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If you’re a business owner, a lot has happened this year to make you stop and consider your (and your business’s) finances.
inflation Every dollar is worth less, federal rate hikes have made it more expensive to borrow, and while recent bank failures haven’t completely affected your business, they’ve certainly caused a fair amount of commotion.
With all this going on, my husband and I decided to meet with a mentor and financial advisor who has managed hundreds of millions of dollars over the past 25 years to review our investments.
He pointed out that, while we both have various investments, we are primarily putting our money into something that has paid off. up several times Standard stock market returns – and that’s something our respective businesses do.
After that meeting, I concluded that it was wisest to invest more in my most reliable asset – my business. Sure, we have a lot of “safe” investments too, but really, in the long run, nothing compares to our businesses in terms of return on investment (ROI).
The biggest investment I’m making is in my marketing: I’m increasing our annual marketing budget by over 20% to $7 million this year.
I have made this decision based on some hard work experience I have gained Surviving two recessions. First (2008), I cut my marketing and we barely survived. Second (2020), I refused to cut our marketing and as a result, growth in the last three years has averaged 20% after averaging just 5% in the previous decade. I learned that marketing is important when times are good, just to grow a business necessary To survive when times are tough.
If you’re like me and know that your business is your greatest asset, I’d like to share three marketing principles I’ve followed and applied to strengthen my business and increase revenue despite recessions and economic turmoil.
Related: Why a recession is the worst time to skimp on brand marketing
1. Use current economic conditions to your advantage to increase market share
Recessions come and go, and some businesses leave behind legacies we can learn from. Kellogg is a perfect example. In the late 1920s, Kellogg and Post dominated the breakfast cereal market.
When the Great Depression hit, the Post responded in fear, cutting costs and cutting advertising while Kellogg did the opposite. Kellogg’s went into radio advertising and heavily promoted a new cereal called Rice Krispies.
By 1933, the economy was at its worst, but Kellogg’s profits increased by 33%. Not only did Kellogg’s survive the financial crisis but it went on to become a leading cereal brand – and it remains there more than 80 years later. In 2017, Kellogg’s market share was 30%General Mills with 29% and Post with 18%.
I experienced a similar phenomenon with my business, Postcardmania. In 2008, the recession devastated many businesses. We were hit hard by the downturn in the real estate market as 46% of our clients were mortgage brokers. In 2009, a consultant at the time saw how much I was spending on marketing each week and said something to the effect of, “We could save a lot of money if we cut back.”
Against my better judgment, I listened to my marketing and cut back in the hopes that we could conserve our resources and increase profits, but that only made the situation worse. A small revenue drop in 2008 (about $150,000) turned into a huge loss in 2009—about 15% of revenue and over $1 million.
I made a sharp U-turn and ramped up my marketing as soon as possible, and we recovered by 2010. Marketing budget again
Then in 2020, when the pandemic crippled the economy, I knew exactly how rough my marketing was – and it got rough as sales dropped more than 40%.
But guess what my competitors did? Just like I did in 2008 — they froze or reduced their marketing. The difference between 2008 and 2020 was clear; We grew Postcardmania in 2020, and then business got better in 2021 and 2022. Since 2019, our revenue has grown by 60% (an average growth of 20% per year) after 10 years of average growth of 5%.
I know it seems counterintuitive to invest more in marketing when the economy is weak, but history doesn’t lie, and my own experience backs this up. Keep your marketing strongAnd your leads and sales will also be strong.
Related: 6 Recession-Proof Business Marketing Strategies
2. Choose the marketing channels with the highest ROI to make the most of your budget
So, which marketing channels should you invest in? The answer is simple – that works.
If you haven’t already Tracking your marketing Closely, commit to starting now. it is complex That you track what you’re spending and where the leads and new customers are coming from so you know what’s working and what needs improvement.
Once you know which channels yield the highest ROI, you can invest more there to grow your leads, which in turn generate more sales and revenue (and unless they’re in or out of good range You can tinker with low performance tricks (back to fit your budget needs).
One marketing strategy that I find has a high return on investment is retargeted mailings. Triggered mail makes the most of each lead by specifically targeting people who have already shown some form of interest in your products or services. Visiting your website.
Depending on who you want to target, postcards are automatically printed, addressed and sent within 24 hours of their website visit. Targeting can be based on the length of time a visitor spends on your site, the web pages they visit, the items they put in their shopping cart, or a number of other factors.
Because you’re only targeting warm prospects and sending a few postcards a day (rather than thousands at a time like traditional direct mail), the upfront cost of a triggered campaign is relatively low — and that means your ROI potential is much higher.
Added Mark Bias House, one of our real estate investment clients Retargeted direct mail for their follow-up. They spent $647 to mail just over 100 postcards to their website visitors. As a result, he converted a lead into a sale and made $70,000 in revenue. That’s an ROI of 10,710%!
If you decide to increase your marketing investment like I did, I suggest starting with tactics focused on improving website conversions or follow-up. You’ve already spent the money on the hardest part — getting someone genuinely interested from someone who doesn’t know about your business — so take the time to find out if investing a few more dollars per lead will translate into more sales. Just don’t forget to track closely!
Related: How to Adjust Your Marketing to Survive a Recession
3. Take advantage of free communication tools to stay in touch with prospects and customers
Not every marketing tactic costs money; Some are 100% free. Leveraging a free marketing platform during tough times not only helps you budget, it also helps you communicate better.
First, I suggest you perfect and enhance Email Marketing. Tools like Constant Contact and Mailchimp let you send emails for free up to a certain amount. Send promotional emails that include catchy subject lines and attractive deals to increase clicks. Consider creating an email newsletter that your audience will enjoy reading. It can include valuable information about your industry, tips and tricks, recently completed projects, or features about your company to keep your customers engaged with your brand.
Second, I recommend refreshing your website with new, SEO-rich content. You can write the content yourself or find a team member willing to help — or even give it away The latest craze, artificial intelligence (AI), has a go. Just provide a prompt, and let the AI do the heavy lifting (aka writing) for you, then go ahead and put your own stamp on it using expertise that only you can provide. Blog posts, web pages and other types of articles will not only promote your website in search engine results on Google, but they will also increase engagement on your website.
Finally, be more active on social media. Post creative, informative content that draws people in and encourages engagement, such as polls or quizzes. Facebook and Instagram allow you to list your products and services on a shop page for free. Even though it takes a little more time and energy to create posts every day, constant communication with customers and prospects is invaluable and can lead to increased income and a positive brand image in your area of expertise.
At the end of this Economic recession, at least you can say you gave it your all and worked hard to make your business the best it can be. Invest in the right sectors, and you’ll enjoy benefits that last beyond the most recent crisis.