Newsletter

Welcome to the latest edition of Stratamar, inc.'s periodic newsletter.

Thanks for your ongoing interest. Please feel free to contact us at any time with questions, suggestions, etc.

MARKETING IN A DOWN ECONOMY

Whether or not we are in an "official" recession (two consecutive calendar quarters or negative economic growth), no one can deny that the economy has slowed down over the past fifteen months. But, if you are looking at the long haul, this is the best possible time to step up your marketing efforts.

It's very tempting to cut back on marketing and promotions when cash gets tight - after all, it is an obvious expense item, and many companies do a poor job of tying results directly into their efforts. But, if you cut back now, you're making the decision to do no better than your competition during the trying months ahead. Instead, take advantage of a golden opportunity to jump ahead of your competitors who ARE cutting back. People and businesses are still buying, so why not make sure your ad is the one they see when they're shopping for goods and services?

If cash is a problem or concern, consider these options to make your money work smarter and harder:

• Negotiate with the media that you use. Most media outlets are also suffering a slowdown, and are more amenable to reducing prices from their "rack rates". You might even be able to lock in a long-term deal at prices that will look like major bargains a year from now.
• Eliminate the low-response tactics from your marketing mix. Make sure you ask each customer what drew them to initially contacting you. While not a perfect approach, the question will give you a lot of guidance towards which ads or efforts bring in the most prospects for each dollar spent.
• Use lower-cost methods of executing the tactics that are working. Perhaps your four-color mailer could be trimmed to two colors without losing effectiveness. Also in the direct mail arena, postcards may well be a way to keep in your clients' minds while trimming costs. On internet-based promotions, the latest technological tools may be too expensive to be cost-effective for reaching your audience, particularly if you are selling a mass-market item to a base of AOL users with slow dialup access.
• Work your current customer base harder. Marketing theory indicates that it costs 7-10 times more to generate a sale from a prospect than from a current customer. If you have to make a choice on which target to approach, your current customer base is almost always the best bet.
• Invest in training your Customer Service Representatives. At the least, making them more expert on your company and its offerings will give them more opportunities to cross-sell customers. Further, training them now will ensure that you have a good cadre of expert managers when the economy does turn around later this year.

CHANGES IN CELL PHONES

As many of you are probably aware, the Federal Communications Commission has mandated that all cell phones sold in the U.S., starting this coming October 1, be equipped with global positioning devices. On the surface, this is being done so that people placing emergency calls can be located even if they do not know where they are.

One marketing outgrowth of this change is that it will be feasible for companies to send ads, coupons, and the like to your cell phone when you are near one of their outlets. Consider, for example, Cedar Point being able to send a $10.00 daily admission discount coupon to cell phones within a 30-mile radius each evening. This may well result in some increased business for them.

The rules for sending and receiving cell-based ads are still being devised and refined. While there are many benefits for marketers, users may well be upset if cell phone spam starts to reach levels experienced with email. We'll try to keep you posted on changes and trends as they gel. One thing we do expect is an explosion in instant messaging services, particularly in the under-30 crowd. Keep in mind that better than 90% of the teens in Finland have cell phones, and use cell phone messaging as their preferred method of communicating with peers.

ADVERTISING AGENCIES

At the risk of irritating some readers of this forum, it probably is a good time to check the credit ratings of your main ad agencies. Particularly in the internet world, hundreds of agencies have closed this year. There are all too many cases where clients have paid agencies for advertising space in newspapers or web sites, but the agency hasn't forwarded the money to the media. Usually, this leaves the client (you) still responsible for paying for the ad space.

How do you protect yourself if your agency's finances look shaky, but you like their work? Consider paying the agency hourly rates for their work, but having all bills for media space sent directly to you for payment. I've done this for years, and have never had any objections.

PRIVACY

Be ready for a record number of bills on Capitol Hill this summer regarding privacy. Already there are major initiatives regarding privacy in the financial, medical, educational, and genetic data areas, as well as numerous proposals to restrict unsolicited emails. The unfortunate part is that all of these initiatives could be avoided is all marketers just exercised a reasonable level of ethics. For example:

• Always give recipients of your advertising an opportunity to easily delete their names from your list
• Tell your list members if you plan to sell or trade their names, and let them opt out of that sale or trade
• Remember that people consider their data to be their property, not yours. Research shows that the vast majority of people are willing to let you collect data if you explain how it will benefit them. By the same token, the vast majority rapidly get irritated if you collect and sell/trade every move they make. If your purpose is legitimate, be open about it.
• Be judicious about contacting your clients and prospects. Depending on your clientele, a monthly or even weekly solicitation may be acceptable. Don't go to the extreme of a certain internet spammer who, lately, has been emailing me ten times a week on six separate days (and always asking why I don't respond).

NEED HELP OR HAVE A QUESTION?

Of course, there's no way we could let an entire newsletter go by without one bold, self-serving pitch. We're here to be your marketing experts whenever you need it, whether it's for an entire project or just a few hours to give a fresh perspective on a situation. We've recently completed projects for new approaches in online banking, non-profit fund raising, software marketing, and education, and we'd love to put some of that expertise to work for you. Even if you just have a question you'd like to discuss, or see addressed in the next newsletter, email or call us at your convenience.

Have a great June.

Neil Brown, President
Stratamar, inc.
neilbrown@stratamar.com
614 946-4614

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