Recently, during a consultation with a client regarding their business’s marketing strategy, we confronted the challenge of maximising ad spend within a constrained budget. This limitation stemmed from a decline in business, a scenario all too familiar to small business owners and entrepreneurs in today’s current market. While our entrepreneurial spirit drives us, sometimes, we fail to anticipate downturns.
One of the most common unanticipated challenges is the inevitable downturn in business. Regardless of the industry, this downturn often catches small and large businesses off guard, triggering panic as they realise the need for action. However, the dwindling budget restricts their ability to invest in acquiring more business, exacerbating the issue.
The lesson is clear: the optimal time to invest in marketing is when business is thriving. During periods of growth and prosperity, expanding the customer base necessitates increased marketing expenditure. Waiting until business is in decline severely hampers the potential for growth, like neglecting to catch water when it’s pouring and then running around with a bucket trying to catch rain in a drought.
Now, if you find yourself amidst a downturn, there are three strategic moves in marketing: building brand awareness, generating leads, and converting leads into sales. With a limited budget, prioritising conversion becomes imperative. Every marketing investment should directly impact sales, driving immediate results.
The most fertile ground for conversion lies within your existing customer base. Additionally, targeting your customers’ friends and family presents a valuable secondary audience. Crafting compelling offers tailored to these audiences and deploying targeted communication and ad spend is paramount.
In today’s marketing landscape, allocating advertising dollars strategically is very important, and digital marketing emerges as the prime destination due to its immense reach and low cost. With 4.54 million social channel users in New Zealand spending an average of 2 hours and 31 minutes per day online, 93% of the population using Google for search, and 98% of them accessing it via mobile devices, the digital sphere is where the people are.
The burning question remains: how much should you allocate to marketing in your business? On average, businesses invest around 9.5% of their revenue into marketing efforts. However, this figure can vary, dipping as low as 5% for manufacturers, hitting around 10% for financial services and tech industries, and surpassing 10% for retail e-commerce ventures.
Clearly, during prosperous periods, your marketing budget tends to expand, allowing you to reach a broader audience and achieve better conversion rates. This not only establishes robust brand awareness but also cultivates a loyal customer base. Consequently, when market conditions take a downturn, you have a solid foundation to rely on. Your meticulously crafted efficient recession campaigns can then work more effectively, leveraging the groundwork laid during more buoyant times.
Remember, the best time to invest in marketing is when your business is flourishing. By seizing opportunities during prosperous times, you fortify your business against downturns, ensuring sustained growth and resilience.