Economists widely agree that the end of the recession is in sight. In July 2009, Business Week published that the US recession was at an end and that an economic upturn had started. In September 2009, Rand Merchant Bank published that South Africa should emerge from the recession in the third quarter of 2009.
This month, BANKSETA published - with regards to banking, finance and insurance - that although the end of the recession is in site, South Africans will not feel the release of its grip for the foreseeable future.
One of the worst mistakes companies can make is to cut costs by disappearing out of the media and becoming invisible. It is the surest way to move into a negative spiral.
The solution is to embark on a cost-effective marketing drive. Smaller agencies are often willing to accept payment on 30 or even 60 day terms, whereas bigger agencies normally require payment upfront.
These smaller agencies can most often deliver a very similar service, provided that the right agency is chosen. When choosing an agency that is not a brand name yet, it is important to look out for the following:
When the above requirements are in place, chances are that the agency will be able to deliver a similar quality service in a much more flexible manner and probably at a fraction of the cost, when compared to other agencies which do not comply.
Even through a smaller agency, however, marketing costs can easily detract from nett profit as it adds to the operating expense. Every business owner, accountant, executive or manager will know how quickly marketing budgets can run away with you.
There are, however, cost-effective ways of doing marketing.
The first step is to know exactly who your target market is and to cut out all waste. For example, it does not help to communicate through a billboard to everybody driving on the N1 while only 1% of the commuters will make a buying decision to purchase your product or service.
Once the target market has been defined, a database of all decision makers should be compiled and regular valuable communication should be embarked upon while avoiding spam pitfalls. A direct email communication to decision makers will result in immediate results at a highly cost effective price. The provision is that the content in the mail should provide relevant, succinct and interesting information. The new regulations in the Consumer Protection Act should be carefully adhered to.
Social media is another way to spread your message in a cost-effective manner, simultaneously driving traffic to your website and enhancing the website's numerical position on relevant search engines. Such social marketing can include a Facebook or Twitter profile for a product line, a small video on YouTube, a blog or may be as simple as a listing on online PR directories.
With consumer marketing, it is not as simple as the target market is much bigger, but there are still alternative ways to get the message across. The cost comparison between a billboard on the highway and 32 street-pole advertisements will show that the message can be spread much further at a fraction of the cost.
A viral campaign with a very small video on YouTube being emailed to various consumer groups is very cost-effective and is about as effective as a TV commercial without the irritation value.
“The video has to contain the X-factor, however,” says Steven Hall from Free the Orange. “The X-factor is what makes people send the video to everybody they know. It has to contain humour, be emotionally charged, or contain highly topical information”.
The normal marketing channels will always be necessary, but even when using the traditional print, TV and radio marketing channels, money can be stretched through agencies buying media space direct, cutting out commissions.
At this time in the recession it is possible to negotiate placing advertising in alternative issues, while submitting high quality editorial for the in-between issues. While there is no guarantee on editorial placement, if the quality is good, the content is free and a good photo could clinch the deal.
What is important is to look for the unusual, out-of-the-ordinary ways of communicating with the target market in a cost-effective way. It takes more creativity and energy, but to succumb to lower marketing budgets and disappear out of the media and the minds of the market is business suicide.
The trick is to choose an agency which will provide a high quality service and put in the extra energy to save money and then to execute in a manner that will speak to the decision makers with minimum waste and that will communicate a clear message that will mobilise buying decisions. This is more favourable than building a huge budget, with no aligned strategy and a huge wastage of spend.
That is, of course, if your product fulfils a need in a target market and pricing is in line with market standards. No matter how economical your marketing campaign is, if you cannot operationally fulfil on what you are selling, the entire budget will be a waste.
