DO NOT CUT MARKETING DURING SLOW TIMES!!!

From 1980 to 1985, McGraw-Hill Research analyzed 600 companies and their marketing spending. After 1985, McGraw-Hill concluded that those firms which had maintained or increased their advertising during the recession in ’81-’82 boasted an average sales growth of 275% over the next five years. But those companies who cut their advertising saw paltry sales growth over the next five years of just 19%. When is the right time to market your business? All the time.

More Viewers. More Value.

Time Warner Cable announced Q2 2008 results today. TWC added 20% more RGUs this quarter than last year's Q2...and this was our best quarter of additiona ever despite a 'weak economy' and more competition than ever!

What does this mean for your business?

First buyer trends have changed. People are staying home more often. How does that effect your business? Do you need to change your offer or creative message?

Secondly, there has never been a better time to advertise on Cable Television. There are more viewers watching more TV!

Focusing on Fundamentals

I learned a very valuable lesson from a group of twelve year old boys last week. You see, I coach basketball for 7th & 8th grade boys. We’ve got a great team; a group of committed young men with a lot of talent. We’ve remained undefeated this season… until last week.

You see, we have so much talent that we have slacked on our fundamentals; rebounding, defense, screens, etc. We played a team with a lot less talent. We took this team for granted. When we were down in the fourth quarter, we failed to adjust. We lost. With one week left in the season, we let our “undefeated” title go.

Since this is a marketing article, let me connect the dots on how this pertains to you. If you have lost your “undefeated” title in your business recently…or you are losing sleep because you fear you may, listen up.

The fundamentals…much like practicing free throws, rebounding drills, passing drills and other mundane practice activities, you must get back to basics with your marketing. When times are good, you can allow yourself to get sloppy and still pull out a win night after night. This won’t work for your business anymore.

Marketing fundamentals include:

• Reaching your core market. Most businesses remember the exception; the customer that drove 80 miles to shop them, the teenager, the senior citizen, the exception to the majority of your business. If your business is a straight line A to Z, focus more on the middle and less on the A’s and Z’s.
• Frequency delivers consumers. Rise above the clutter. Even if your target consumer doesn’t think of you first within your field…change his or her mind. If a consumer sees your advertisement over and over and over, a change will occur in their mind. You will be seen as the leader in your industry…even if in reality you are not. FedEx was not the first business to do overnight shipping; they were the first business to be known for overnight shipping.
• Do not combat things out of your control. A funny thing happens when gasoline doubles its cost within two years…people quit driving. If you are a retail or dining establishment, this could hurt. A lot. Good news, however. For every customer that now refuses to drive over five miles to shop you, there are two or three that won’t drive to that far for your competition. You can’t combat those lost sales, but you can dig deep in your backyard for new opportunities. Besides, these local customers are the ones most likely to shop more often. Treat them like gold and you’ll have new customers for life!
• Be great in all areas! All areas of your business (customer service, fair deals, customer follow up) and all areas of your marketing (consistency, creative quality - better be heads and shoulders above your competition). A great schedule without a great commercial will fail. A great commercial without a great schedule will fail. A great schedule and great spot without great research (i.e. targeted at the wrong consumer) will fail. You catch my drift?
  

To win a tight game (and aren’t they all these days), you need to practice fundamentals. The other part of this equation is you need a team that is coachable (and yes…you Mr. Business Owner are part of that team). Look for part two of this article, ‘Are You Coachable?’ where I will challenge you to improve your skills and be better prepared to win!

Marketing in a New Economy

The world has changed. Not necessarily for the worst…yet hard to imagine for the better. No, I think the world has merely changed.

You can blame the cost of fuel. Blame the mortgage meltdown. Blame the Republicans, the Democrats…heck, blame your dog. The fact remains that the world has changed and so has your business and your life. Since this little blog centers on marketing and advertising, I’ll stick to what I know and leave the rest of this fine mess to George Bush, Ben Bernanke, McCain and Obama.

For the last six years, we have all enjoyed “Marketplace Momentum”. Basically, when times are good, you can do any type of marketing and find success. But what happens when the overabundance most of us have enjoyed shrinks and our focus goes form “what do I want” to “what do I need”?

