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Nutritionalmarketing.com Weekly Newsletter Update
- Marketing Ideas, Information and Tips Nutritional Retailers Want
and Need!!
Volume 3, Issue
#25 - June 20, 2002
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In this issue:
Counterintuitive marketing during turbulent times!
So what should you do?
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Counterintuitive
marketing during turbulent times!
During tough times,
our instinct is to hold back, to keep a firm grip on what little reserves
we have so we can make it to the end, wherever that is. Experts say
that’s why most diets don’t work. Your body is so smart that when you
reduce your food intake, it thinks it must be under attack. Your body
stores fat so it can make it through the tough times. Thus, your body
works overtime to keep the fat you’re trying so hard to lose.
Well I think some
people view marketing like a diet! They "must" cut back during tough
times or they’ll run out of money before the economy turns around.
They hide so they can fight another day.
I’m not saying you
shouldn’t be fiscally responsible. But don’t stop all marketing. According
to numerous marketing studies I’ve read, companies that advertise during
recessions come out of the economic slump faster and in a better position
within their market than competitors that crawl under a rock.
This flies in the
face of what we’ve all been taught about saving for a rainy day, about
being prepared for tough times. The problem is if you don’t market
now and work on adding new customers, you may end up like many business
people who don’t make it to the economic turnaround.
It’s wise to increase
your market share during turbulent times. By marketing now, you can
gather new customers while other people watch their assets dwindle.
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So what should you
do!
If you’ve heard
me do a marketing presentation, you know I speak about allocating your
marketing assets so you can generate the greatest possible return on
your money. I would guess that all of you have been exposed on more
than several occasions to the 80/20 rule! Eighty percent of your business
comes from 20 percent of your customers.
We recommend to
most of our clients that they spread their marketing budget in a slightly
different allocation. We prefer 70/20/10. We find that by investing
70 percent of your marketing time, energy and money on your current
customers and hot prospects, you tend to generate the greatest sustainable
return on your marketing.
Plan to invest 20
percent of your marketing budget on prospects who are most like your
existing customers. That would be your customers’ neighbors, friends,
work associates and people that they play bridge or golf with. These
people and your customers have similar goals and desires. They often
have similar health and nutritional needs. These prospects can be very
easy to target and they can generate fast results.
There are a number
of services available that you can use to search for and find people
who live near your customers. There’s actually a Web site where you
can do this kind of research. This is a wonderful way for you to generate
people to contact with that 20 percent chunk of your marketing budget.
The final 10 percent
should be spent on the universe. This is the smallest portion of your
budget and it will have the lowest possible response. You’re hoping
for a response but don’t bet the house on it.
So what do you do
with the 70 percent you’re investing on your existing customers and
hot prospects? The answer is to channel that money toward what they’re
interested in or what’s currently on their minds. For example, the
stock market looks like a frightening roller coaster. It’s no longer
fun. It’s just ugly and that means people are getting ready to find
a bunker and hide, hoping they avoid the carnage. How can you use your
marketing to reach out to your customers and key prospects about this
situation?
If your target market
is business owners and managers, there’s a great Web site - http://www.lead411.com - that provides information
about companies that are obtaining funding as well as going public.
This can be a great resource for reaching new business customers and
prospects. This could be part of your 20 because they’re not currently
customers.
The 10 spent on
the universe is a long-shot investment that, if it works, pays great
dividends. The challenge is it doesn’t usually pay off. The good part
is you only lost 10 percent of your budget!
My last comment
about marketing budgets is that you should increase your overall marketing
spending now. If you budgeted 5 percent of gross revenue on marketing
in the past, bump it to 7 percent for the next year or two.
For some reason,
many small-business people don’t see the cause and effect of spending
less and getting less. In a past life, I worked at a company that always
cut back during tough times. Each month, they asked us to cut back
on the marketing. At the end of the next month, sales had continued
to decline, so they cut back more! The only thing this leads to is
a liquidation sale.
Invest in your marketing
today so it will pay dividends in your future!
As always, have
fun with marketing!
Marty
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Quote
"If you don’t invest
very much, then defeat doesn’t hurt very much and winning is not very
exciting."
Dick Vermeil
Are you willing
to invest in your marketing today? Will you take the risk? If you
won’t take the risk, why should your customers risk spending their hard
earned money with you?
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Please note that
all of the marketing ideas that are mentioned in our enewsletter or
on our web site are designed to help you grow your business. As you
know one size does not fit all and some of the ideas may work better
for specific applications.
