The author of the book The Art of War, Sun Tzu, once said, “Every battle is won before it’s fought.”  With everyone talking about the recession and rising gas prices, it seems that businesses will have to do “battle” in order to get through this downturn.  In my last blog entry, “Recession: Blessing in Disguise?” I talked about the MarketingSherpa report and how businesses can leverage online marketing during these uncertain times.  However, that report has a second part which talks about strategies that marketers are using to get through the slump.  In this blog post, I’m going to talk about those strategies, plus add some data from eMarketer that backs them up. This post will explain how local businesses can use these strategies to their advantage.  It can be your “business battle plan” if you will.

Tip #1: Be smart about your product mix and messaging
Because consumers spend less during a downturn, they’re going to be on the lookout for deals.  Offer items in several price ranges.  You might even have to increase stock and marketing on those lower-priced items.  “We all have to be extremely price-sensitive,” says Dan Sackrowitz, VP Marketing and Business Development of Bare Necessities.  “Whether that’s offering free shipping or free returns or offering great values, great deals.”

Tip #2: Get creative with Marketing/Offer coupons
During a downturn, it’s more important than ever to make those marketing dollars work for you.  Think outside of the box and come up with ways that will get customers to buy from you.  eBags, an online retailer of luggage, handbags, and backpacks, in the last recession came up with two tactics that helped them get through those hard times.  First, they partnered with Frito-Lay for a $10-off coupon to appear on 85 million chip bags during the back-to-school season.  Another tactic they used was sponsoring a “win a million airline miles” contest.  When people signed up, they left their email addresses.  This got them a good deal of press, increased the company’s email database, and created great viral marketing.

Another idea is to offer coupons for your products or services.  According to an article by eMarketer, 67% of US consumers said that they were more likely to use coupons during a downturn.  Of all the age groups, 71% of 18-to-34-year-olds were more likely to use coupons during an economic recession.  Perhaps the most interesting part of the survey is that income did not have a significant effect on whether a consumer uses coupons or not.  67% of those earning less than and 68% earning more than $50,000 annually were likely to use coupons during hard times. There are a number of vehicles that local businesses can use to offer coupons but offering them online may be your best bet at reaching your target audience.  According to the same source, “Coupons” places as one of the top 10 web site categories ranked by growth in unique visitors.  It’s also interesting to note that while 70% of adult internet users who use coupons use them in stores, 52% of them also use them online.  Coupons are definitely a driving factor when it comes to whether a consumer purchases a product or not.  A business can offer coupons on their website or it can offer it as an enhancement to their listing on IYP/Local sites like Citysearch and YellowPages.

Tip #3: Is every lead getting a response?
Make sure that every lead your business receives from its website, gets a response back.  During a downturn, Mary Senin, Director of Ecommerce Marketing at The Ritz-Carlton, looks for how well the hotels respond to leads coming in from their websites.  “Here…the business is coming to us.  It’s crazy if we’re not responding,” she says.  In order to make sure that the hotels are replying back to each lead, she hires a company that shops the websites to see how responsive they are being to meeting space and wedding inquiries.

Tip #4: Ramp up your online store
In another article by eMarketer, 21% of respondents of a PiperJaffray survey said that they would increase their online shopping due to a recession.  Almost one-third of respondents said they plan to do more comparison shopping online this year.  Online stores have two advantages when it comes to downturns:
 -With high gas prices and shrinking disposable income, some consumers decide to shop online instead of driving to the store.
 -Some online retailers stock up on brands and products and, therefore, may have more convenience and variety during a downturn than brick-and-mortar stores. 
For many local businesses, now may be the time to bulk up your online presence and sell and market more through online channels.

Tip #5: Retention is key
During a downturn, the cost of acquiring new customers is higher.  In order to keep your customers, try to exceed your customers’ expectations by offering multiple-payment options, tracking numbers/shipment information, hassle-free return policies, and coupons/special discounts.  If you’re an online retailer, make it easier for your customers to make purchases by offering PayPal, Google Check Out, and “bill me later” in addition to Visa, Mastercard, Discover, and American Express.

