It’s no surprise that small businesses are getting hit hard by the economic downturn. This creates both an opportunity and a challenge for marketers of financial products and services, as small business owners are now on the hunt for the best deals — but are increasingly skeptical of financial institutions.
Gal Borenstein, CEO and chief strategist at b-to-bmarketing agency The Borenstein Group, says the last six months have been “the era of broken promises.” For the first time in a century, he explains, “the small business owner is in a situation where they feel like they can’t trust anyone, especially their banks and credit card companies.”
Small business owners are also thinking more closely about the purchases they’re making, says Stuart Robertson, general manager of ING Direct’s ShareBuilder 401k, which markets specifically to small businesses. “The needs haven’t fallen off, but the conversations we’re having with small business owners are definitely changing,” he explains. “They’re asking, ‘How much is this really going to cost?’ and ‘Is now really the best time to make a purchase?’”
One of the most important things marketers need to understand when trying to reach small business owners is their mindset, says Borenstein, adding that these decision makers are much more likely to choose the safe choice over the best choice.
“If two credit card companies are offering me 0% interest to lure me, I may at this moment choose the biggest provider as opposed to the one with, say, the best customer service,” he explains. “The reason is that I simply don’t know if [the smaller provider] is going to be there tomorrow.”
One way direct marketers are reaching out to these consumers is through social networking initiatives. “The influence of testimonials and case studies in the small business environment is spiking higher than I’ve ever seen ever seen before,” says Todd McNab, account director for Aspen Marketing Services, which has worked with such financial services companies as SunTrust and Capital One. “People want to know there are like-minded individuals that have the same cross to bear, whether it be economically, generating new business or organizing their finances.”
Bob Vevang, SVP and director of client services at Aspen, says, “[Social networking] is an efficient way to reach your audience frequently. In uncertain times this is important so the consumer knows you’re stable and still there for them.”
Borenstein agrees that real-time communication is imperative. He gives the example of taking a client out for a meal, only to have credit card declined.
“As it turns out, the person’s credit card limit had been decreased, but direct mail notification had not yet reached the cardholder,” he explains, and estimates it would cost that company 10 times more to get the small business owner to trust it again once they had that experience. More than ever, he says, marketers need to make sure crisis communications and changes in policy are properly being communicated.
“Consumers understand that Wall Street is melting – so they will understand if their credit gets cut,” he says. “But credit card companies need to communicate it in real time or through direct marketing, which you can do really quickly. That is a huge gaping hole that’s likely to cost credit card companies many customers.”
Marketers are also working harder to stretch their marketing dollars. “They have less money to spend, frankly, so they may not be able to do the follow-up mailing or e-mails that they would have done in the past,” Vevang says. “So now you have to make two pieces work as well as one piece.”
He adds that even customer service-related communications are evolving. “What used to be a simple ‘thank you for signing up for online bill pay’ or ‘thanks, your payment has been received’ message, [is now] doing double the work as well,” he says. “It’s incorporating a lot more of the marketing message by either cross-selling a product or creating a pass-along program.”
Robertson says an integrated approach is best when reaching small business owners. When reaching out to prospective buyers, ShareBuilder 401k uses search engine and landing page optimization, partnerships and cross marketing — 50%, 25% and 25%, respectively.
Rob Joyce, sales manger for digital agency Acxiom’s financial services group, says mixing multichannel items together is key. “There’s been a lot of multiline direct mail going to homes and offices, as well as channel integration,” he says. “You might do a direct mail, followed by an e-mail, followed by a phone call from a personal banker.” The open rate, he explains, will likely increase based on the number of touch points the marketer hits.
However, at the end of the day, marketers say that even though consumers are pinching pennies, nothing beats relevancy.
“Regardless of the touch point, the content has to be relevant,” McNab said. “Many financial services companies are running toward the stable message, which is extremely important, but it doesn’t discount the relevancy factor that will push your product, brand or service above the other companies. The impact of offering a product or service that’s relevant is no less important today than it was years ago when everyone was high flying.”
Joyce concludes that marketers need to stay the course. “It’s a great time to be at the market,” he says. “The ability to recognize [a consumer] as a good customer and treat them right is something they’ll appreciate. It’s a challenging economy so to come out and give them a great offer when others [aren’t], could give you a loyal customer for a long time.”
http://www.dmnews.com/Secure-small-biz-trust/PrintArticle/127023/
Top Ten Strategy Tips for Marketing During the Recession
As we feel the pain of the downturn recently inflicted upon our economy-and as key support companies such as Banks, Manufacturers, and even agencies suffer, here are ten key strategies that you can immediately apply to your marketing and advertising infrastructure-to help you reposition for success:
1.The Marketing Budget: An Opportunity to Realign & Take Advantage of Weakened Competition. There is a recession but actually what we are seeing is that smart and savvy companies are taking advantage of just that to build market share at the expense of their competition. What is a better time to adjust to an aggressive position in terms of ROI when your competitor is delivering empty promises?