Three points:

1. Don’t give up! I challenge you to look up any newspaper from October 30th, 1929. For those of you that don’t know, October 29th, 1929 is known as Black Tuesday; the day the stock market crashed and began the ten year period known as The Great Depression. I found these following clients in The Dallas Morning News: Coca Cola, Heinz Ketchup, Simmons Mattresses, Neiman Marcus. I’m guessing you heard of these businesses? Okay, I’ll play devil’s advocate…maybe they didn’t react in time to pull their ads. Let’s look at The Dallas Morning News a month later on November 30th, 1929; Folgers Coffee, Imperial Sugar, Neiman Marcus (again). How about a year later? October 30th, 1930; Colgate, Saks 5th Avenue, Lucky Strikes, Goodyear Tire, Neiman Marcus (still going strong…).
   
   Do you see my point? In easily one of the darkest times in American history, the businesses that stayed the course not only survived…they thrived! History also shows that these businesses were successful prior to 1929, but were not yet market leaders. This holds true for periods following Pearl Harbor, the assassination of John F. Kennedy, and 9-11. Now is the time to dig in and steal share.
2. Your creative message must change. Shelve the feel good, ‘you deserve a break today’ fluff. There are hundreds, if not thousands, of alternatives to what you offer and you had better be relevant and competitive. Align your creative to what is keeping your target consumers awake at night. Calm their fears and offer them solutions to ease your pain. And in case you didn’t know it…offering $5000 off a car they can’t afford is not easing pain. Showing them how buying a gas sipper that will cut their monthly fuel cost in half does.
3. Pull, don’t push, the consumer late in the sales cycle. Consumers are more precise in their purchases today. This doesn’t mean you can’t re-convince them to choose your product before they buy…quite the contrary. Brand loyalty becomes negotiable when times get tough. Don’t believe me…go talk to the GM dealer down the road from the Toyota store. Consumers are open to new buying habits, and if you can showcase how your company can do a better job offering a similar product you may have an opportunity you wouldn’t have had a year ago. Important note: don’t misunderstand this to mean that it is okay to use stupid clichés in your ad copy…saying you have “great customer service” or “the lowest price” makes me puke, just like it makes your customers puke too!
   

Not every business will survive this so-called ‘recession’; some will close their doors. Make sure it’s not yours!

Marketing During a Recession

From 1980 to 1985, McGraw-Hill Research analyzed 600 companies and their marketing spending. After 1985, McGraw-Hill concluded that those firms that had maintained (or increased) their advertising throughout the '81-'82 recession saw an average sales growth of 275% over the next five years. But those companies who cut their advertising saw paltry sales growth over the next five years of just 19%.

Hmmm...seems like a great time to steal some share. Don't let your foot off the gas!

“TRADITIONAL DEALERIZATION” DOESN’T WORK

With its VP of Sales saying, “Traditional dealerization doesn’t work anymore,” Hyundai is taking steps to reward its best dealers with more territory, giving them the chance to move into more markets and “dot the regions with offsite storefronts, used-car lots, service centers, quick lube shops, even traveling roadshows,” according to Automotive News.

“We want to take our really good dealers and give them additional points,” Hyundai’s Dave Zuchowski said. “We want to try to have dealers take control larger market areas. We are trying to be creative.” He added “We think there are some really cool, nontraditional approaches, which are going to help (dealers’) return on investment.” As an example, Zuchowski said instead of having four dealers in one sales region, that region might be consolidated with one dealer “but maybe not with four different, full-blown facilities.”

Hyundai had been pursuing an effort to increase the number of exclusive stores, which currently account for 53% of the 750+. The new idea “is being driven specifically in high-cost markets like California, where we have some opportunities and where we have a lot of open points,” Zuckowski said. “It is very difficult to be a stand-alone Hyundai dealer in California. It has the most expensive real estate, media costs, employees’ cost, advertising, everything.”

