With every problem there is an opportunity. An economic downturn is an excellent time for instituting a "pay-for-result" business model.
Business owners are likely concerned about the recession. As the economy slips into a recession, small businesses without the financial resources of bigger companies can be hit the hardest.
A typical reaction is to cut back on nonessential spending. Unfortunately, many companies see their marketing efforts as nonessential.
This can be seen in the fact that in the first quarter of 2008, ad spending across the nation had a growth of 0.6% from last year’s $35 billion. However, the news is a disappointment for media companies in the $12 billion market, which is expected to see growth slow sharply from a steady 13% in 2007 to 6% this year.
Experts suggest that a recession is a time when companies need more exposure in order to strengthen their presence in a customer base with a shrinking budget.
Instead of slashing their marketing budget what small businesses need is to find ways to maximize results for what they pay. In fact, many entrepreneurs are thankful for a recession and economic troubles. Some cost-saving strategies implemented by them might include the following:
* Get the right strategy and business model and then implement them efficiently. Switch from traditional marketing and PR agencies to a pay per result model. Instead of spending large amounts of money on adverting that might or might not work, turn to services such as those that only charge a client based on the amount of press coverage they get.
*Manage costs, risk, finance and cash and focus on profitability. Don’t spend cash, instead trade stocks for the services needed. Rather than spending cash to pay for necessary promotional or marketing efforts consider partnering with companies that provide these services. For example, Services4Stock.com offers a conduit for small businesses to trade stock for services, fueling growth with minimal spending.
* Use technology to attract and benefit customers, reduce cost and improve efficiency. Consider switching from expensive traditional advertising to Viral marketing. YouTube commercials, online presentations that explain the product or service, are all nontraditional approaches to getting the word out. Small businesses usually do not have the budget for expensive advertising campaigns and hence their reach is limited. According to the Interactive Advertising Bureau (IAB), Internet advertising revenues are at an 18.2 percent increase over the same period in 2007.
* Provide value and measurable results. Nowadays, it is essential to calculate the ROI (return on investment), have fast and continuous results.
Adapted from article by INTUIC, International PR Management