The following question was asked in a LinkedIn group recently. “With many clients freezing spending or reducing projects to a trickle, what do you feel is the smartest strategy to keep business rolling?”
Companies everywhere are slowing marketing and creative to a crawl if it’s not tied to immediate ROI, just as many companies are putting the brakes on R&R. Marketing budgets are a huge target, especially if quantified results cannot be proven. Many marketers are being let go as the recession continues. Many companies are, frankly, simply reducing prices and hoping for volume to make up for margins (which is often ill-advised in the long run, but seemingly unavoidable in the CEO and CFO offices); marketing savvy and expertise are obviously not needed to slap a lower price on something.
During this recession, “warm fuzzies” and branding will not be as sellable as they once were. Companies will continue using their current branding if it is at least acceptable. Some branding may need attention, especially for products and services that need to refocus on the value of their product, or a lower price for it. However, there will not be as much branding occurring until the recovery.
The strategy in many CEO suites now is: get people to buy what we have on the shelves, and keep those customers until we can afford to market new product. Those marketers in branding and feel-good areas (the right-brained creative folks) will continue to suffer until the turnaround and those skills may not be as valued afterwards unless they can prove their ROI worth. Those professionals that will succeed, stay alive and indeed ferret out new opportunities will straddle both left brained rational and fiscal sides of business, the science of marketing, and the art of telling the story.
So, whatever you do, offering extended payments, credit, etc. (which shifts the burden to the agency and pretty much working on spec — or close to it), are not going to sell unless you can prove future payback to the buyer. For one, you’re running the risk of your client throwing in the towel. You’re also entering the collections business, and that can turn into a huge headache. Unless you’re a deep-pocketed agency or consultant, offering extended payment options will potentially kill your business in the long run.
The answer is? Showing benefits, benefits, benefits. The argument is the numbers you can generate for clients now. They’re looking for lights out of the tunnel, so if a good case can be made to generate dollars, the coffers might open.
Frankly, discounting (beyond something like 5% off professional services for immediate payment) often damages your value. There are many competitors spinning their wheels working on spec right now — which is a huge mistake in my opinion. If it’s not generating income, do something else. If you’re worth it, and can prove it, clients will pay… maybe not today or tomorrow, but will when they see value and get a green light to spend money.
Take the time, too, to increase your value: a new coat of paint on your website, SEO, SEM, professional networking, pro bono work for charities. What goes around will eventually come around. The agencies that stay top of mind will get the first calls once the brakes come off, just like the companies that don’t stop marketing will come out much further ahead after the recession.
Another opportunity is filling voids of those that have been laid off. When companies cut their marketing expenses, they also created huge chasms in their resources and capability to react. With positioning, you can help fill that void.