When cash flow is tight and times are tough, one of the first areas to cut back on is your marketing budget. But how do you measure the worth of your existing activities and what should you cut? Here are some ideas:
Retire Products and Services
Do you have any products or services that simply aren’t generating a profit, despite concerted efforts to fix sales? Are your lower margin products outselling their higher margin counterparts in similar product lines? Consider retiring these lines, although be sure to look at incremental sales as a whole. For example, if lower margin products are selling at volumes sufficient to make up for the difference in margin, then axing them may not make sense.
Walk Away from the Wrong Customers
What about your customers? If low margins or under-priced work is impacting your bottom line, then it might be time to nicely step away from these customers. As you refine your marketing strategy, it’s important to understand your sweet spot or niche and focus on it. For example, if you run a high-end landscape business but find that your sales (and energies) are being cannibalized by endless requests for one-off leaf removal jobs or spring clean-ups, then it’s time to think again about whether these are the customers you really want.
Cut Costs by Marketing Smarter
Once you know what products and services are working and which aren’t and you’ve made some strategic decisions about your target market, it’s time to think smarter and save pennies as you execute your new strategy. Here are five low-cost marketing techniques to consider:
1) Step Up Your Social Media Activities
If your customers are active on social media, then you should be there, too. When marketing dollars are scarce, bump up the time and resources you allocate to Facebook, Twitter, and LinkedIn. They’re free. Listen to your customers; engage with them and run promotions through your pages. With time and focus, the pay-off can be huge. Start a blog or reinvigorate your existing one – look for opportunities to guest blog on other sites. For more tips take a look at these blogs:
- The “Ultimate” Small Business Guide to Social Media Marketing
- 8 Tips for Keeping your Business Blog Current, Relevant and Fresh
2) Use the Power of Reviews and Referrals
Referrals and reviews are free and a great tool for spreading the word about your business. That being said, reviews can also make or break a small business, so while you want to encourage them, be sure to monitor and respond to them. Start by claiming your business listing on sites like Google Places, Yelp and Yahoo Local, and monitor and respond to reviews. If a customer searches for products by location, then there’s a good chance that your listing will show up near the top of the results page. Don’t shy away from criticism or feedback on social media either; commit to making changes and let your critics know that their feedback is heard. For more tips, read:
- Get to the Top! Tips for Making your Business Web Site More Prominent in an Online Search
- Managing Your Online Reputation: How to Respond to Customer Reviews
3) Refine Your Niche
Businesses that boom in a recession tend to be those that focus on what they do best. Whether you’re the most reliable landscape business in town (i.e. you turn up when promised) or you offer something no one else does in a very particular market, staying focused on your strengths is beneficial.
How can you refine what you have to offer? Is one area of your business more profitable than others? Could you refine your strategy and reallocate your limited marketing dollars to focus on growing this area? For more tips, read 5 Ways to Find the Right Niche and Target Market for Your Small Business.
4) Get Out in the Community
Another low-cost but high profile tactic that works well for small businesses is getting involved with community events, fairs, and programs. A business that is active in the community often wins the hearts and minds of consumers. Because the host does the promotion for these activities, it’s often easier on your pocketbook than other marketing programs. SBA guest blogger Rieva Lesonsky offers some great advices about community marketing in this blog.
5) Be Strategic About What You Cut
If any tactics aren’t working for you, don’t be afraid to cut them. Have market dynamics changed how effective your tactics are? Weigh the pros and cons of pulling out of less productive tactics and refocus your energies and limited budget elsewhere. For example, if you can’t tie any measurable gains to the expensive ads you run in your local paper, consider beefing up your referrals strategy instead.
What cost-cutting tactics have worked for you? Share your experience on our Marketing and Advertising discussion board.