BUSINESS ADVICE ON SURVIVING THE RECESSIONBusiness advice on surviving the recession, the things you should and shouldn't do to survive the recession and exploiting the internet to its full potential
It's official, the UK is in a recession with high street sales down by 3.9% in June and with the final figures yet to be published, retailers already saying July was even worse despite slashing prices. To compound problems, property prices have fallen by 10.5% over the last six months, slashing £20,000 off the price of an average house and with banks tightening their lending criteria, the credit crunch is going to make things tougher before they get any better. So, what are you doing to ensure your business survives the recession?
Despite all this doom and gloom; internet sales for the first six months of the year were up by 38% on the same period with most internet companies reportedly feeling bullish about the final half of the year. So why are there such huge differences in trading between traditional retailers and internet companies and what can companies who are not exploiting the internet to its full potential do to address the balance?
A recent survey of 700 small businesses made by the Open University Small Enterprise Research Team found that almost half (49 per cent) were considering increasing their advertising and marketing efforts to tackle falling sales. About 42 per cent said that they regarded chasing new markets as the best way to handle the slowdown and this was likely to include developing new internet marketing strategies.
James Wildish, the sixteen year old student who launched Boogami on 1.08.08 says "In theory, I couldn't have chosen a worse time to launch a new search engine but I recognised that small businesses needed a search engine that was sympathetic to their needs. Small businesses struggle to compete with the large internet companies who are well established and have deep pockets; the pixel advertising on Boogami is designed to generate high levels of traffic to any website and Boogami Doorways is a cheap and simple way for any business to establish a strong internet presence. I was lucky, my Dad's bank recommended me to the Where On Earth Group and with their backing and support have been able to use their PR and marketing teams to get Boogami into the public spotlight. As a result, traffic through my search engine has continued to grow and advertisers seen a strong return on their investment in advertising on Boogami."
Boogami has got off to a great start with many pundits championing James as the Golden boy who is going to take on Google. That is a huge task especially as Google has billions and James was dependent on pocket money up until four weeks ago. However, James has already been interviewed on BBC and ITV and traffic through his search engine is increasing by the day backed by a strong PR and marketing campaign. People obviously love the idea of a teenager going head to head with Google.
The Open University researchers discovered that a significant number of small firms were looking at an increase in marketing spend as a way of coping with the recession.
A spokesperson for the SERT said: "Normally the first thing businesses think of cutting back on is marketing and PR. To increase spending in these areas may seem counterintuitive, but this is exactly what firms should be doing to survive."
For advertising and marketing to be effective, whatever the size of the business, it is important to stick to a plan. Decide on a marketing budget, focus on particular market places, choose the right advertising mediums, calculate the expected returns, manage and monitor the responses and work within your guidelines. Whilst it may be essential to cut costs in other business areas, the worse thing you can do is cut your marketing budget; this will only lead to reduced sales which is the last thing you need.
The purpose of ay marketing plan is to match the particular strengths of any business (price, quality, reliability, reputation, innovation) with the needs of its customers and to use those strengths and differences to set the business apart from its competitors. Business should look at re-pricing and restructuring products to persuade potential clients that a product or service is good value. This does not necessarily mean having to dramatically slash prices. Providing something as a free gift or benefit with any purchase can entice a client to believe they are getting a good deal.
Paul Herbert, CEO of the Where On Earth Group, one of the internet's leading marketing companies says. "Most companies are not using the internet to its full potential and are therefore missing out where their competitors are cleaning up. People are being more careful with their money; petrol prices, parking charges and the time spent trudging round the shops can all be eradicated by clicking on a mouse. People are using the internet to source bargains and most businesses are not positioning themselves so that people can find them. Just because a business owns a website doesn't mean they will get the visitors they need to be an internet success. Owning a website is just the beginning; they need to invest in advertising online and offline, marketing, B2B emailing and a host of other internet strategies to generate high volumes of traffic to their website."
