Recession Data On The Value of Marketing Through Downturn!

By Joyce McKee | November 17, 2008

I received this article from the Go To Market Strategies (www.go-to-marketstrategies.com) folks and felt it was very worthy to share with you. Some times looking back can aid our perspectives. Enjoy!

“We know the anxiety is rising for many of you as the economy falters. We know it is tempting to begin the slashing process of your expenses. And, we know that marketing is one of those areas that typical gets the brunt of those budget cuts. We understand…but you must resist!

Sure, you should always be doing everything you can to Maximize Your Marketing Resources. That’s true, even in a good economy. But history shows us that now is just not the time to curb your marketing efforts.

Here are some of the facts from past recessions:

  • 1970 recession year - American Business Press (ABP) and Meldrum & Fewsmith study showed that “sales and profits can be maintained and increased in recession years and [in the years] immediately following by those who are willing to maintain an aggressive marketing posture, while others adopt the philosophy of cutting back on promotional efforts when sales appear to be harder to get.” 1
  • 1974-1975 recession years - ABP/Meldurm & Fewsmith 1979 study covering 1974/1975 and its post-recession years found that “Companies which did not cut marketing expenditures experienced higher sales and net income during those two years and the two years following than those companies which cut in either or both recession years.” 2
  • 1981-1982 recession years
    • McGraw-Hill Research’s Laboratory of Advertising Performance studied recessions in the United States. Following the 1981-1982 recessions, it analyzed the performance of some 600 industrial companies during that economic downturn. It found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following three years than those which eliminated or decreased marketing. 3
    • Cahners and Strategic Planning Institute (SPI) produced their report, “Media Advertising When Your Market Is In a Recession.” It disclosed, “During a recessionary period, average businesses do experience a slightly lower rate of return relative to normal times. However, expansion times do not generate a higher level of profits than normal periods as might be expected.” This phenomenon was explained by an analysis of changes in market share.”During recessionary periods,” said the Cahners/SPI report, “these businesses tended to gain a greater share of market. The underlying reason is that competitors, especially smaller marginal ones, are less willing or able to defend against the aggressive firms.” The study then pointed out that businesses that increased media advertising expenditures during the recessionary period “gained an average of 1.5 points of market share.” 4
  • 1990-1991 recession years - Management Review asked AMA member firms about spending during the 1990-1991 recession. “Fortune follows the brave,” it announced, noting that the data showed that most firms that raised their marketing budgets enjoyed gains in market share. Among the magazine’s sample, 15 percent reported “greatly decreased” ad budgets. Advertising was “somewhat cut” by 29 percent. “The keys to gaining market share in a recession,” concluded Management Review” seem to be spending money and adding to staff. Firms that increased their budgets and took on new people were twice as likely to pick up market share. 5
  • Beyond the statistics, why might it be more important than ever to market despite economic downturn? Strong consideration should be given to the idea that marketing plays a more critical role now than it did during previous recessions. While marketing’s role was once more informational than brand identity building, and considering that never more than today has the clutter factor been so great, relationships between customers and brands are critical. Relationship marketing has surged to the top of effective marketing campaigns as a means to keep an appropriate level of share of mind for purchase loyalty. Marketing serves to foster and maintain consumer-brand relationships. 6
  • The effect on profits. From the Harvard Business Review, “Advertising as an anti recession tool,” comes the effect of cutting advertising on the bottom line. “The rationale that a company can afford a cutback in advertising because everybody else is cutting back [is fallacious]. Rather than wait for business to return to normal, top executives should cash in on the opportunity that the rival companies are creating for them. The company courageous enough to stay in the fight when everyone else is playing safe can bring about a dramatic change in market position.” In addition, the article points out “Advertising should be regarded not as a drain on profits but as a contributor to profits, not as an unavoidable expense but as a means of achieving objectives. Ad budgets should be related to the company’s goals instead of to last year’s sales or to next year’s promises.” 7

What are you waiting for? Get marketing!

