Dealing With Tightfisted Marketing Budgeters

Yes, times are tough for marketers. As if you didn't know.

And so it's likely you've heard some of the following lines — the most common gripes voiced by executives just before they drop the budget-slashing bombshell.

• “Our response rates are down, so the marketing budget is being cut. Get your sales back to where they should be and we'll talk.” This actually makes sense to some execs. You can't spend money if you're not making money. But others — the wise ones — know that the time to spend more on marketing is when sales are down.

  A car running on empty needs more gas to get where it's going, especially when there are mountains ahead. Unfortunately, you can't always convince the person who signs the checks to see this. So you look for shortcuts — roads you've driven before that are easy on fuel.

  Here's an idea: When the marketing budget is cut, take time to segment and test the customers you have. When you focus on a particular market or audience you can specialize the offer, messaging and tactics to appeal to the sector's wants and needs. You may find your loyal regulars ready to spend extra for that something more you suddenly have to provide them.

  For example, say current market conditions aren't stopping the fictitious Acme Electric from launching a product. With a keen eye on the markets most receptive to its messages, and given just the right hot buttons to place in front of decision-makers, Acme is engaged in a financially responsible and finely tuned rollout.

  “Gaining and maintaining a leadership position in the marketplace is a 24/7/365 effort,” explains Monte Roach, Acme Electric's business leader. “We can't afford to miss opportunities or lose market share because our marketing is out of sight and therefore out of mind. Our competitors are facing the same issues in this market — it's who does the best job in a slowdown that wins in the long run.”

• “No, we can't afford to make that offer!” (Or worse yet, “We can't make any offers!”) Be the hero your clients need in this challenging economy. Show them how the creative use of affordable offers can contribute substantially to their growth.

  In gourmet food — an area where you'd think spending would be coming to a grinding halt — Johnson Direct discovered how simple offers earned generous orders. Looking back at 12 months of e-mail promotions for a certain gourmet client uncovered the fact that the top 10 most successful campaigns featured free available product, or savings that could be offered without slicing into profits on specific popular products. Open and click-through rates for these campaigns were double or triple compared with the typical tightfisted efforts. To ignore this invaluable data would have been villainous.

• “We don't need to test. Our marketing strategy is working just fine.” They say what you don't know won't hurt you. But it's always wiser to understand what you do and don't know so you can plan accordingly.

Resistance to testing formats, offers, messaging, copy platforms, segments, creative, media channels and the like is not unusual, especially for organizations that have been handling sales and marketing the same old way for decades.

It's true, there's a risk involved in testing new ideas in an effort to “beat the control” and increase response. Testing takes an investment in time and resources, and often additional funds. But the outcome generally is worth the risk.

You want to test not only to lift ROI, but to learn. The more you know about what works best, the better you can market to segments that emerge as your marketing programs proceed. As the late direct marketing guru Dick Benson said, “You've got to determine if the information you can reasonably expect to gain is really worth the expenditure.” If it proves to be, you win.

Take this case: A nonprofit faced an economic climate that could affect the typical success of its annual holiday appeals. The group was urged to test a new direct mail approach against its time-honored control.

The ultimate success of the control-beating test — generating a 25% hike in individual donations — was due to the following: it seemed people were more apt to donate if there was a freemium included; the emotional copy platform brought a fairy-tale story (and ending) to life; and a two-part mailing kept the cause on contributors' minds' twice as long as the regular one-time mailing. Plus, thanks to testing a new list, more than 500 individuals became first-time donors.

When your fresh marketing ideas are turned down by naysayers or provincial politics, don't feel defeated. Simply adjust your game plan to zero in on specific markets, audiences or objectives. Be a hero to prospects by creating meaningful offers. And keep testing to learn more — and position your company for growth.

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GRANT A. JOHNSON (grant@johnson-direct.com) is CEO of Johnson Direct LLC, Brookfield, WI.