History tells us smart advertisers will increase their marketing budgets during an economic downturn—thus making precious gains in market share. Still, it isn’t easy to find the dollars to make this commitment. Small- to medium-size businesses often take such severe hits to their bottom lines that they must do everything possible to reduce their losses.

When budgets for traditional promotional endeavors are frozen, decreased or altogether eliminated, companies should make a renewed commitment to marketing programs that offer a measurable return on their investment (ROI.)

The question is, can short-term savings from slashed marketing budgets truly offset the lost market share (and the business it represents) in the future? And, what should a company do about marketing when they must reduce budgets to match shrinking sales formulas?

We recommend the following:

1. Protect your current business. Thank your loyal customers and let them know you appreciate them. Invest in relationship marketing efforts that result in repeat sales.
2. Maintain your lead generation program. If you don’t have one, now’s the time to develop one. You’ll need new business to fill in the gaps caused by shrinking orders from current customers.
3. Increase your ROI. Focus on programs that produce direct, measurable results.

Current Plan Review — Take a fresh look at your objectives. Review your marketing strategy. Are your databases regularly updated? Is contact activity reported and followed up on? Are you implementing a consistent, ongoing, multi-tiered campaign? As any good marketer knows, one contact is never enough—make sure your plan involves multiple opportunities for a potential customer to respond.

Suspects vs. Prospects — Does your program separate the suspects (marginal opportunities) from the prospects (optimal opportunities)? If not, you could be wasting time and money soliciting business from people who won’t ever become customers. Look at your current customer profile and use the information to find more prospects with a similar profile. If a prospect (or suspect in this case) never responds to calls or other forms of contact, move him to an inactive database and move on to a more promising lead.

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Strategy — Have you identified different strategies for different decision makers? Is your message appropriate to the prospect you’re targeting? For example, providing the CEO of XYZ Company with some relevant market information likely will be a more successful approach than dropping by with a clever coffee mug. (However, the coffee mug could open the gates with Mr. Jones’ influential assistant.) Everything about your presentation—from creative strategy to the ask—is critical to engaging a potential customer and generating a response, and each communication should connect specifically with its intended target.

Materials and Support — Does your staff have the information it needs to carry out the plan? What sales incentive programs will help your team be successful? Are materials available and current—sales brochures, direct mail pieces, email campaigns, sample packets, interactive Web tools, CDs, incentives, etc.?

Measurement — If you’re not measuring your results, you’re wasting your precious marketing budget. Tracking response is critical to establishing cost per lead, cost per sale and ultimately your program’s success. It is a tool for helping you fine-tune your efforts and it’s the only way to be accountable to ROI—otherwise you’re simply guessing. Use coupons, specific offers, business reply cards, tracking codes, Internet-based tools and telemarketing inquiries, to name just a few of the ways you can track response.

Results — If they’re marginal, regroup. If they’re amazing, double your efforts. Most importantly, don’t lose sight of your program with day-to-day activities or economic upturns. In fact, your success during tough times could ultimately command additional budget and become the basis of your future marketing program.

Now is the perfect time to focus on and expand specific strategies that retain customers, generate leads and enhance your ROI. Start today!

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