand our customers and their markets right now. No assumptions. We are investigating things like: Does the market still care about what we do (the same, more, or less) than they did 3 months, 6 months, 1 year ago? What are our buyers’ plans for investment next year in our market segment? Do we understand how buyers make decisions today? How well aligned is our ability to execute? Are our products relevant to today’s market problems? We know these questions are hard and we sometimes find that the answers are hard to hear too. But we believe that understanding our buyers right now is the critical first step to strengthening a winning platform. And, it give us confidence because it identifies some future business opportunities. And, we’ve discovered that some of those opportunities are the same and some are different than we used to think, prior to the downturn.
Everyday, we are committed to stop assuming and keep listening to what our buyers are saying. We listen by asking direct questions, Discovering reality is a critical first step to building a platform to win. It instills confidence because it identifies your future business opportunities. They may be the same or different than you envisioned them before the downturn. That’s neither a good nor a bad thing—just a reality.
Step 2 is a bit of a tongue twister. But it basically comes down to …. What’s working and why?
Or in other words, I could say that we view Step 2 as Refining, refining, refining our message to determine what messages are working right now and why. We are working to understand buyers better than they know themselves and to anticipate the actions those buyers will take. We are working to identify buying patterns and use that info to focus on the messages that matter most. We try to only concentrate on the bright lights in figuring out what’s working and what messages to use.
What does that mean? It means that we even though we collect data on our buyers that shows bad news – information such as cut budgets, cut staff, delayed purchase orders etc – and we absorb that information, we also believe there is always a plan available for success, so we keep digging and refining our understanding and our messaging. We focus more on what’s working than what isn’t. And we keep searching for the bright lights – the information that shows a positive trend or an opportunity. The kinds of things we look for and then develop and refine messages for are business areas that we hadn’t considered, or channels of distribution or products that are outperforming the rest of our business, or external trends where we have competencies that we have not exploited.
So, I’ve talked a little about 1) how important we find it is to understand our buyer right now, and 2) how we are focused on refining our messaging to the messaging that’s working ( and maybe more importantly, understanding why that messaging is working). Now, I’d like to talk for a few moments about 3) how we determine the best tactics, right now, in a recession -- to communicate our message for effective lead generation.
Step 3 is really about Focusing on relevance—How do we make good decisions about where to invest our marketing budget?, How do we build a competitive edge?, How can we make it easier to do business with us? How can we build a strong network of supporters? OVERALL - How do we determine which nuts and bolts marketing tactics to use right now to communicate our message for the most effective lead generation?
Given these macro economic trends, how should you allocate your marketing budget — and time? Here is my definitive guide to B2B marketing during a downturn:
1. Use lead management to maximize the value of each lead. In a recession, risk-adverse buyers take even longer than normal to research potential purchases. When you first identify a new prospect (regardless of whether they downloaded a whitepaper, stopped by your booth at a tradeshow, or signed up for a free trial) they are more likely than not still in the awareness or research stage and are not yet ready to engage with one of your sales reps. What this means is you need lead scoring to identify which leads are highly engaged, and lead nurturing to develop relationships with qualified prospects who are not yet ready to engage with sales. Without these capabilities, as many as 95% of qualified prospects who are not yet sales-ready never end up turning into a sales opportunity. These prospects are valuable corporate assets that you worked hard to acquire — so in a down economy you need to do everything possible to maximize value from them. Implementing even a simple automated lead nurturing program can yield a 4-fold improvement in the conversion of qualified prospects into sales opportunities over time. That's a dramatic improvement marketing return on investment! Net-net: Companies that can do a better job of managing leads and developing early-stage prospects into sales ready leads will be in the best position to thrive in a downturn.
2. Focus on your house list. In a recession, you may have less money to spend on acquiring new customers. The solution is simple: spend more time marketing to (and building relationships with) the people you already know. Some activities that can help you get the most out of your existing relationships include lead nurturing campaigns, creating new content to offer to existing prospects, and cleaning and augmenting your marketing lead database.
3. Build and optimize landing pages. When times are tough, it's more important than ever to maximize the return on your advertising. Whether you are using Google AdWords, banners, sponsorships, or email campaigns, a dedicated landing page is the single most effective way to turn a click into a prospect. Relevant landing page can easily double conversions versus sending clicks to the home page, and testing your pages can increase conversions by another 48% or more. Together, these tactics alone can result in 2.5X more leads for every dollar you spend, something that's sure to look good in tough times. However, most companies are under-using this important technique: just 44% of clicks for B2B companies are directed to the home page, not a special landing page, and of B2B companies that use landing pages, 62% have six or fewer total pages. A recession is perhaps the best time to focus on some of these basics.
4. Content for later in the buying cycle. When buying slows down, you need to focus more than ever on making sure you are finding the prospects who are actually ready to buy — or even better, make sure they are finding you. One great way to do this is to focus your offers on content that will appeal to someone who's actually looking for a solution (as opposed to thought leadership and best practices content, which can appeal to prospects who may one day have a need but are not currently looking). Examples of this kind of content can include "Top 5 Questions to Ask a Potential Vendor" whitepapers; buyers guides and checklists; analyst evaluations; and so on.
5. Appeal to the nervous buyer. A recession can mean more risk-adverse buyers, which may lead to a tendency to go with "safe" solutions. This is fine for large established companies, but it means younger and smaller companies need to do more than ever to reassure and build trust. Tactically, this means including customer references, reviews, expert opinions, awards, and other validation as part of your marketing. Strategically, a recession means fewer risk takers and visionaries, so use methods that appeal to mainstream pragmatists: industry-specific marketing tactics and solutions; vertical customer references; relevant partnerships and alliances; and whole solution marketing.
6. Align sales and marketing. Today's prospects start their buying process by interacting with marketing and online channels long before they ever speak with a sales representative. This means companies must integrate marketing and sales efforts to create a single revenue pipeline. The old days of functional silos and poor communication between the two departments must end. A tougher selling environment, driven by a recession, means this is more true than ever.
7. Don't be a cost center. Most executives today think that Sales delivers revenue and Marketing is a cost center. Marketers are partly to blame for part of this mindset, since when we use metrics such as "cost per lead" we frame the discussion in terms of costs, not in terms of impact on revenue. More subtly, using language like "marketing spending" and "marketing budget" instead of "marketing investment" perpetuates these beliefs. In a recession, marketing needs more than ever to change these perceptions. This means that marketing investments must be justified with a rigorous business case and should be amortized over the entire "useful life" of the investment. And it means marketing must increase marketing accountability by demonstrating the impact of each marketing activity on pipeline and revenue. Of course, this is easier said than done, but that doesn't mean you shouldn't try. Even small steps, like reports that show the total opportunity value for each lead source or campaign, can make a big impact.
To conclude, an economic slowdown means a tendency to scale back marketing spending. However, research shows that a downturn creates opportunity to accelerate growth faster than your competitors. This means it may be the best time to step up your marketing — at least in quality if not quantity. The marketers that focus on getting the most out of every dollar spent and on demonstrating marketing's impact on revenue and pipeline will be well positioned to come out of the slump looking like a star.
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