When budgets get squeezed, keep the best

Communication is often more targeted and reaches audiences with greater direct impact. Still, the squeeze is on communications budgets, perhaps not as noticeable at the very large corporates but certainly among the medium-size companies and smaller family-owned and entrepreneurial outfits.

Interestingly, a small but significant signal that times are tougher is usually the home mailbox. Since early this year unsolicited mail has been coming thick and fast. All the professionals - and not so professional - are hunting business: flyers have come from plumbers, painters, electricians, tree fellers, handymen, florists, estate agents, insurance companies, loan sharks, investment gurus, and all sorts of new small, one-person-and-their pooch businesses. The free classifieds are also back. We haven't seen this sort of promotion vehicle in our neck of the woods since the last recession. The political and economic propagandists continue to tout 2-3 per cent GDP growth. What you read in the papers often doesn't quite reflect the reality on the street where you live.

A large number of these professional service providers, the ones pushing hardest now with the flyers, direct mail letters, and mail box stuffers, are probably those who didn't do quite a good enough job of looking after their customers when there were plenty around and business was fast. It takes time to build meaningful business and those who treated their customers well with excellent service can reap the harvest of their carefully nurtured, caring and diligent work.

We've left out all the many promotional specials that come via the e-mail and the incessant 'phone calls from advertising reps, consultants, photographers, web specialists and designers. Some of the same principles of buying products and services apply to the home as they do to business-to-business transactions. There's nothing wrong with cold-calling as communicators may find something new that could help their communications activities. But you often get a little suspicious about some of the cold callers - why are they fishing for business now when they should be looking after the clients they've gained in the good times?

If your communications budget is under pressure right now it could be because forecasts were on the optimistic side for 2003. Last year was the time to set the communication objectives and plan the budget for this year. Some communicators would have already then cut their cloth accordingly, not hiring additional personnel, prioritising campaigns to the most essential with the best impact, and even scaling down on suppliers that tended to load invoices with extras in the fat times.

But it's not too late to do something about it now. It all starts with focus and priorities. Perhaps it's time to look through your communications plan and see what's really working and what it not. It's harder now to get communication research through the budget so, where you can, you need to look through your communication vehicles and see which ones should be kept, canned or placed on hold until things look up.

Knowing how and what to communicate is becoming increasingly difficult in a world where people are becoming lost in data smog and have very little time for most things. Effective communication is now critical and the amateurs leave this profession fast as the demands are increasing tremendously. Remember that getting through to people now in any form of communications is much more difficult. Just let your mind curl around this statement: "More information has been produced in the last 30 years than in the previous 5000. A weekday edition of the New York Times has more information in it than the average 17th century man or woman would have come across in an entire lifetime. About 1000 books are published internationally every day, and the total of all printed knowledge doubles every five years," Dr David Lewis. Enough said.

It's a good idea to closely watch what your competitors are doing. Have they increased or reduced their communications spend? What are they doing differently? Where are they placing most of their communication money? Talk to your suppliers, get out to exhibitions, watch their websites, get copies of their communications literature, and you should find some profitable clues.

Good companies look after their suppliers just as they would any other partner or stakeholder. But in tight times you have to evaluate what kind of service, communications impact and the cost of what you are receiving from existing suppliers. Getting back to basics, calling for the standard three quotes on creative work is a good idea, especially if your budget is coming under pressure. It's amazing what some new suppliers will do for you - those who are really passionate about your business - and in the end, it's increased "bang for buck" that you're after.

This brings to mind a telling detail from legendary retailer Raymond Ackerman's early childhood noted in his book "Hearing Grasshoppers Jump". As he and his brother where brushing their teeth their father told them they must always push the tube from the bottom upwards so as not to waste toothpaste. "Whenever I squeeze a tube of toothpaste today, I push it from the bottom." Frugality has always been important to business and those who aren't mindful of it pay a heavy price in low profits and even eventual bankruptcy. Even with communications expenditure or perhaps better termed "investment", communications practitioners need to remember that for every R100,000 spent, at a net margin of say, 10 per cent - and this, by the way, is stunningly good in some industries - you need to do R1-million worth of revenues. So we need to take extra care that the money we put into communication activities, is going to work for our companies and clients.

In leaner times hiring the best when it comes to communications is vital. The largest part of a communications programme is the cost of personnel - the salaries of staff or the executive fees of consultancies which, allowing for overheads and profit, are often similar. In advertising the executive part of the budget in any campaign might be 10 per cent or less. Communication differs in that the executive element in a comparable public relations campaign, is likely to be 50 per cent or more, notes seasoned practitioner Roger Haywood.

It doesn't make sense to cut back personnel in professional areas that will be fundamental to the success of the organisation. A simple rule is: always go for the best possible. Using lower calibre personnel will mean that your communications budget will be used less efficiently. A good communications person will make a substantial difference to the success of the programme because of the quality of advice she or he offers. This advisory element often does not require major operating budgets.

Quantified objectives, which must stem from your company strategy, are key to any communication activities. All expenditures must be justified by return on investment (ROI) or rather drop it.

There's more to communications budgeting and expenditure than we've been able to cover here. But we've tried to highlight some of the headline points. A crucial consideration when preparing your strategic analysis is to make sure that you know the lifecycle of the product, service or organisation. This is the helicopter view you need. What type of communications activity you have planned or are currently running depends very much whether the company is in an introduction, growth, shakeout, maturity or decline stage. The need for communication that opens new markets and relationships at the introductory stage is very different to a mature stage where holding market share is critical. A decline stage where one would be harvesting before closure may only require a basic level of communications. Regenerative growth would require stimulatory communications.

In the current economic climate it's probably better for most to lean towards the conservative and build existing relationships, be ultra sensitive to problems, and sort out communications issues quickly than go on an aggressive new customer acquisition programme or new stakeholder relations campaign.

If you don't get these parts of your communications right, you can go quickly from low budget to no budget. The end game is, of course, not to see the "Game over" message flash across your screen. Avoid slow or sudden death by correct planning, insightful analysis, brilliant creativity, and, most importantly, detailed execution, execution, and execution.