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Better, Smarter & Cheaper in a Recession, SI Review September 2009

By Mark Hersberger

Is that how you see the marketing budget at your company -- as an expense that sucks away the revenues that sales brings in? During a recession, when every last dollar is exponentially more critical, it's understandable that such a viewpoint might creep into your thinking.

In reality, this isn't the time to drastically cut or even eliminate marketing. It's more critical than ever, and this article explains ways to do it better, smarter and cheaper. We'll examine how to reposition yourself in the market, get more from your marketing dollars, reorient the goals of your marketing programs, keep existing customers and even reveal a head-spinning way to win new business.

Why Marketing Still Matters

In times like these, the essential question becomes: If customers aren't buying, then why should I market to them? It's a legitimate question, though one that is inherently flawed. To give up marketing all together is to essentially concede that the market has completely dried up and there are no customers left.

Therefore, you must continue marketing for no other reason than to prove to customers that you are still in business. In separate interviews, two marketing experts -- Miro Copic and Dub Anderson -- said essentially the exact same thing about marketing during a recession: Companies that bury their heads in the sand and disappear will not survive. Companies that remain visible in front of clients will make it through the recession and be the first ones called when conditions improve.

Though marketing is still essential during the recession, the playbook has changed. The old way isn't going to cut it. Before venturing into the new staffing marketing landscape, however, let's first step back and remind ourselves what marketing means. It's more than just sales and it's more than just advertising. Marketing encompasses the whole spectrum of sales, communications, pricing, service offerings and more.

Why Staffing Still Matters

Service offerings and pricing strategies are two of the most important elements to consider during a recession. "Are you marketing what customers are buying?" asks Anderson, whose Atlanta-based marketing firm specializes in the staffing industry. His bigger point is that what your clients need today is vastly different from their requirements one or two years ago. "Customers may not be buying temporary labor in ways they used to. They have moved on to needing services specific for the recession."

When times are tough, all marketers must refocus on their customers' most basic requirements: the elements that are absolutely critical to continuing operations and surviving the downturn. Distinguish between the customers' needs and wants, and how you can fulfill them. Needs are the absolute must haves, while wants are nice to haves. It goes without saying that the nice to haves are being cut at virtually every company. "The perceived needs a company has in good times may not be the same perceived needs they have in a downturn. Find out what your customers need to get through the rest of the year, and find a way to deliver it to them," Anderson advises.

He adds that the current environment makes it more necessary than ever for staffing customers to put more into researching the market. "Staffing companies need to become economists," Anderson states. "They need to focus on the numbers that are critical to a client in a downturn and align their sales pitch as solutions to those numbers."

Crunching the numbers, as Anderson suggests, is a must, but so is a return to the basics, which includes talking to and interviewing potential clients. "Far too many companies are still sitting around their conference room trying to read the minds of their customers," Anderson laments. "What they need to do instead is go back to the basics of knocking on doors and talking with customers."

These extraordinary times are also forcing staffing companies to rethink their outlook. "The challenge to staffing service owners is to consider their own company as an economic enabler and not just a supplier of skill sets," observes Anderson. "It is a repositioning in the mind of the owner about who they are, and a repositioning to the client of how they think of staffing services. Both owner and end user historically think of staffing in a narrow band way. Customers think of staffing companies as suppliers of temporary talent. They should think of staffing strategically as critical economic components of their operations."

Cut Spending or Spend Smarter?

We'll explore some low-cost and no-cost marketing techniques in just a minute, but first let's examine how we're spending marketing dollars and what we're getting for our money. During a recession, the knee-jerk reaction is to, of course, cut spending -- especially marketing spending. But think twice before you close the purse strings entirely. Several studies show that companies that increase marketing spending during recessions continue to grow, both during and after the downturn. Furthermore, those that wait until after the recession to reenergize their marketing realize no gains from their efforts.

So, you still need to spend, but because of decreased revenues, you've got less to spend. Miro Copic, who is a senior lecturer at San Diego State University and the founder of BottomLine Marketing, is quick to point out that there exists a critical tipping point to where if you scale back marketing spending enough, the reduced impact is equivalent to not spending anything at all. The money you do spend is essentially wasted.

That's quite a conundrum. The solution, however, is to be smarter with your money. "There are tremendous opportunities in marketing today that would have cost a fortune in the past. Because the downturn is so pervasive, almost all marketing mediums are heavily discounted," explains Copic. "It's a buyers market, and everything is negotiable."

Start with your primary marketing partners, such as the ad agency you use (if you even have that luxury in the first place). "If you're working with an agency and it's a meaningful, productive relationship, and it truly knows your business, then it will know that you're having a hard time," Copic explains. "And in that case it will be open to some sort of renegotiation in much they same way you are with your customers."

