When there’s a cold going around I decide I’m not going to catch it. I know that sounds ridiculous, but it’s worked for me for quite a few years now. And I regard talk of a recession as a bit like an unpleasant virus because it can be contagious.
Reports in the media about the credit crunch, escalating bills and reduced spending give a picture of general doom and despondency. Are you being infected?
Now, don’t get me wrong I do appreciate many people, both consumers and businesses, are finding things more difficult. I also believe we, as business owners, have a decision to make; accept all the negative reports, take part in the recession and accept the dire consequences it can lead to.
Or, decide not to take part. Decide to take action that makes us – and our business – stronger.
Is it possible to come out of a recession stronger?
In my experience, yes. I was talking with a close friend (I’m godmother to his son) and business entrepreneur. And we realised that we had both come out of previous recessions stronger than we might have expected to. In fact, my original computer training business – back in 1990 – was born out of a recession when I was made redundant from my position of General Manager with a local computer supplier.
Why had we survived so well? Because we both avoided…
The Biggest Mistake Businesses Often Make in a Recession
Stop actively looking for business from existing and new customers.
When I say actively I’m talking, as you’ve probably guessed, about marketing. Being seen as a vibrant, open-for-business company is vital to your survival, let alone your growth and success when there is an economic downturn.
Yet as soon as business is a bit slow and the order books start to dwindle, for many the thought of investing in advertising and marketing is abhorrent to them. The mentality is “We can’t afford to spend on advertising and marketing!”
Why is this when the reality is “Can they afford NOT to spend?”
Lack of Knowledge Can Lead to Your Downfall
I believe the reasons why some business people think this way is lack of knowledge in two specific areas…
- They don’t know how effective their advertising and marketing is.
- They don’t know the true value of each prospect they find who turns into a loyal customer.
Measuring your marketing spend against the value of the sales it attracts is the only way you can be sure of having control of your business at any time. When you’ve got this control you can choose not to take part in a recession, if it comes.
Back to Basics
Over the next few posts I’m going to suggest a few different marketing approaches for you to consider in your business.
Before I do that let me remind you of a few basics, linked to the two points above. (Sometimes it’s good to be reminded, don’t you think?)
How to Measure The Effectiveness of Your Marketing
There’s only one way to be sure your marketing spend – whether that’s time or money – is a good investment… only use direct response marketing in your letters, adverts, web pages, newsletters and flyers. Gear them up to elicit a direct action from your target audience. And monitor the responses you get.
Here’s an example of what I mean.
You decide to place an advertisement in a local publication targeted at your specific market.
You create a direct response advert and include a unique code so you can measure the response to that specific advert, in that specific publication in that specific issue.
The advert costs you £500.
The publisher tells you it has a readership of 25,000 – and says “It’s only costing you 2p to reach each reader!” That would be a fantastic investment if all those readers are real prospects and there is a high chance they will respond. You wish! 
The only figure that is relevant to you is the actual number of people who take action and respond to your advert.
Your advert goes out and you get 10 enquiries. You now know it cost you £50 to get each enquiry. Let’s say you convert half into sales. You have 5 new customers, each cost you £100 to acquire. (The price of your advert divided by the total number of new customers).
The next point is the one that many business base their future marketing decisions on. And it’s where they often go wrong.
Question: “Is running this advert worthwhile?”
On face value you could decide “No!” if the immediate sale – the first sale – does not deliver a high enough profit to cover the advertising cost. The real question should be “What is the profit value of all the subsequent sales I’ll make to this new customer?”
If you are going to blossom in a recession you must have a strong, effective, follow-up system; sometimes called the back-end. Once your new customer buys, especially if you’ve delivered a good product or service, they are more open to considering other products or services you can deliver. Add these onto the initial sale and you could find that seemingly expensive advert is not such a drain on your resources after all!
Before you start any advertising or marketing campaign you need to know two things:
- The average profit value of each of your customer’s transactions
- The number of purchases they are likely to make before they stop (if they ever do) buying from you.
Multiply these two figures and you have a fair idea of the true worth of your new customer (sometimes called lifetime value).
So, going on from my example…
let’s be conservative here and say your first sale profit value is only £80. That means you are making a loss of £20 on each new sale. At first glance that looks as though this is not a worthwhile advert to run again. And, as I said, that’s what many business owners base their decision on.
But if you’ve got your strong follow-up in place and you know that, on average, your customer’s subsequent purchases deliver a £100 profit each and they normally buy another 6 times over a period of two years – then your total potential profit is £680. Take away the original cost to acquire the customer (£100) and that gives you an overall expected average profit of £580 per customer.
Now placing that advert makes more long-term economic sense, doesn’t it?
Recession Proof Tip 1; Have a Strong Back-End
and make sure you know how to measure your true return on investment.
Look out for more Recession Proof Tips, including some direct response marketing ideas for you to consider.
~ Carol Bentley
Add to: | del.cio.us | digg it
I know – it is a classic style headline, but if it has intrigued you then I guess it is still working.
