How to Effectively Engage Your Customers During Uncertain Economic Times

Your Gut Is Right.
You don’t need an “official” announcement to confirm what you know. Food and energy prices are spiraling upward. Every week, a major retailer is either up for sale, filing for chapter 11, or closing “underperforming” stores. The mortgage crisis has sent shock waves through every financial market and even a walk through your local mall today reveals empty storefronts that were places of business just last week.

It’s not a pretty picture. But historically, the United States economy experiences a recession every 5 to 7 years. So while today’s economic situation is certainly unwelcome, it is not altogether unexpected.

Two things directly affect you and your organization. From the business perspective, there is the kneejerk reaction to cut “unaccountable” marketing expenses to the bone and go into “survival mode.” From the consumer’s perspective, just “getting by” costs more, employment is uncertain, and finding the best deal on everything becomes a high priority. As a result, getting frazzled consumers to engage with your brand becomes even more challenging. Read on to learn why this may be the opportunity you’ve been waiting for.

“Where there is change, there is opportunity.”

What can the past teach my marketing group about weathering an economic downturn?

Economists have been studying the effects of advertising spend on business outcomes since the 1920’s. In a nutshell, where there is change, there is opportunity:

Short Term Results:
Companies that maintain or increase marketing during an economic downturn experience share increases twice as large as firms cutting marketing budgets.
(source: World Advertising Research Center,

Long Term Implications:
Companies that cut back on advertising during an economic downturn experience a drop in sales and profits. They also lag 2-3 years behind competitors who maintained or increased advertising, once the downturn is over.
(source: World Advertising Research Center,

It’s A Numbers Game:
Traditionally, during an economic downturn, about 25% of companies increase or maintain advertising spend, while 75% decrease it. A spring 2008 poll of CMOs revealed that 77% expect their budgets to be flat or shrink this year.
(source: Forrester Research,

Amidst so much change, can there be any marketing opportunity?

Growing your company’s marketing program right now is difficult. Using your existing marketing budget more intelligently is not. It’s safe to assume that 3 out of 4 of your competitors are not, given historical precedent. Why not take advantage of it?

Today, marketers are highly accountable and must show how their decisions have moved the sales needle (and the bottom line). The best way to accomplish this is through direct marketing channels—now is the perfect time to add highly personalized direct mail and e-mail to your marketing mix. And unlike other channels, direct marketing is testable, scalable, flexible, and most importantly, measurable.

Now is the perfect time to add highly personalized direct mail and e-mail to your marketing mix.

What is working today?

The Power of Personalization. Customers want to receive information from advertisers, as long as the information is relevant and meaningful to them. Advances in database systems and variable content management tools have made it possible to produce direct mail and e-mails that are literally a “segment of one” per recipient—at very reasonable costs.

Customers respond to these offers because the message speaks directly to them. And instead of the usual 1-2% response, advertisers have seen response rates well into the double digits on highly personalized campaigns.

The Critical Role of Offers. Offers delivered via direct marketing have many business purposes, including launches, trials, grand openings, helping underperforming stores, customer acquisition, and retention. And during an economic downturn, customers are actively looking for offers. A recent survey found that 67% of US consumers at all income levels were much or somewhat more likely to use coupons when the economy is in flux.