Auto News says Hyundai may buy out highlighted stores to help dealers, it sees as more promising—in order to take control of expanded territory. It might also lease unused local store space. “You can get into a lot of empty Kmarts and empty buildings,” Zuchowski said. “We are looking at picking up short-term leases on buildings for the dealers. If it works we’ll lock up something more long term.”

Hyundai did not meet its sales goals for 2007, but Auto News says that setback has not stopped its executives from setting another aggressive target for this year. After several years of strong growth, the brand was flat in 2006 and up 2.5% last year, falling far short of its goals (467,000 units against an original target of 555,000, but still outpacing the overall market). It’s targeting 500,000 in sales this year. “Our rallying cry is 500,000 units, regardless of what the industry is doing,” Zuchowski said.

Like some of its competitors, Hyundai is changing its dealership bonus plan--last year almost a third of dealerships got no bonus from the company because the individual goals for their stores were set too high to have a real chance of being met. The new plan is a “stair-step” incentive that’s the same for all dealerships. The store that sells 4-29 units a month receives $250 per vehicle sold; 30-54 units bring the dealer an additional $500 each; and, 65+ units a month are worth $750 each to the dealership. Dealers that have exclusive stores and work with Hyundai’s captive finance arm receive an additional $100 a unit in floor-planning assistance.

Of course the big initiative for Hyundai this year is rebuilding dealer associations. Dealers will contribute $150 per vehicle ordered and the company will kick in $80 million nationally to the associations. And for tier 3 ads, the company will contribute $300 per vehicle ordered.

Younger Buyers Steering Away From Domestics

AS HARD AS DOMESTIC CAR and truck manufacturers have been trying to win younger buyers on the coasts with messages about vehicle quality, reliability and youth, they aren't swaying younger buyers just yet.

According to J.D. Power and Associates' "2007 Avoider Study," released Thursday, pro-domestic and pro-import vehicle buyers are divergent in age and region. The study found that the younger a buyer is, the more he or she is likely to avoid domestic cars and trucks. Conversely, buyers who purchase domestic vehicles are more likely than younger buyers to avoid a vehicle because it's an import.

Younger buyers also give more importance to gas mileage as a reason for purchasing, versus older buyers. Generally, domestic-vehicle buyers say styling and cost are the biggest reasons they avoid import vehicles.

The study, in its fifth year, is based on responses from over 35,000 vehicle owners who registered their cars and trucks in May this year. The study takes a contrarian look at consumer choices, focusing on the ones that got away: cars and trucks that consumers didn't consider and why.

The study found that the highest number of domestic-vehicle buyers (41%) who do not even consider import brands during the shopping process live in the North Central region of the United States, per J.D. Power.

Their opposites--younger import buyers--are concentrated in the coastal areas, per the consultancy, with the Northeast and the West Coast populated by the largest numbers of import vehicle buyers who eschew domestic vehicles entirely. The most common reasons: concerns about reliability, fuel economy, quality and depreciation.

Says Jon Osborn, director of media/marketing research at J.D. Power and Associates: "Import buyers seemed to have a list of substantiated reasons for not buying domestic, such as reputation and quality, depreciation and gas mileage."

Gas mileage, or in some cases perceived gas mileage, is the most frequently mentioned reason for purchasing a vehicle, while it remains the seventh most frequently cited reason for avoiding a particular vehicle model. In all regions, compact cars and SUVs were the most popular vehicles, followed by mid-sized vehicles.

Osborn says Hummer H3 is the most-avoided model in its segment due to fuel economy. But he says EPA fuel economy estimates for the vehicle are around the same as for Jeep Commander and Chrysler Aspen, which don't have the same stigma, and enjoy lower avoidance rates.
Also, the study found that buyers are basing their decisions not to buy a vehicle on consumer-generated content online, particularly consumer reviews, followed by expert reviews and manufacturer site information.

Among all new-vehicle buyers, the top reasons for buying or avoiding a vehicle were reliability and fuel economy, at 34% each. Then comes exterior styling, performance, and quality of workmanship. The most frequently mentioned parameter in the Northeast and West was reliability, while fuel economy was the most mentioned in the North Central region of the U.S.