  • REFERENCES:
    1. “How Advertising in Recession Periods Affects Sales,” American Business Press, Inc., 1979
    2. ABP/Meldrum & Fewsmith study, 1979
    3. McGraw-Hill Research. Laboratory of Advertising Performance Report 5262 New York: McGraw-Hill, 1986.
    4. Kijewski, Dr. Valerie. “Media Advertising When Your Market Is in a Recession,” Cahners Advertising Research Report. The Strategic Planning Institute, 1982
    5. Greenburg, Eric Rolfe. “Fortune Follows the Brave,” Management Review, January 1993
    6. Khermouch, Gerry. “Why Advertising Matters More Than Ever,” Business Week, August 2001
    7. Dhalla, Nairman K. “Advertising as an anti recession tool,” Harvard Business Review, Jan.-Feb. 1980

This data was compiled for you by our friends at Demand. Demand works with clients to help them attract new customers, retain existing customers, increase marketing effectiveness and reduce marketing, operational and administrative costs.”

Please share your thoughts on this piece…

Topics: business marketing | No Comments »

How to Justify Those Exhibit Dollars

By Joyce McKee | October 30, 2008

In light of current economic challenges, some managers want to cut marketing budgets.  But what if those dollars were producing solid leads for your firm?  Management would think twice about those cuts.

If trade show participation is done correctly it can produce measurable returns for a company.  But most exhibit managers do not know how to produce the necessary reports on their shows so that management would look closer at the results. The industry now has at its disposal a wonderful new ROI Tool Kit. Funded by a grant from the PCMA Educational Foundation to the Center for Exhibition Industry Research, this web-site was developed by Exhibit Surveys, Inc. in conjunction with the ROI Task Force of the International Association of Exhibitions and Events.

The great news - this ROI Tool Kit is FREE!!

Earlier this year I conducted a webinar with Skip Cox, President of Exhibit Surveys on the ROI Tool Kit.  The original intent was to have this information for the paid members’ site of Let’s Talk Trade Shows.  However, with the economic turmoil currently transpiring, I have decided to make it available to anyone who wants to listen.  The 2 webinars are about one and a half hours in length.   So you need a chunk of time to watch it.  But the information is so valuable that it might help you internally show the results of your 2008 trade shows.

You can find the ROI Tool Kit at http://roitoolkit.exhibitsurveys.net/Home/Welcome.aspx.   You will have to sign up to log in, but it is free.

In the RESOURCE section of this site, if you click on that tab, it will take you to the webinars Skip and I created.

Let me know how this works for you.  And don’t forget to get your free download of my eBook.  Just click on the red book cover on the right.

Topics: Trade Show Tips | 1 Comment »

Something as Basic as a Business Card - How Can You Forget It?

By Joyce McKee | October 24, 2008

One of the fun aspects of this blog is that I have the privilege of meeting new people. Recently I was talking with Steven Leon of ShowStoppers about his service offering. www.showstoppers.com They create within a trade show a PR event. More than 1,000 journalists have attended ShowStoppers @ CES events for three consecutive years. Well, he was saying that some PR folks come to register for his event and they DO NOT have a business card on them. Incredible?

That leads me to another new colleague. Reno Lovison. His company is Business Card to Business www.businesscardtobusiness.com. He has written a book - Turn Your Business Card Into Business. Reno and I had a brief conversation about business cards and the world of face to face marketing at events. I can tell you I will have more conversations with Reno in the future. We are both on the same page when it comes to the basics like a business card. And we talk how this tool can be used brilliantly to obtain business. Listen in to our conversation and then let me know what you think.

PS  Do not forget to get your copy of my eBook - just click on the red book cover and enjoy!!

 
icon for podpress  Reno Lovison [11:43m]: Play Now | Play in Popup | Download

Topics: Podcasts, Trade Show Tips | No Comments »

Uncertain Times Call for Creative Thinking and a Solid Plan

By Joyce McKee | October 22, 2008

The turbulence of the economy will undoubtedly manifest itself on the trade show floor. There will be exhibitors who will not even go to the show, as well as a group that does go, but is not totally prepared. Then there is the elite exhibitor who is not only prepared, but is ready to demonstrate commitment to customers and prospects by following through AFTER the show.

