Presentation to Business Bolton - 10th February 2009

Presentation to Business Bolton 10th February 2009

Yesterday, I had the privilege of addressing 140 SMEs during a Business Bolton event held at the Reebok Stadium. The theme was marketing in recession, something which I’m working on all the time as Corve Consultancy develops business strategy, marketing strategy and marketing communications programmes for our clients around Manchester, Cheshire and the North West.

This is a transcript of the presentation.

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Good evening ladies and gentlemen and my thanks to Business Bolton for inviting the Chartered Institute of Marketing to be a key partner in this event.

I’m Jeremy Bassett. Eight years ago, after more than 25 years in domestic and international corporate finance, I set up a Strategic Marketing Consultancy which is now based in South Manchester and in my spare time I’m proud to be the Chartered Institute of Marketing’s SME Ambassador for Greater Manchester, bringing information and initiatives to SMEs through events just like this.

Tonight I’m joined by five colleagues who are also Chartered Marketers and we will be available during the evening to discuss business and marketing strategy, as well as tactical marketing communications issues with as many of you as we can meet.

Now is not the time to cower in our shells and hope this whole recession thing passes by. If you fear the economic change that is upon us, the consequences for you will be poor results, bad decisions and for many – job losses.

On the other hand, if you embrace change, build a plan to capitalise upon it and lead your company with the attitude of being stronger as a result, you will find that the bumpy ride ahead can be more enjoyable with a positive focus and a determined approach to tackling the challenge.

Tonight we are going to explore some ways to take this philosophy and transfer it from a PowerPoint presentation into the real world of SME businesses.

We only have 20 minutes or so and even Gordon Brown needed longer than that to save the world, so we won’t be covering everything. But we do have a Q&A session at the end of this part to pick up on some of the issues raised, or to talk about things I won’t have had time to mention.

So what can we do?

I think the first thing is to remember that we must not become invisible, either as a business, or as the business owner during a recession. It is imperative that we maintain our communications expenditure to generate properly planned promotional activity and exposure.

This may mean trying to do more with less resource, but we must ensure that we keep strong differentiated messages about our products and services in front of our most fertile audiences.

So how do we differentiate our messages? Well the first rule is to talk about our customers and what they value, instead of talking about our own organisations and products! Remember nobody wants an electric drill – they want a hole! Revlon don’t sell cosmetics, they sell hope; Sony doesn’t sell electronics, they sell entertainment.

But also remember Woolworths – what on earth did they stand for? They lost their competitive positioning to the supermarkets and the pound stores a long time ago and the only thing that really differentiated Woolworths was pick and mix. You cannot sustain a major high street retail presence on pick and mix!

So we need to really understand what our businesses bring to market and start to talk about this aspiration in terms that our customers will recognise, understand and respond to.

Now is also the time to look for alliances amongst our business contacts. Bundling together elements of our products and services to make a broader, stronger more competitive offering, as a result of a partnership or joint venture, may help both parties increase market share.

Again this is about understanding exactly what is in the mind of our target market and thinking how we can best augment our offering and deal a blow to competitors who maybe acting slowly and cautiously.

Along side this is a root and branch review of our products and services in relation to a recessionary economy. Just how relevant is our offering today, compared to two years ago before the downturn really kicked in? Is it now time to develop or modify our offerings as a way of maintaining differentiation and competitiveness?

Now is the time to consider innovation and product development. Many businesses are now reassessing their core products and services, with a view to either augmenting or streamlining them. They want them to fit the economic circumstances that will prevail for another year or so, and the shift in customer needs and wants that will occur as a result.

Being different will help us to compete without lowering our prices – and remember in any developed market, 90% of customers would prefer to buy on non-price reasons and pay some level of premium price for perceived additional value. Only 10% will always buy the cheapest – because they don’t care about that category of goods or services.

Even in an undeveloped market, a proportion of customers will still prefer to pay premium price for some additional value. A larger proportion may appear to want the cheapest but they will have latent needs that have not yet been identified and exploited.

Of course, the smart businesses are those that find the latent, undiscovered needs of the market and exploit them first. But even then, expect a residual 10% to always buy the cheapest.

Being the cheapest is not a no-no strategy in a recession – look at Poundland who have reported record sales and profits. The secret is to be able to guarantee sustaining a critical mass of volume sales sufficient to deliver break even plus.

Here is one way to secure sales on price without necessarily slashing prices. Many online retailers, as well as businesses using the web to attract offline customers, are now running 30 day campaigns with adwords based on low cost phrases like “best deal”, “highly discounted” or “lowest price available”. In this way the cost conscious Googler is drawn to the proposition looking for a deal and providing there is a deal, which need not be at rock bottom price, you may just have a new customer!

We all have three core target markets to address; our existing customers, those who have actively enquired but not purchased and our prime prospective audience. First of all, let’s look at our existing customer base. In hard times we need to be so close to the people who already spend with us.

