Ad Talk 101 Blog

Straight Talk about Advertising
June 25, 2009

Recession and Market Share – Part 3

Author: Mark - Categories: Uncategorized - Tags: , , , ,
Use the Recession to Gain Market Share
You’ve probably heard it is easier to increase your market share during a recession. But how important is market share anyway.
Market share is everything! With all business, there is a finite amount of money available to that business sector. The metaphor would be the pie chart showing the whole pie as all the available revenue with a slice of the pie representing your market share.
There is not much you can do alone to increase the size of the pie. That is determined by many factors beyond your control. So to increase your business, you need to either maintain or increase your market share or slice of the pie in proportion to the size of the whole pie.
We talked about the importance of maintaining market share during a recession so when the recession is over you do not lose share to your competition. But if you have the means to increase your advertising during a recession, you can increase market share easier and more cost effectively as your competition cuts back and media rates drop. When the economy recovers, your competitors will find it more expensive to gain back the share they lost to you.

The reason many businesses don’t have the means to increase advertising during a recession is a lack of faith in this concept. I see many businesses in Central Pennsylvania making this mistake. It takes a lot of faith, because during the recession you could increase advertising and other marketing efforts and still see negative growth. Experts like Harvard Business School professor John Quelch says “It is well documented, brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at a lower cost than during good economic times.”

June 24, 2009

Recession and Market Share – Part 2

Author: Mark - Categories: Uncategorized - Tags: , , , , ,
Creative Ways To Maintain Market Share During a Recession
Making sure you maintain market share for your business is key to making it through a recession. Advertising is essential to maintaining or growing your market share. So what if you have to cut advertising? There are ways to keep your advertising going while saving money depending on the amount of effort and innovation you are willing and able to contribute. Unfortunately a lot of business owners choose to stop or cut advertising instead of trying to find more efficient ways to do it.
You can be sure if you haven’t changed the way you advertise over the past five or more years, you are wasting money. This is due not only to economic conditions, but the effect new technology has had on consumers. The advertisers who choose to continue advertising the same as always (they would rather deal with the devil they know than the devil they don’t know) will find the economy is not the only reason they are losing business.
This is the time to try new advertising techniques. Do not be lazy, complacent or timid. Leave that attitude to your competition. The objective is to not lose market share and increase market share if possible.
The numbers of new and innovative ways to advertise are limited only to your imagination. Here are some creative ideas that may help you get started:
  • Cross Promote by offering discounts with same customer profiles.
    Bowling Ally & Skating Rink
    RV Dealer & Motorcycle/ATV
    Restaurant & Restaurant (people don’t always eat at the same place)
    Furniture Store & Builder
    Hair Salon & Dress Shop
    Car Dealer & Car Wash
  • Creative signage can reach large audiences at a much lower cost than traditional media such as radio, TV or Newspaper. Yard signs, posters hung in businesses and signs on vehicles are just a few ways you can inexpensively reach large audiences.
    • One business here in the Susquehanna Valley covers unusual vehicles with bold, patriotic designs and the name of his business and web site. He then places these vehicles in high traffic locations where he can reach mass audience. Not only are the vehicles hard to miss, people talk about them, generating more exposure through word of mouth. Plus, he can geographically target areas of the market more effectively than with most traditional media. The money he saves on media advertising could quickly pay for the cost of his painted vehicles.
  • If you have access to a few hundred feet of road frontage, something like the famous Berma Shave concept, originally used in the 1940’s and 1950’s is still very effective.
  • Improve the return on your advertising investment by better targeting your ads. If you are using mass media such as radio, focus your ads. Do not buy an ad schedule to run across all day parts. If most of your prospective customers listen during a particular time of day, buy fixed times so you can reach that specific audience with high frequency.
  • If direct mail has always worked for you, consider the alternatives. With current postage rates, it may be cheaper to hire students to walk around and place door hangers. E-blast is a good possible alternative to direct mail also. Plus you can track your e-blast, which may help you improve responses.
If your marketing strategy is to “just survive” through this recession, don’t forget you may need to make up for lost revenue when it is over and you may never be able to catch up.
June 23, 2009

Recession and Market Share – Part 1

Author: Mark - Categories: Advertising Tips - Tags: , , ,
Do Not Let a Recession Reduce Market Share for Your Business
You probably hear advertising media reps advising you to advertise now more than ever due to the recession. Obviously it is in the reps best interest if you do more advertising. But is it in yours? Take into consideration the importance of your market share before you automatically reject the idea of maintaining a solid advertising program.
I see some businesses using the recession as a reason to cut advertising. The rationale I hear on the streets of Central Pennsylvania is “why advertise? No one has the money anyway.” Or, “I get lots of people shopping but no one can get credit. So what good would it do to advertise?”
While it is true your return on advertising could be less during an economic down turn, consider the importance of your market share. When you stop advertising, you risk losing market share, which no one can afford, especially these days. Perhaps if all your competitors decide not to advertise, you will not lose share. But there is a risk of consumers changing their habits. One of the phenomenons of the current recession is how it has changed consumer habits. Consumers may just decide they don’t need your product or service anymore once you lose them.
It is understood that some businesses have no choice but to cut advertising. But if you do, look for creative ways to keep awareness so when the economy does improve you’re not behind the eight ball.