In last week’s Tradeshow Week publication (www.tradeshowweek.com) the breaking news was:

According to the most recent Las Vegas Convention & Visitors Authority Executive Summary, convention attendance in the city for the month of August dropped 22 percent to 574,184 attendees from 739,215 attendees in the same period in 2007.

Fewer attendees, fewer exhibitors - what does this mean for you?

Yesterday I was talking to my trade show colleague, Keith Resnick from Creative Training Solutions (www.creativetraining.com), about the state of the industry. In our conversation he shares what an exhibitor should do to get their mindset and goals ready for “show time”. Listen in as we discuss this very important topic. The question: In these uncertain times, how can an exhibitor generate maximize returns.

 
icon for podpress  Keith Resnick: Play Now | Play in Popup | Download

Topics: Podcasts, Trade Show Tips | 1 Comment »

Wisdom for the Economic Storms

By Joyce McKee | October 9, 2008

In the world of events and face to face marketing there is a repository of vast knowledge - Doug Ducate.  One can ask a question and this incredible resource has answers, backed up with statistics and wisdom.

I have the privilege to facilitate the Center for Exhibition Industry Research’s (CEIR) new blog.  In this week’s post I ask Doug about the government bailout, how that will impact the event industry.  His answer was succinct and worth listening to - so visit http://blog.ceir.org and listen to his response.  While you are there, check out some of the other posts on the site too.

On a personal note, there has been a new addition to my household.  I am the proud owner of a black standard poodle puppy.  She is the 6th one in the last 20 years.  I have yet to find the correct name.  Maybe you can help me - her Mother is Dancer and the Father is Tango.  So I want to use a dancing theme for this bundle of energy.

Topics: Trade Show Talk | 11 Comments »

Are You Prepared for Your Next Show??

By Joyce McKee | October 1, 2008

  

Sounds like a Boy Scout question.  But in the world of trade shows, an exhibitor NEEDS to be prepared.  In fact, I will recommend that if you are NOT prepared - don’t go.  I am sure that sounds harsh, but it is so true.  Your lack of preparation will greatly diminish any returns you might experience from the show.  Or think of it in another light, you are aiding your competitors because you were not prepared.  Can you afford that?

Preparation means that you are a well-oiled machine pumping out leads and positive press regarding your products and services.

If you need a boost for your preparation, download my eBook, The Secret to Achieving Brilliant Returns at Your Next Event: a Guide to Maximizing Your ROI and ROO.  It is loaded with ideas which can be implemented immediately!  Just click on the red book cover on the right.  It’s FREE!!

Topics: Trade Show Resources, Trade Show Talk, Trade Show Tips | No Comments »

Are You Paying Attention to the Details?

By Joyce McKee | September 24, 2008

Autumn is here and there is a show on your calendar.  As you prepare for it there are several tips I want to suggest so that this show can be the best show ever!

First - make sure there is a solid plan for follow-up on every lead that is capture at the show.  Typically, there will be several lead categories and each one should have an appropriate message and follow-up strategy for that group.

Second - Invite EVERYONE to come see you at the show.  This means getting invitations out early enough with a compelling message that your customer or prospect would “plan” to come see you during the show hours.  Use this communication activity to discuss why you are at the show and if there is something new or enhanced being introduced.

Third - Use Twitter.  Depending upon your audience, I would suggest that you use Twitter to drive traffic to the booth or related activities at the show.  This instant messaging tool can notify those that are following you on “what’s happening”.

Fourth - Every conversation is important - you never know who you will meet and where.  So make sure all of your personnel are at their very best behavior.  A casual conversation can turn into a huge order.

If you need more ideas and help, I recommend that you check out the Membership side of Let’s Talk Trade Shows.  Just click on the red book cover and read what the site is all about.

Until later…

Topics: Trade Show Tips | 1 Comment »

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