Tip #6: Show off your online product
Show off your product or service online by using video.  By showing or describing a product or service in streaming video online, you could increase your conversion rates by as much as 20%.  Some tips on inserting a video:
 -Make it clear in the video where to purchase the product.  Embed the company name in text as well as verbally saying it.
 -Keep the video under 3 minutes in order to accommodate shorter attention spans.
 -Host the video on your business’s website, YouTube, Google Video, and Metacafe.
Another place where you can get your demo video some online exposure is on IYP/Local sites like YellowPages, DexKnows, and Citysearch.  These websites offer video links as an enhancement to your listing on their sites.  They can even create the video for you.

Tip #7: SEO, SEO, SEO
Do everything you can to improve your natural search rankings.  This will complement a PPC campaign resulting in higher conversion rates.  According to the MarketingSherpa survey, 43% of large firms, 47% of medium firms, and 50% of small firms will increase their SEO efforts this year (see chart below).  BearingPoint, a global management and technology consulting company, relaunched its website with a strong SEO program to guide customers to its site.  “We’re starting to see real success,” says Palmer.  “We’re doing a lot more Web-based work today than a couple years ago.”

Tip #8: Invest in online and high ROI tactics
Today, marketers are investing more than ever in email marketing, affiliate marketing, online advertising, and search (PPC and SEO).  Some marketers say it’s because of the downturn and some say it’s because it works.  Search is a great way to market your business because it is trackable and measuring ROI is easier than other forms of advertising.  This allows a business to see the results of their marketing investment and optimize when needed.  However, out of all forms of online marketing, one thing is for sure – marketers are engaging more in paid search.  This year, 31% of large firms, 44% of medium firms, and 36% of small firms plan on increasing their budgets for paid search.

“Right now we’re seeing great returns on search,” says Senin from the Ritz-Carlton.  “So, we’re trying to direct additional money into that sphere because, regardless of the economy, we’re seeing great performance.”  The Ritz-Carlton also continues to invest in online advertising - for performance-related reasons.

Tip #9: Don’t eliminate traditional marketing tactics
Let your industry and product/service category guide how you do your marketing.  “In some categories, Internet marketing is so competitive that hundreds are fighting over keywords,” says eBags’ Cobb.  “You can try offline to be in a little different space, without everyone hanging around you.”  One place your business can advertise offline is the Print Yellow Pages.  Although online advertising is all the rage, Yellow Pages as a medium is still very strong.  According to the 2008 Yellow Pages Association Industry Usage Study, conducted by Knowledge Networks/Statistical Research, Inc. (KN/SRI), usage remained stable at 13.4 billion annual references in 2007.  Consumers who reference the Print Yellow Pages are ready to buy.  Nationwide, 86% of those surveyed made a purchase or were likely to do so after referencing the Print Yellow Pages.  The study also found that users are highly educated and financially secure.  Some quick facts on this demographic are:
 -80% have some level of college eduation
 -62% earn a household income of $60,000+
 -75% live in counties with a population of 150,000+
 -70% are married
The Yellow Pages is a very good medium at reaching consumers who are ready to buy and is a great complement to your online advertising.

An economic downturn can be hard on a local business.  However, like the bumper sticker that I saw this morning on my way to work said, “Just say NO to negativity!”  Turn that negative and make it into an advantage.  This will not only help your business get through the recession, but it will also help you come out on top when the economic situation gets better.  With an economic downturn, it means that marketers are going to have to:
 -Optimize
 -Market smarter
 -Test strategies
 -Measure ROI more aggressively
 -React quickly when problems occur
Forturnately, these tips will give your local business a marketing battle plan.  As one MarketingSherpa survey respondent said, “Leverage the negative.  Position yourself, your product, your department, your company as a solution to this problem.”

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