In terms of what's reasonable to expect, Copic estimates that any marketing operation can afford to cut up to 5% of its spending in a given year, and 10-15% in things are really difficult. If you're finding the necessary cuts are deeper than that, one of two things -- or both -- are likely true: You were very inefficient with your marketing programs and partner relationships to begin with, and/or you're reaching the "tipping point" of getting no results for your spending.

Another way to better spend your money is to keep up with emerging technologies, like online marketing and leveraging the powers of social media. It's a Facebook, Twitter-driven world. And, if you don't recognize those brand names, Google them immediately because they are redefining how marketing is done. "Messaging is inherently shifting to the Web, which allows you to spend less and have a bigger presence," notes Copic. "I would encourage all staffing companies to try to engage their target audiences through social media. The tactic may not be for everyone, but you need to at least explore it and make a determination for your business."

Finally, Anderson urges companies to first determine what they want to do, and then set the marketing budget. "A marketing budget shouldn't be determined solely as a percentage of sales," he comments. "Look at what you want to accomplish and how much it costs to do that."

Realign Your Marketing Goals

As Anderson alluded, before setting your marketing budget, determine what you want to accomplish. Note that marketing programs don't necessarily need to result in acquiring new customers. Theodore Levitt, the late Harvard Business School professor and scholar credited with coining the term "globalization," presciently stated that the purpose of a company is to "create and keep a customer."

Take the second half of Levitt's proposition to heart and work harder than ever on customer retention. A myriad of statistics support the notion that it is significantly more expensive to recruit new customers than to retain existing ones. Well-rounded marketing programs focus just as much energy -- if not more -- on keeping loyal customers coming back year after year. "The absolute number one thing to do during a recession is to keep current customers happy," says Copic.

There are several ways to keep customers. It starts with focusing on customers' needs, and from Copic's perspective a good way to do that is to emphasize your core values. Concentrate on what won the account in the first place and make fulfilling that promise your overriding goal with the customer. "Reinforce the strengths and core elements of your relationship any chance you get," Copic advises.

Next, be the type of partner that is going to help the client get through the downturn. That may entail an upfront hit on your bottom line, but it could be well worth it when business picks up. "If your client asks to renegotiate, and you are able to accommodate it, that is huge for customer loyalty," Copic observes. "It's also an outstanding opportunity to refocus on your brand messaging and why you are such a valuable partner to the customer."

Emphasizing core values, fulfilling needs and being a trusted partner all add up to further burnish and enhance your reputation from the customer's perspective. "Once you've established yourself as the preferred partner who can be a key solutions provider in getting through the downturn, then you'll remain top of mind in their consideration set and hopefully win new business from them when the recession ends," Copic explains.

In addition to customer retention, branding building and brand awareness can also be outcomes of marketing programs. These are the types of programs that, rather than including a specific inducement to purchase, are more informational and educational. Such campaigns portray important elements -- like your core values -- and emphasize who your company is and what you stand for. "When you're doing an awareness campaign, you want the audience to come away with two or three critical messages that sum up who you are," Copic explains. "The goal is for your company name to stick in their mind and rise to the top of their consideration set."

Anderson adds that marketing research shows that people have trouble remembering more than seven items in any given category, and most struggle to remember just three items. "I'm betting there are a lot more than seven staffing companies in your local market," Anderson surmises. "So if you're relying on people's memory, you've got to retain a consistent and persistent presence."

Raising awareness and persistent messaging flow directly into the third way to market during a recession, and that is to remember to take a long-term view. "To simply look at marketing efforts and hope for an immediate return on investment is a mistake," Anderson cautions. "I've seen so many campaigns where nothing happened immediately, but three, six or even 12 months later the orders starting coming in. I know it sometimes feels like you're throwing money out the door with marketing and not getting any return, but to expect it back immediately means you're taking an extremely short-term view of business. As difficult as it is, you must prioritize the long term."

The key is finding the messaging strategy that is sustainable for the long term. A lot of things make an immediate impression, but what still resonates several weeks or months later? "Try to think of marketing that has a life," Anderson suggests. "Then, connect it with something that's on target with the buyer's needs, and there's a good bet the efforts will have a long-term effect."

Marketing Strategies with Life

If you are willing to put in the time, energy, and effort, there are several activities you can do to build your brand awareness and find marketing strategies with a life -- and none of them involve paying for ads, collateral or mugs.

As we noted at the outset, how you present yourself in a recession determines how you'll be perceived when the economy recovers. Do everything you can to stay visible in the minds of influential people and decision makers. Note that many of the methods described below may not seem like they have anything to do with sales -- but that's okay. "Communication covers a lot more than selling," Anderson notes. "Too many people make the mistake of talking and communicating only when there's an imminent buying opportunity."

