Small Business Marketing Tips for Increasing Profits in a Down Economy

When I watch TV, listen to the radio or happen to flip through a magazine, I like to pay attention to the ads to try to see if they make any sense. I’m one of the weird marketers who thinks the primary purpose of an ad is to increase sales.  If brand awarness is also heightened, that’s a plus.

I’ve had a lot of high paid marketers tell me I’m full of it and that I don’t realize the value of a brand.  To me, the value of a brand is in the sales and profits it generates, not in how many people recognize the name.  I live in Cincinnati, Ohio, USA, which is home to the largest advertiser in the world, Procter and Gamble.

I’ve heard the CEO, A.G. Lafley speak and have read several quotes of his.  When he speaks, he talks about company profitability and sales.  He mentions brands as they contribute to profitability, not how they increase the awareness of the P&G name.  I pay a lot attention to P&G ads.  Every one of them highlights the benefits of using the brand.  Whether it’s whiter teeth, cleaner clothing or cleaner floors, the ads promote what the brand will do for the consumer.  The brand is built and strengthened and more people buy it because it works, not because they’ve heard about it!

The lesson for you, the small business owner/marketer is to realize your ads have one purpose and that is to  generate sales, not awareness.  When the creditors are at your door, you’re paying them with money, not a brand name.  Next time an agency or media rep tells you about brand-building, say “Great!  How will I track sales results from the ad?”

In a slow economy, it’s not time to cut back on marketing or advertising, it’s time to make sure you’re getting a good return on it.  Market smart.  Write good sales copy.  Make your marketing work for you.  Let your competitors build their brands. You can say hello when you are at the bank making deposits resulting from your marketing while they are making withdrawals to pay for theirs.

Small business marketing tips to profit in ANY economy

Quote from Mr. or Mrs. faltering business owner, “Oh no, the economy is “bad” I better not buy anything. I better cut back on my marketing. I think I should save my money just in case the “bad” economy cuts into my cash flow.”

Does this sound familiar? Let’s move forward 6 months and ask Mr. or Mrs. faltering (soon to be failing) business owner, “How’s business?” They will reply “Oh this economy is killing me. Sales are way down. I’m not getting any new customers and I hear from fewer old customers than I used to.”

I say, “Hmmm, Mr. Owner lets look at a few other factors. Last year in the first quarter, you spent $10,000 on marketing and this year, $1,500. Last year, you sent your newsletter out monthly and this year, you cut it from the budget. Last year, you conducted sales training every week but this year, you decided the trainer was too expensive. Last year, you sent every client a thank you card for visiting the store and also sent out birthday cards. This year, you cut it from the budget.

Now, let’s look for the underlying cause of your sales shortfall. Because the media telling you the economy is bad and people are not buying, you slashed your budget on strategies that brought you clients, sales and profits.”

Hey, I’m a realist! I’m aware that the economy is faltering but the worst thing you can do is to stop marketing. If you are going to cut marketing, cut the marketing that is not delivering a measurable, positive return. If you don’t know your return, you need to calculate it. Drop useless image advertising that doesn’t deliver clients or prospects.

Learn and implement direct response marketing. That’s the marketing you see that has an offer and tells the prospect to act. If it’s good, you get a response and make money on it. If it’s not good, nothing happens and you lose money on it. Set a system to measure and track results. Determine your ROI and remember client lifetime value. If you break-even or lose on the initial transaction but know the client will be highly profitable over the next year, that’s good!

The lesson here is simple. A down economy is a bad reason to cut good marketing and a good reason to cut bad marketing!

The strangest secret by Earl Nightingale

Shortly after graduating from college in 1982, my brother-in-law gave me a cassette tape to listen to. It was by a man, I’d not heard of before. His name, Earl Nightingale. I quickly became a raving fan of the man and subscribed to his monthly cassette audio program, Insight.

He taught me about goal setting and introduced me to a concept that has since guided my life. Earl called it the strangest secret. Since then, I’ve heard the secret expressed in many ways but this is still my favorite. Enjoy the video