A good marketing plan should be broad in scope and detailed in its ambitions and should cover a number of important areas. It should assess the strengths and weaknesses of the business, and measure how those strengths and weaknesses determine their position in the marketplace and are perceived by existing and potential customers. Businesses should concentrate on their strengths and eradicate as many weaknesses as possible. The marketing plan should map out the general contours of the marketplace, identifying areas of change (price, technical innovation, new competitors, new market places and customer purchasing trends), and list how those changes may have a negative or positive impact on the business, the market place and how those opportunities may be exploited to maximise sales.
There are always benefits to a recession that throw up opportunities for innovative businesses. For every negative there is a positive and a well run business will exploit both the positives and the negatives to their benefit. Your competitors will be struggling; look at why they may be floundering and use those weaknesses. Businesses that survive the recession; in fact those that exploit it, will come out of the recession stronger and with fewer competitors. This may be the ugly face of capitalism but it is also business.
Part of the marketing plan should also be a detailed profile of the existing customers the business already has and clients it's looking to attract through their marketing campaign, laying out what they may require and how the business can position itself to meet those requirements. Whilst the business should be looking to attract new customers, it should also be looking at what other products and services it could sell to existing customers. Happy clients are the easiest people to sell to and the business may well be sitting on an existing goldmine by going back to see if it can upgrade or replace products they have purchased from the business in the past.
Use the marketing plan to establish ways of identifying potential customers and different ways of reaching them. These should include internet advertising, press advertising, PR, direct mail, search engine marketing, trade shows and B2B emailing.
Paul Herbert says. "Boogami is a typical example of how to launch a business successfully during difficult trading conditions. The large American owned search engines have held sway over the internet for too long and favour the large well established websites. The public have been waiting for someone who could come up with a search engine that championed the cause of small businesses who often offer better value for money but struggle to be found. The fact that its creator is a sixteen year old student makes people extra keen to ditch the faceless search engines and adopt Boogami which is innovative, superior in many ways and very different to other search engines. I would recommend everyone to try Boogami for a week or two to experience the difference. Boogami is going to be an internet phenomena and any business looking to exploit the internet should investigate the various marketing offers found on the search engine. It was a matter of having the right product at the right time, good planning and solid funding behind the marketing and PR. You cannot survive a downbeat market by cutting down on your advertising; that only leads to reduced sales."
Businesses that are prepared to take the bull by the horns and plough ahead with innovative marketing campaigns will be the companies that survive the recession. Those that cut back instead of investing in their marketing are the most likely to be the victims of the recession. Of course there are things every business can do to reduce overheads; sourcing new suppliers, logistical planning, reducing staff and managing their cash flow for example. Bit fortune favours the brave and anything that can increase sales should be strengthened not weakened; sometime it just needs a different approach and somebody to step back and assess the real situation.
The things you should and shouldn't do to survive the recession.
Seek advice on how to exploit the internet to its full potential
Revamp your website
Advertise on Boogami
Employ B2B email marketing
- Restructure and or re-price your products and services
- Write a marketing plan
- Look at other ways of reducing your overheads
- Do not cut back on your advertising and marketing
- Look at targeting other market sectors
- Exploit your current database of clients to the full
Examine, too, the level of customer service the business provides - retaining existing customers can be as important as gaining new clients; and investigate ways of developing a closer business relationship with those customers that provide the sales that produce the biggest profits. You are, after all in business for profit, not turnover or just to make money. Profitability is what will ensure your survival. Similarly, scrutinise pricing policy to determine whether products or services are priced competitively or whether price is secondary to other considerations such as quality or efficiency.
Finally, the marketing plan should contain realistic, achievable targets, along with the amount of time and money the business is prepared to invest in realising those goals, and it should include a way of monitoring how successful any marketing activities are on an ongoing basis, an this should be reviewed and updated regularly.
You too can market your website through next month's Elastic marketing newsletter.