They are converted and our challenge is to increase the share of wallet we receive. How do we do this? We look for ways to add value to their relationship with us – not necessarily at a cost to them.

Consider one strategy – resolve to stop issuing bland communications and start serving the customer. As an example, there are so many businesses that send out a monthly newsletter with the fierce discipline of an Olympic athlete. They are dead set on getting that email out at 10.00am on the second Tuesday of each month and will drop everything to make sure it goes.

But has there ever been a flood of incoming phone calls if by 10.01am the email has not arrived – no of course there hasn’t, which should make us wonder long and hard about the value of that piece of communication.

Try this – instead of clinging to old newsletter habits, create segmented email campaigns for your different groups of customers with highly relevant information that will be of most interest to them. I’m presently working with a large firm of accountants in the south of England that has over 3000 clients.

Every half year they produce and send out a pre budget or budget report – you know the eight page booklet we all get from our accountants. Actually they don’t even produce it, there’s a company that produce a job lot of these things for over two hundred UK firms with different covers!

This firm has clients across the whole economy; manufacturers, retailers, service companies, leisure businesses, private sector, public sector, SME, quoted companies, high net worth individuals, the lot.

Until they segment effectively and deliver information that is specific, relevant and informative to each of the segments they serve, they might as well burn the money in the street for all the effect it has. They need to start spending on relevancy and segmentation as do all of us.

As a client, I want tax and general financial information that has relevance to the size of my turnover, the size of my payroll, the sector that I operate in, the age and net worth of the directors of my business, even the amount of capital equipment I use. I don’t want bland generalities that could be applicable to anyone and end up being applicable to no-one.

If we all resurrect those dead enquiries we received over the last two years, by delivering a sector specific personalised communication, that has relevancy to the prospect and integrates our products or services into the solution, then our chances of reopening negotiations will be the highest possible. This is also true as we approach the low hanging fruit amongst our primary target audiences. We must make all our communications relevant in the world of the audience – not our world

Reaching all these people electronically is both feasible and cost effective for the SME, but it begs one huge question - what are you going to do about that website of yours?

For SMEs the web is the most extensive and cost effective media we can work. So what have we all done to make our business visible, to make our site one that the market bookmarks? And what do we offer from our site that keeps customers and prospects returning week after week?

Placing relevant informative and specific bulletins on our website in direct copy, or via an integrated blog, is one of the best ways to add value to our customer segments and to raise our natural ranking.

While we’re on the subject, let’s kill a few myths on Search Engine Optimisation. You don’t need some pointy headed guru or, even worse, some smooth salesman to improve your website rankings.

There are a series of simple straightforward things you need to do, like getting rid of flash components; embedding keywords to each page; correctly structuring your page headings; using internal and external links; choosing the right search terms and making sure your site is properly listed, which Google, MSN and the other key search engines will acknowledge and respond to in terms of raising your position.

And then you need to keep refreshing your content on a regular basis, twice a month at least, to demonstrate a dynamic site that the search engines will recognise. None of this is particularly expensive!

With the support of my web sub contractor I have moved my own website and that of numerous clients to the front page of Google on particular key search terms in as short a time as two months.

It also pays dividends to have our website copy reviewed by professional copywriters from time to time. Being a great engineer, retailer or solicitor, knowing our sector and our organisation inside out, does not meant that we are the best person to write about it. Hundreds of good looking marketing communications are ruined by inadequate or inappropriate copywriting.

This may give you an example of what I mean. Just out of interest how many of us have a page on our website entitled “About Us”? And how many have a page aimed at our audiences entitled “About You”.

At any time, but particularly in these difficult times, do please remember that as a buyer I am not interested in you. I am only interested in what’s in it for me and I want to be told quickly, succinctly and in a way that demonstrates competitive advantage in my purchase!

Make sure your content reflects this – in all communications, not just online

As we communicate now, in a recession, we need to think about whether we should update our messages as well as use more creative targeting to reach both new and existing markets. We need to determine whether the media we are using to carry our messages is still the most appropriate. Markets and individuals change their behaviour when times get tough and this can offer new options and new opportunities.

Two related things – the unenlightened will have cut back their marketing and training budgets – how daft is that? It has never failed to amaze me that in tough times the marketing budget gets cut first – but do you know what – I know exactly why that happens and I entirely understand it!

It’s because many businesses look at their tactical marketing communications activity and say “well it didn’t work” – and on many occasions they are right.

This is because so many businesses go straight into direct marketing, advertising, PR, personal selling and sales promotions without any thought as to who they are trying to reach, what competitive position they are trying to hold, what competitive advantages they offer to the market against their rivals and how they are going to sustain a communications programme over a 12 month period.

Remember, marketing is for life not just for Christmas! Unfortunately so many seem to see it a as a random or haphazard activity when no one can think of anything else to do!