Publish an e-newsletter.
Put all your existing clients and anyone else relevant on the initial circulation list (just be sure to provide an easy opt out, too). Then, keep track of both national and local staffing, employment and labor developments. Cover topics like changing laws and compliance requirements. The more localized and targeted your reporting is, the better. Distribute it consistently, whether that be weekly, monthly or even quarterly.

Join the lecture circuit.
Every town has a litany of civic and business clubs, including a Chamber of Commerce, Rotary Club or SHRM chapter. Organizations such as Rotary meet weekly for lunch or breakfast and always feature a keynote speaker. That means the harried program director is constantly searching for someone to speak on a variety of topics. Keep in mind that it's usually taboo to speak directly about your company, but what you can do is talk about staffing in general or local labor trends. Additionally, organizations like SHRM or local workforce development agencies usually host workshops and other professional development courses designed specifically for recruiters and human resources personnel, which is your exact target audience.

If you can't go to the people, bring the people to you by conducting seminars that you put on. Anderson reports that one of his clients has been very successful hosting such seminars and invited human resources managers or other influential people. There are some costs incurred (renting a hotel conference room, for example), but nevertheless it's an amazing opportunity to put yourself in front of the target audience.

Make news or be a source.
Think for a moment about all the column inches or airtime that local newspapers and television and radio stations must fill. You could play a key role in helping them by both informing journalists of news and availing yourself as an expert source. Find out who the local business journalists and editors are, introduce yourself and let them know you're available to comment when labor or employment news breaks. Before making contact, though, be sure you're current on the latest facts and trends, such as local unemployment data. Also, keep in mind that journalists work on extremely tight schedules, so if one calls asking for a comment, be prepared to drop everything and accommodate the request.

If you're having trouble getting considered as a source, "pitch" stories whenever news breaks. Do this by both issuing a press release and calling the respective news desk. Once you've forged a good working relationship with the media, offer to provide original content. A great start is the Sunday employment column that accompanies the help-wanted classifieds. Anderson comments, "I've always urged staffing professionals to invite the business editor over for lunch and show him or her how your staffing firm works and the industry saves clients money. Using the local press is one of the real neglected pieces of marketing."

Publishing an e-newsletter, conducting seminars and being quoted in the paper accomplish two things. First, they keep your name and your brand visible. People know that you exist and that your company is still in business. Second, this publicity positions you as a subject-matter expert. It says to people that you know what you're doing. "You essentially establish yourself as the knowledgeable source of work information in that market," Anderson explains. "And when people think of that subject, they'll think of your company."

Invest in your community.
One other excellent tactic, though in a slightly different vein, is cause marketing. Any time your company is visible in the community, consider it a marketing opportunity, from sponsorship of a charity event to a sign at a Little League baseball field. As we've been discussing, these opportunities have life, from that sign at the Little League field to your company logo on a t-shirt that participants keep for years and years. Additionally, community service events often draw media attention, and if you're organizing it or sponsoring it, reporters are going to want to talk to you first.

It gets better. Cause marketing introduces your name and company to completely new audiences that may have previously been unreachable. By extending off the business page and onto the community or local page, you're tapping into an expanded audience -- and you never know who's reading. Also, cause marketing both softens and enhances your public image. Coverage of cause marketing is almost exclusively positive. Furthermore, people like doing business with companies that give back.

How to Win New Business: Be a Lifeline to Sinking Companies

Up to now, we've talked exclusively about maintaining current customers and keeping your name visible to benefit when the economy recovers. Read on because there are ways to win new business. But to win it, you'll have to completely change your frame of reference. Are you ready?

Target the companies that are in the worst shape, and sell them on the idea that staffing can save their business.

"All these companies that are struggling want to be in business -- nobody just wants to give up and quit. They want to get through it!" Anderson explains. "And if companies are still in business, then they have living, breathing people working for them. This is a grand opportunity for staffing companies to be that life preserver that keeps companies from drowning. Instead of walking away from firms that aren't doing well, the staffing industry should approach them in the same vein as a turnaround specialist to the extent that productivity and staffing costs are an issue. Find out what they need to survive, and show that effective utilization of staffing services can be the life preserver."

Going after companies on their way down may seem revolutionary, counterintuitive, or even suicidal, but it's going to take that kind of thinking to make it through the recession. "I often say that a tough time like this is the mother of invention," Anderson comments. "But it's also the time to think in totally creative ways, and try things you've never dared try before."

Mark Hersberger is a freelance writer who covers the staffing industry and employment and human resources issues. He can be reached at markhers@hotmail.com.