While I know how it feels to be on the inside for budget cuts, I think web 2.0 and direct marketing activities are now aligned with the market, if your message does not stay theoretical. In other words, if you have the elasticity in your budget to redefine what is “critical”:
•Cut and reallocate printing costs to use more electronic literature with “piggy-back lead forms”.
•Shift 50% of print ads to online ads where you can cut predetermined expense to performance-based expense.
•Use PR as vehicle to deliver mass distribution of that message and use it as an advertising platform tool.
2.Pay special attention to the backlash against what old economy clients may perceive as ‘fun’-versus more down to earth and solid messages. When you consider which colors or names to use with your XYZ application, think now about business benefits. By calling your software “LemonHead” for example, you are inviting Internet-ridicule among mission-critical decision makers.
3.Reposition yourself as a ‘Horizontal Generalist’ vs. a ‘Vertical Specialist.’ Yes, while most marketing experts recommend ‘market focus,’ chances are that-unless you can deliver true value in more than one vertical market-you will have less opportunities and more competition. This does not mean that you should abandon your laser-sharp focus on each solution you market. It just means you need to start thinking about casting a wider net.
4.Bring key management to the forefront of your marketing presentation. If there is one thing we’ve learned from the recent economic downturn, it’s that great ideas without experience are worthless. Many of the ads we’ve seen over the last couple of years have been focused on selling ‘hip’ and ‘cool’ guys on motorcycles. But now is the time to leverage the gray hair in your organization and bring it back to the forefront. Your seasoned experts will sell experience and proven performance over youthful and fun indiscretions.
5.It’s not about being faster-to-market anymore. Most tech companies clamored to deliver their product or service in record time to the marketplace-and they claimed their score as a key benefit. In reality, what they delivered failed to perform, or failed to be effectively supported for lack of a solid customer relationship management model. To be successful in this new environment, emphasize your caution, your proven beta testing results, and your user testimonials. These tactics will benefit your advertising message more than ever before. No one wants a half-baked cake. Not now.
6.Reposition your brand as the ‘best customer service provider to your market.’ Now is the time to downplay technology features and highlight your advertising and marketing messages with tangible examples of how your company services your clients better. This approach will also help reinforce the loyalty of your existing customers, who are now fair game in this fiercer jungle.
7.Reposition your tagline to reflect a true business meaning. In the age of no-sense-at-all, technology companies possessed corporate taglines with a lot of attitude, but with little to do with what they actually sold. Now with tighter advertising dollars, you can’t afford to make such mistakes. Go back to the classic function of what taglines were meant to do: inspire confidence in your company and tell your story in shorthand.
8.Look beyond the convention for new market opportunities. For many technology companies, the best market opportunity is awaiting overseas. The fact that your local market is saturated does not mean that it’s the same in Europe, Asia, or Africa. It might be a great investment to conduct an international needs-analysis and attempt to match up key demand in foreign markets for your code, system, or service.
9.Leverage other people’s money. In the past three years, I have had the unfortunate opportunity to see many technology companies spend/waste valuable co-op dollars from their largest suppliers on golf balls, coffee mugs, and cute little ‘stress toys.’ Instead, you could look at this money as the best opportunity to invest in strategic direct mail campaigns that could actually generate timely leads for your business development department. Don’t get me wrong; you still need the ‘executive cubes’ and rainbow paper-clip holders for the sales appointments that your direct mail generates. But not for the freeloaders who stopped by your booth at the last trade show.
10.Make it simple for people to say ‘YES.’ Without mentioning any names, I recently attempted to get a pricing quotation for a broadband connection based on a special offer I heard on the radio. I followed the ad’s instructions, logged into the company’s web site, and placed an inquiry. A follow-up call came twelve days after my e-mail was sent. Imagine the representative’s surprise when I informed him we had already made our decision with a company that answers the phone. The lesson learned: send people to the web for information, but always introduce a human element into the process as early as possible, to achieve maximum prospect-to-client conversion.
In sum, common sense in marketing is making a comeback. Big time. Apply some wisdom to your company’s branding and advertising efforts, and you could be pleasantly surprised to hear your customers ask: “Where have you been all these years…?”
Filed under: Commentary | Tagged: Advertising, Branding, budget cuts, competitive positioning, economic downturn, marketing during recession, marketing mix, marketshare, opportunity, PR | Leave a comment »