There are some blatant writing mistakes that it is easy to to make when you are dashing off a quick email or two. And, as the article I’ve linked to below explains, that can be forgiven when it is between friends. Make those same mistakes in a business email and your credibility could be wiped out.
I’m talking about classic mix ups, like your and you’re; its and it’s and other faux pas.
Check out the 10 mistakes described in this article.
It makes interesting reading – and if you do spot something you have problems with it may help you avoid making that mistake again. Of course, if you are fully aware of all the examples and how they should be used… then you can congratulate yourself, can’t you?
~ Carol Bentley
P.S. I’ve decided to opt out of the recession – look out for posts on suggestions to help you do the same.
Have you ever come across the American Marketing Specialist, Jay Abraham? If you have, you will definitely be intrigued by what I discovered today…
I first met Jay at one of his 4-day programmes in London; I think it was 1995. I remember paying £4,500 (a huge investment) for my place in the hotel conference suite where over 200 other marketing-wisdom starved entrepreneurs eagerly soaked up every drop of knowledge he and his co-presenters revealed.
I still use his collection of newsletters, ‘Your Marketing Genius At Work’ and marketing guide ‘Money Making Secrets of Marketing Genius Jay Abraham’ for inspiration.
So why am I telling you this?
Because someone who has created $5.4 billion in extra sales and profits might know a thing or two about successful marketing, don’t you think?
And I’ve just discovered he’s virtually giving away a treasure-trove of that marketing expertise for an unbelievable $39. That’s less than £20 or €25! You can’t even get a good meal with a bottle of wine for that!
What’s the deal?
I’m not going to give you the whole speel – you can read it for yourself at Jay Abraham’s Crazy Offer but here’s just a taster of what he’s delivering…
Taken from his offer website:
- Abraham 101 – Explains his most closely guarded money making secrets.
- Ultimate Market Domination Report – Teaches how to at very least double your income every 15 months or less… forever!
- Nine Drivers of Explosive Profit – Teaches you the fastest, biggest ways to multiply business, increase profits, build massive business wealth with little or no risk, very little time, and surprisingly modest effort.
- Multiplying Your Business Wealth – Tony Robbins interviews Jay Abraham
- Winning Big With the Internet and E-Commerce – The Key Factors in Developing a Powerful Web Strategy
Read more about it…
Of course, there is a catch – well 2 actually…
1. The material is available purely as a download – I guess that’s the only way to make delivering such a huge amount of material viable for this minuscule price.
2. After using the concepts he discloses, he’s asking you to share your success and experience with other people.
He does offer his usual 365-day “You’d Better Make Money or I’ll Double Your Money Back’ guarantee (actually it was at Jay’s event that I first came across the powerful principle of risk-free guarantees).
Is it worth going for? At $39, what do you think?
I’m certainly not going to miss out on this chance to enhance my marketing treasure-chest – I suggest you take advantage too.
On second thoughts – perhaps you shouldn’t because if you do, you probably won’t need to read my blog posts any more, will you?
~ Carol Bentley
P.S. Although he talks about creating a marketing tidal wave in America – I reckon using this could make it happen anywhere!
P.P.S. It is an affiliate link I’ve given you above… that OK with you?
Anyone involved in marketing will have come across the quote from John Wanamaker, founder of the Philadelphia store of the same name:
“Half the money I spend on advertising is wasted,
and the trouble is I don’t know which half.”
If you sometimes feel like this, then what I’m about to share will be an inspiration to you.
My good friend, Ed Rivis, knows the true power of advertising – when it is done properly. What do I mean by done properly? I mean it is…
- Targeted at the right audience like a master archer focusing his arrow on the bullseye
- Written in the most effective style* – as an advertorial (an advert that looks like an article) so your reader is engaged in your message
- Contains an offer that hits the reader’s hot-spot so they can’t help but respond
- Thoroughly tested as a smaller advert before investing in larger, more expensive advertising space
- Measurable – either through coding or by using a unique response mechanism. You cannot test if anything is working if you have no way of measuring it.
* Incidentally, David Ogilvy said…
“There is no need for advertisements to look like advertisements. If you make them look like editorial pages, you will attract about 50% more readers.”
Would You Like 1,035 Responses To An Advert?
Pop over to Ed’s blog where he shares, in a video clip, the details of what he did to get 1,035 responses to his advert.
As I said it may inspire you to reconsider advertising if you’ve dismissed it as a “waste of money” in the past.
Have a good weekend,
~ Carol Bentley
Add to: | del.cio.us | digg it
Some of the adverts in your local Yellow Pages haven’t got a cat-in-hell’s chance of bringing enough business to cover the cost. Asking these three questions could prevent you making the same mistakes.
The adverts I’m talking about are frequently those ‘designed’ by the Yellow Ad’s ‘graphics team’.
You know the type I mean… the
‘Name… Rank… Serial Number’ style
Name: Business name; unless you have a highly descriptive business name this is not going to make you stand out from the crowd.
Rank: What the business does; standard wording that rarely describes any benefit to make the advert more appealing than the other entries.
Serial Number: Contact details; with a phone number as a minimum.
