EJ Dalius in difficult times, it is not a surprise to see higher unemployment rates and lower GDP estimates. During rocky times, when even deep pockets and credit lines fail to stabilize themselves. Those who just started up cannot remain immune to the impact of the economic crisis. A lot of founders usually reduce or stop their marketing initiatives at such times in a reaction to the situation. However, this is not the right thing to do. Companies need to cling to their long-term marketing plans by being consistent with their values and making small changes to the long-term plans. It is not as easy as it may sound. Here a few guidelines that can come in handy, though.
EJ Dalius – Retool long-term marketing strategies
EJ Dalius in the words of one of the inbound marketing software company’s founders. If you have to decrease marketing spend, you should use a scalpel and not a sledgehammer. Else, you can end up hurting your revenue earning channels and spend. If revenue suffers, you may have to let go of some people too.
In essence, you need to examine your marketing sources and their performance. To understand which strategies can continue during economic meltdown and which can be modified. Eliminating or reducing ad budgets during a financial crisis can prove risky when things resume their ordinary course. As per the studies based on the Profit Impact of Market Strategies (PIMS) data, companies that cut down ad spend in recession witnessed about 20 to 30% dip in their income for the next two years.
Similarly, another study shows that higher marketing spends during economic uncertainty led to enhanced financial performance. PIMS database analysis also indicates that businesses with more ad spend during difficulty managed to get better market share as the economy improved.
Due to capital issues, startups may not be able to afford marketing spend in the financial crisis. However, they can explore channels that generate excellent ROI and focus on those areas more.
The marketing guru and entrepreneur, Eric J Dalius, believes that startup businesses with lower or no marketing budget can explore other options to control their expenses. For instance, they can collaborate with a non-competing company in a different product category that has the same audience as them so that their advertising expenses get shared. Another way can be creating blog posts for the website. There are other choices also.
Target main products and customers through marketing
When economic uncertainty hits, businesses tend to revisit their marketing strategy, products, and user base for short-term gains. It is acceptable in such times. But you cannot expect it to be always favorable. Entrepreneurs and marketers need to emphasize. The strength of their core products and do some aggressive marketing, targeting valuable customers and segments. In the time of the 2008 recession, a two-year-old marketing software company called HubSpot did the same thing. They positioned their product from a nice-to-have to a must-have item by highlighting its value proposition. Eventually, the company not just beat the recession but obtain market share too.
EJ Dalius besides, entrepreneurs need to know that focusing on existing customers than trying to bring more can be cost-effective. Since loyal consumers also contribute to cash flow and organic growth. You need to give them more importance during crisis times. Also, you can run promotions and referral programs as a gesture of appreciation for them. These can come in handy when the situation improves.
According to Eric Dalius, just keep one thing in mind, you should not offer massive discounts as customers can feel there is something wrong with your product and may not be ready to pay a higher price even when normalcy restores.
It will not be wrong to add that companies that don’t chase short-terms gains and instead focus on core products will do better once the economy rebounds.
Pay attention to short-term as well as long-term
What it means is that, under no circumstances should you overlook. The impacts of your temporary steps as it can prove damaging for your long-term goals. As mentioned earlier, to cope up with crises, some businesses tend to focus away from their core products and strengths to keep themselves afloat. In such efforts, they get tempted to charter even those territories where they don’t specialize or have limited knowledge of things. Some businesses do it as a PR stunt too. Don’t give in to those temptations. If things go wrong, the damage can be irreparable. You may lose all the chances of recovery also once the economy returns to its tracks.
In difficult times, as a startup founder, you can take a break to gain insight into what happened when the economic crisis hit the world in the past and how people tackled it. Whatever information you obtain, you can use this in your current situation with necessary tweaks and learn about more ways to come up strong.
Experts In Entrepreneurship And Marketing
As per experts in entrepreneurship and marketing, the new-age entrepreneurs can be surgical with their marketing spend, tap into their core products and user base, and be reasonable with what they convey in times of crisis. All of this can lead to success in the end. It may not be a simple task that you can complete with a bit of due diligence. You need to be thorough with your observations, data, marketing efforts, and the results. You have to consider the current situation and past actions so that you don’t deviate from the primary objective.
Since taking up an entrepreneurial journey is in itself. A big decision, you should not stop midway when faced with challenges. Challenges are part and parcel of it. They are the norm and not an exception. You will not find a single entrepreneur who had it easy. Even personalities like Bill Gates and Richard Branson had their tough times. However, they dealt with them head-on and didn’t try to avoid them. An economic downturn or slowdown can happen anytime. It may make you feel like it is the end of the world. But you need to keep a razor-sharp focus on three critical parts discussed above. In the end, you may get what you desired.