They bang out a mailer or buy a hopelessly inappropriate piece of ad space and then when it doesn’t deliver a doubling of turnover they castigate the marketing department and they cut the budget!

I’ll only say one vaguely promotion thing about the Chartered Institute of Marketing tonight – you wouldn’t seek advice on a building from an un-chartered surveyor or take strategic financial advice from an un-Chartered Accountant – please don’t fall into the same trap with marketing – there’s a very good reason why it takes a long time and huge commitment to qualify as a Chartered Marketer – do please use the many resources our Institute offers to all businesses at http://www.cim.co.uk/

The second thing about new options in a recession is that there are still a lot of very good businesses out there who are already doing all the things we are talking about, and more, because they understand the fantastic opportunities that exist for good businesses during hard times.

They are still creating lots of noise in the market and you have to make sure that your target audiences not only get to hear your messages, but they keep tripping over them in all the places they go – online and offline.

At the other end of the scale to my accountancy client I mentioned earlier, I work with a one man hypnotherapist and counsellor. He doesn’t have a big marketing budget at all, but through the adroit use of free advertising and networking we’ve got his weekly appointments up from 10 to 36 within the space of three months. It’s cost him £30 so far and he’s trebled his weekly income!

Free advertising and networking in his local area has got him right in the faces of people who want to lose weight, stop smoking or needed to talk about relationship issues during January, which is traditionally splitting up and divorce month.

Free advertising is particularly appropriate in B2C – business to consumer environments. People congregate in all sorts of different places – churches, libraries, supermarkets, leisure centres, bus stations, coffee shops, and so on. It is entirely legitimate to seek out ways to get your messages visible in these places. This is what a new start firm of Solicitors that I worked with did, all over Derbyshire, and built a huge a new book of business on the back of it.

We’ll talk more about what we can do as individual business owners in a while, but we owe it to our organisations to be out flying the flag at every appropriate – and I stress the word appropriate – opportunity. You know which business groups your customers and targets will attend and you know which ones offer you a route to market. Make sure you use them, as both my hypnotherapy client and the solicitors did.

Not everyone will enjoy their level of success for that return on investment, and it is important for us to understand the type of business we are trying to win when we spend money on marketing communications so do be clear about the level of profit that each new order will generate.

This allows us to directly relate these figures to our communications costs and to calculate the success rate required and the ultimate return on investment. In tight financial times, return on investment is important and you may consider focussing on tangible marketing tactics where ROI can be most easily measured. Tactics like direct mail and e-mailshots are two that can easily be quantified by cost and return.

Now let’s talk about the people we know.

And I’m going to recommend two sets of actions for each of us. One is strategic and one is tactical under the heading of personal selling.

First the business and marketing strategy suggestion. Have a staff meeting. Sit down with all your employees and ask them what they would like and dislike about the business if they were a customer. What they perceive today, your customers will perceive and believe tomorrow.

Let them be the owner for an hour and uncover what the first three things are they would do to make the business, the products, the services or the delivery, better for your customers. Internal marketing is vastly underrated within SMEs – the feedback may surprise you and may help you unlock new competitive advantages for these times.

Now the marketing communications part, and as we said at the start, now is not the time to be invisible. Draw up a list of all the people you know or you ought to know, who could be or who should be referrers to, and advocates for, your business.

Meet up with at least three of these people a month as you are out and about visiting your existing customer base.

Why are you visiting your existing customer base – because this is part of your strategy to increase share of wallet. We all need, continuously, to sound out each and every one of our customers about what they would do if they were in our shoes, to maintain and increase our business relationship.

This works.

I spend a large part of my time talking to my clients’ customers, finding out the good the bad and the indifferent, so we can plan to build on the good, eradicate the bad and galvanize the indifferent during the coming months. You can do this for yourselves and I strongly recommend it, you’d be surprised how much people are prepared to share their views and ideas with you.

Finally, one of my colleagues at the back of the room has coined a great expression for businesses during this recession. Go from fat to fit.

So many businesses have gorged and become fat in the good times. Best practice has slipped and complacency has set in. Now is the time to get fit again and stop doing the things that are wasteful and not cost effective. We could all recalculate a new efficiency based break even and do more of the good things a healthy business should do.

This is the fifth recession I have experienced in my working career – one in each decade. However this one is different. Previously there was always a strategy called “I’ll get the bank to lend me some more money to cover my inadequacies and I’ll ride out the storm”.

Well we all know that’s not going to happen this time, so reverting to the efficient, best practice based organisation that was able to take such strong advantage of the good times, seems like a plan to me.

We all need to keep going. In the end, it is much cheaper to maintain or grow share of mind, share of market and share of wallet during a recession than it is to try and come back and build it all up again later, and I hope this evening’s event will end up benefitting each and every business in the room. Thank you.

Now, along with my colleague Dawn Holmes – Regional Chairman of the Chartered Institute of Marketing, I’ll gladly take any questions from the floor for the next few minutes.