Here’s Three Questions To Ask Yourself Before Deciding
To Advertise in any Long Term Publication…
Q1. “Is this directory the first place my target audience is likely to look for someone who can provide my services/products?”
Q2. “How can I make my advertisement stand out from my direct competitors?” (I’ll give you a hint – think about the results your prospects are looking for).
Q3. “Is the advert I plan to use tested and proven elsewhere before committing to a 12 month publication?” Find a local business directory or publication that is issued more frequently – say monthly – that your prospects are probably looking at. Test your advert:
Test
- the headline;
- the offer;
- the content;
- the layout
and remember to use a reference code so you can measure which version is the most successful. Then – and only then – should you agree to place that tested and proven advert in a long term directory like Yellow Pages.
Never, ever leave the design of something as vital as your advertisement to the directory publisher – you can’t afford to waste money like that – can you?
Carol Bentley
Add to: | del.cio.us | digg it
OK – it has been an extremely busy week so a few minutes light relief is welcome. Especially something that makes me smile as these did…
The Washington Post’s Mensa Invitational asks readers to take any word from the dictionary, alter it by adding, subtracting, or changing one letter, and supply a new definition.
Here are the winners:
1. Intaxication: Euphoria at getting a tax refund, which lasts until you realise it was your money to start with. (my personal favourite)
2. Reintarnation: Coming back to life as a hillbilly.
3. Bozone (n.): The substance surrounding stupid people that stops bright ideas from penetrating. The bozone layer, unfortunately, shows little sign of breaking down in the near future.
4. Giraffiti: Vandalism spray-painted very, very high.
5. Sarchasm: The gulf between the author of sarcastic wit and the person who doesn’t get it.
6. Inoculatte: To take coffee intravenously when you are running late.
7. Karmageddon: It’s like, when everybody is sending off all these really bad vibes, right? And then, like, the Earth explodes and it’s like, a serious bummer. (second favourite)
8. Decafalon (n.): The gruelling event of getting through the day consuming only things that are good for you.
9. Dopeler Effect: The tendency of stupid ideas to seem smarter when they come at you rapidly.
10. Arachnoleptic Fit (n.): The frantic dance performed just after you’ve accidentally walked through a spider web. (oh, I sooo relate to this one!)
11. Beelzebug (n.): Satan in the form of a mosquito, that gets into your bedroom at three in the morning and cannot be cast out.
Which is your favourite? And can you go one better and come up with a word and definition of your own? Share your word inventions, hit the comment link.
Happy Independence Day to all my American readers – have a great holiday.
And have a good weekend.
~ Carol Bentley
You have probably noticed I have been a bit quiet this week. That’s because I’ve been extremely busy on a new project which has got me all fired up! In fact the only reason I am adding this post is because an email just came in I thought you might want to know about.
On February 6th I shared my thoughts about using the mindmapping software from Buzan – iMindMap™ (read the original post at Getting your thoughts on paper – opens in a new window).
Today’s email came from the Buzan team telling me they are soon to release version 3, which contains three new editions of the software. And Tony Buzan is giving a surprisingly generous gift to anyone who already has iMindMap™ before the release date – more about that below. The three new versions are:
Elements: for basic mind mapping
Professional: for businesses and organisations. It includes a high level of integration with Microsoft Office and Open Office
Ultimate: “The ultimate package of features, including an impressive creative and comprehensive Project Management System and publishing tools.” You can import mindmaps created in MindManager and FreeMind.
Naturally I took a look at what the new versions cover – impressive. But I had an ulterior motive because I was invited to get in early by joining their private testing team. If the new features looked good, it might be just what I need for my new project and getting to grips with it now would be great (apart from which I can spill the beans to you on what’s good or not so good! )
So yes, I’ve taken up the invitation to get the early releases (who wouldn’t?)
Tony’s Gift
Giving upgrades at a reduced price is standard procedure for many software companies. Some generously give free upgrades to the next version of the same level of a software package. So I would have expected to get a special deal on this new version of iMindMap™. What I didn’t expect was to be told…
“Tony Buzan is making a once only offer for iMindMap™ users to save over UK£90/US$180/EUR€99 by giving away free upgrades to the ‘Ultimate’ Edition of iMindMap™”
…that’s the top-of-the-range edition – with all the new bells & whistles. And it’s a saving of almost double the current price of a single licence. Not bad.
Plus – the offer applies to everyone who has a copy of the current iMindMap™ before the release date of version 3.
So – if you’ve been thinking about treating yourself to a mindmapping program, here’s one to consider – iMindMap [Affiliate].
I’ll let you know what I think of the new version before the official release date. As they say… ‘Watch this space.’
~ Carol Bentley
Wedding planner: The recommendations you discussed here are really useful. It abso...
Samantha: That is kind of hard of a bargain when monetizing online. That wa...
Lynkez: Dear customer, to effect reliability and a sustainable flow we he...
Nancyshanice: handling your customers well is something very nice, because you ...
Carol Bentley: Hi Brian, (sorry for the delay in replying, your comment got bloc...
Brian Moseley: When I open your RSS feed it puts up a whole lot of strange chara...