A common question business owners have is, “how much money should I spend for marketing and advertising?”  Experts have offered general guidelines for budgeting such as the percentage of sales, objective and task, or competitive parity methods; but since every business situation is different, a hard and fast rule does not exist.  One often-cited consideration is the Return on Investment, or ROI.  However, if ROI was reliable and could be accurately measured, the answer would be obvious – spend every available dollar on marketing and advertising, then one would expect to recover the investment plus a healthy return.  The reality is that one simply cannot spend oneself into prosperity; instead, businesses allocate scarce resources to marketing and advertising programs with the hope and expectation of a reasonable ROI.

Once the investment is made, return can be calculated from the resulting increase in sales revenue; but there are two important intervening metrics to consider:

1) The increase in traffic in the form of visitors to the store, or inbound phone calls; and,

2) The percentage of new traffic that is converted into sales.

The first metric, the increase in traffic, is important because it is the most direct measure of the effectiveness of marketing and advertising efforts, and it can be used to calculate the cost of each new prospective customer (i.e. how much is spent on marketing and advertising to have one new person come to the store or call).  When a business is able to put a hard dollar value on each prospective customer that walks in the door and every inbound phone call, those rather routine events begin to take on increasing importance.  For example, a ringing phone is more likely to be treated as an opportunity rather than an annoyance when one realizes the company had to invest $20, $100, or even $500 or more to generate that call.

The second metric, conversions into new sales, is important because if interested prospects cannot be converted into sales, any investment in marketing and advertising is wasted (i.e. how effectively are interested prospects led to a buying decision).  When a prospective customer responds to an advertisement or promotion, they are generally ready to buy.  However, these prospective customers usually need some help to make their ultimate buying decision.  A little bit of effort can go a long way to closing a sale, increasing a sale, establishing a relationship, and earning a long-term customer; but indifference or neglect, or even the perception of indifference or neglect, can ruin the opportunity.  This is especially true for inbound phone calls.  For example, when a business receives a call from a prospective customer and places that call on hold to transfer the call, gather information for the caller, finish a conversation with another customer, or for any other reason, the tendency is for that caller to want to hang up.  However, steps can be taken to control that tendency, reduce the number of hang-ups, increase the percentage of sales, and increase the dollar value of each sale.

Taking advantage of the time callers spend on hold by providing a program that reinforces and supports the company’s overall marketing message will decrease hang-ups by up to 40%, effectively stretching every dollar spent on marketing and advertising.  Moreover, callers who are responding to advertising or promotions are already receptive to the message.  In fact, they are calling to hear more about the products and services the company has to offer, and 20% of callers surveyed admit they have made a buying decision based on information they heard while on hold.  On hold messaging works, and it can be one of the most potent tools a company has to get the most out of every dollar spent on marketing and advertising.

Larry Pfeil is the Vice President of A Cooler Audio Technology, Inc., developers of the patented NetSmart On Hold® Internet-based on hold messaging systems. ACAT Specializes in on hold messaging systems and services for large multi-location accounts. You can find out more on our websites at www.customercareonhold.com and www.acat1.com.

Article Source:http://www.articlesbase.com/marketing-tips-articles/stretching-marketing-budgets-getting-up-to-40-more-for-every-dollar-spent-1565902.html

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In a recession most business leaders will mentally accept that trading conditions are difficult and as a consequence lower expectations/goals. This mind set can then become self fulfilling as the mental state that creates this thinking will determine the actions of that individual. His reduced expectations are felt by employees and, guess what, standards slip, performance suffers and targets are not met but he accepts it all.

Many business owners will expect poor performance or even “freeze” become inert and incapable of making decisions.

If you think you’ll lose you will, if you believe you can win you very probably will.

If you are responsible for dictating budgets don’t cut the marketing budget, if you are responsible for marketing but don’t dictate the budget, fight to ensure it isn’t cut with reasoned argument and the proven factual arguments for maintaining spend

The key to success is to not cut your marketing budget and do nothing but to revise your marketing strategy. The following ideas are all crucial marketing activities in a recession and your strategy should be altered accordingly:

1. Hold back on any “test” marketing and concentrate on doing more of what you know already works.

2. Ensure you have an effective programme of keeping in touch with existing customers to ensure loyalty, using every means possible; e-mail, letter, newsletters, phone call, personal visit, make them feel wanted especially during a recession, if you have their confidence they’ll want to stay safe…with you.

3. Identify the element of your prospects and existing customer base least likely to be affected by a recession either through the nature of their business or their financial strength and concentrate your marketing strategy on them, seek successful vertical markets. Avoid marketing to sectors most affected they will prove to be less profitable and obviously more vulnerable.

Try to develop a “We are the experts” mentality in your marketing. In a recession customers want to stay safe with somebody who knows what they are doing….”the Authority” on a subject.

For over 17 years we’ve been designing and fulfilling creative solutions for hundreds of businesses, helping companies like yours to promote their business services with the creative talents of our expert team of graphic designers and print professionals.

www.rasgroup.co.uk

Article Source:http://www.articlesbase.com/marketing-tips-articles/marketing-strategy-in-a-recession-1468678.html