Marketing Part 1: 9 Survival and Growth Strategies
By Craig Huey, president of
Creative Direct Marketing Group
Businesses and consumers are cutting back on
discretionary spending, which means lower response
rates for you. On top of that, your marketing
budgets are being cut. This combination has sent
many marketers into a panic.
That’s why you need to reevaluate your marketing
game plan for this recession. Here, I’ll reveal the
specific actions you can take to survive this
economic downturn and be more successful throughout
Having helped clients through five recessions, I’ve
seen firsthand what works and what doesn’t.
To everything there is a season
First, it is important to know that recession is a
normal part of the business cycle. The U.S. economy
will come through a downturn or recession and then
enter a new period of growth.
But, the hard truth is most recessions last about 16
to 18 months. This current one began in December
2007, but will probably last into 2011-12.
And with the government scrambling to implement
dramatic economic policies that will likely cause
more harm than good, some economists project that we
won’t see the end until mid-2012.
Whatever the length, you can increase cash flow and
profits now…and secure a major advantage over your
competitors and expand your market share in the next
Anticipating economic reality: Knowing the 4
Before we look at the first three of the nine
recession marketing strategies that you will need to
survive and thrive in this recession, every marketer
should be aware of four basic, economic trends that
will affect your campaigns.
1. Deflation—a downturn in the economic cycle
reflecting declining prices and a credit
contraction. Our current historic deflation was
predicted by a number of economists and investment
advisors over the last few years. It’s not a
recession, but an economic crisis accompanied by a
2. Inflation—a rise in the general level of
prices of goods and services over time caused by
high rates of growth in the money supply. Inflation
can be thought of as a decrease in the value of the
unit of currency. It is measured as the rate of
change of a price index. Because of the massive
government bailouts and deficit spending, this will
be your marketing enemy in a few years.
Under the Carter Administration, inflation shot up
over 12 percent. Under George W. Bush, it was up to
6 percent by November. Now, it’s dipped back to
about 3.4 percent, because of deflationary pressure.
Expect to see inflation rise at the start of next
3. Recession—a significant decline in
activity spread across the economy, lasting longer
than a few months. It is visible in industrial
production, employment, real income, and
wholesale-retail trade. The technical indicator of a
recession is two consecutive quarters of negative
economic growth, as measured by a country’s gross
domestic product (GDP). Unemployment is still lower
than it was under Jimmy Carter.
4. Stagflation—a condition of slow economic
growth and relatively high unemployment. It is a
time of economic stagnation accompanied by a rise in
prices, or inflation. This could be what we are
headed for, lasting for 5 to 10 years.
By anticipating and understanding these economic
realities, you can better adjust your marketing
message and strategy. The key is to approach your
challenges strategically and tactically—rather than
act out of emotion and fear.
When the late Sam Walton, founder of Wal-Mart, was
asked what he was going to do about the recession
years ago, he answered: “We don’t plan to
Lessons learned from the past 5 recessions
One of my favorite recession research studies gives
you some strategic guidance:
McGraw-Hill Research published a study of 600
companies in 16 industries over a 5-year period that
included a recession. Researchers concluded that
firms that chose to maintain or increase their
marketing budgets experienced sales growth that was
256 percent higher than those companies whose
Furthermore, those who cut back on their advertising
realized a small increase of only 19 percent in that
same time period.
Here is another lesson learned from the last
recession: The 25 percent of companies that
increased their marketing budgets saw an increase in
market share that was 2.5 times greater than
competitors who cut back.
But that’s not all you need to know. Here’s what
I’ve learned from past recessions…
• Companies that don’t adjust their marketing to the
new economic environment suffer.
Lesson learned: Think twice before arbitrarily
cutting your budget. With so many of your
competitors cutting back, you’ll have new
opportunities for growth.
• Businesses that follow the direct marketing model
trump those who rely on traditional advertising.
• Historically, companies maintaining or increasing
their direct mail marketing through economic
downturns increase sales and market share during and
after the slow period.
• Businesses that regard direct response advertising
costs as investments rather than expenses enjoy
higher long-term dividends.
• Companies that stay aggressive in a downturn seize
market share from more timid competitors.
• Companies that cut back will lose revenue and
opportunities, with fewer up-sells and cross-sells
for several years after the recession…profoundly
impacting the bottom line in the long-term.
Now let’s look at the first three survival
strategies you should implement now.
Strategy #1: Re-examine your current marketing
Image advertising is a waste of your time and money,
especially in a time like this. If you’re not using
advertising that provides a measurable, quantifiable
cost-per-lead, cost-per-sale and lifetime value of a
customer, you’re practically throwing your money
You absolutely must know your:
• Cost per lead
In a recession, it is more critical than ever to
hold every marketing campaign accountable. That’s
the only way to know how you should react in a down
market and get the maximum impact for every single
• Cost per sale
• Lifetime value (LTV) of a customer
For example, the lifetime value of a customer tells
you exactly how much you can afford to spend to
acquire a new customer.
Without these statistics, it is impossible for you
to know whether you’re making the most profitable
use of your marketing budget. It’s the only way
you’ll know whether you’re getting a positive or a
negative return on your investment.
Strategy #2: Review your Unique Selling
A powerful USP will grab prospects’ attention,
distinguish you from competitors, and draw them into
Now is the time to review and revise your USP. If it
doesn’t tell your prospects how they will benefit
from your product in today’s downturn and
distinguish you from the competition…chances are
you’ll become irrelevant.
Your USP needs to be prominent, easily found, and
up-to-date in all of your marketing—TV, direct mail,
website, you name it.
Tip: Before sending out your next campaign,
take the time to review and revise your USP. Then
place it at the beginning, middle, and end of every
marketing piece you create.
Strategy #3: Address marketing evils with
Marketing evils are the barriers that stand between
your customer and their decision to buy from you.
They create skepticism toward your product.
Today’s marketing evils include:
• Economic crisis
• Legal and regulatory changes
• Budget cuts
When money is tight, fear of making a poor
purchasing decision is high. Prospects will question
what you say and raise more objections that prevent
them from buying.
Don’t ignore the worries, fears, and concerns that
are plaguing your prospect. Instead, use preemptive
copy to address and overcome prospects’ skepticism.
Well-executed copy for this recession will do the
following four things:
1. Address and dismiss your prospects’ objections.
Tip: Ask yourself these questions: Do I feel that
the writer cares about me and understands my
problems? Why should I respond now or later? Do I
still have objections?
2. Demonstrate how your product solves their most
3. Explain why your product is absolutely
necessary—even in an economic downturn—and why it’s
in your prospect’s best interest to buy now.
4. Clearly demonstrate why an alternative choice is
not going to cut it.
Addressing these evils, and explaining why your
product overcomes them, will boost your response.
Likewise, ignoring these evils will depress your
Check back next week for part 2!
---Source: Craig Huey is the
Creative Direct Marketing Group (CDMG), a direct
response agency. Reach him at
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