Financial Clarity for Entrepreneurs

Surviving And Thriving In A Recession – Part 3

The beginning of the series can be found here.

This post is about marketing in a recession.

Don’t Be Timid

Businesses that survive and thrive during slow-downs, and become even stronger during recoveries, are the ones who aren’t afraid to go after growth when their competitors are hunkering down.

Preserving profits and cash flow is important, and cost management (see Part 2) is an integral part of your recession-proofing strategy, but sustainable long-term financial health can only come by increasing revenues.

Identify Ideal Customers

Every business has an ideal customer type and you probably already have some on board, although you could use more.  Take a look at your customers and see who is profitable, who improves your cash flow by paying on time and who doesn’t take up your valuable time by making unreasonable demands on your customer service infrastructure.

After examining your customers for the above, look for common characteristics. 

  • Are they large volume buyers or small? – a large group of small buyers can be very profitable because they don’t expect volume discounts.
  • Are they repeat buyers?  – why or why not?
  • Do they have similar demographics?  – age, gender, income level, etc. for consumers;  industry, revenue size, geography, etc. for businesses.
  • How did they come to be your customers? – referral, advertisement, walk-in, etc. (more on this below)
  • Do they tend to buy the same product or service?
  • {insert your particulars here}

Fire The Bad Customers

This may seem contradictory – firing customers at the same time you’re trying to grow revenue.  However, bad customers can not only suck up profits, but they can put stress on your business that you don’t need at this time.

Would you rather have a $1 million business with $100k in profits, work 80 hours a week and have stressed-out employees…or…a $900k business with $150k in profits, happy employees and time to spend with your family?

Take the extra time, money and energy you’ll get by firing bad customers and go find some good ones.

Find Out What Works For Your Business

Just about every business, from the smallest to the largest, has some marketing techniques that are effective and some not so much.  The trick, however, is to know which are which.

Start with the information you gathered about your ideal customers and see if you can determine which marketing efforts brought you the best customers.  Since you want more of these kind of customers, this would be the logical place to expand your efforts.

Test.  And Test Some More 

Gathering information and looking for patterns is just hypothesis forming.  You have an educated guess, but not real evidence. 

If you think an ad in a particular publication is pulling in customers, run it one week and not the next.  Rinse and repeat. 

The same can be done with online pay-per-click advertising.  And search-engine-optimization.  And…just about anything you can think of.  The key is to start out with an educated guess and then test to see if you’re right.

Ruthlessly Eliminate Ineffective Marketing

If you have marketing efforts that aren’t bringing in enough of the right kind of customers, STOP.  Why would you spend the time and money on activities that don’t bring in customers, or worse, bring in the wrong ones?

Chances are, you’re doing it because you don’t know which marketing activities bring in the good customers and which don’t.  If you do your testing, you’ll no longer be marketing in the dark.

See Make Your Marketing Budget Work—Halve It  for some more ideas on  eliminating ineffective marketing.

Use Guerrilla Techniques

Marketing doesn’t have to be expensive.  Jay Conrad Levinson coined the term and created the system called Guerrilla Marketing and has a wealth of advice on his site to help you create smart marketing on a tight budget.  I recommend signing up for his newsletter.

What’s nice about GM is that it works well in a testing methodology – you can experiment with several different ideas without spending a lot of money.

Here’s the wikipedia page for Guerrilla Marketing.  And here’s the official Guerrilla Marketing website with easy sign-up for the newsletter.

Now, go forth and market…smartly!

 

Leave a Reply

Your email address will not be published.