Results Driven Marketing in a Down Economy
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How to make the most of your marketing efforts during a recession. Presentation made to the VT/NH Postal Customer Council in Colchester, VT.
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Results Driven Marketing in a Down Economy
- 1. Overview for National PCC Day Presenters will begin at 10:00 AM Eastern Doug King Mailing Services HQ USPS
- 2. Results Driven Marketing in a Down Economy… Name Title Event U.S. Postal Service
- 9. Results Driven Marketing in a Down Economy… Name Title Event U.S. Postal Service
- 10. Challenges Video
- 14. “ Marketers from various industries are feeling the pinch of belt-tightening with their budgets.” Source: Economic Conditions Forcing Marketers To Reduce Advertising Budgets, ANA Survey, 2008
- 16. “ In fact, SPENDING MORE during tough times when competitors may be scaling back is a good way to STRATEGICALLY BOOST MARKET SHARE … Source: Bob Liodice, President and CEO of the ANA
- 17. A Look Back in History
- 19. Depression Spending in Action Chart: P&G: New and Improved How A.G. Lafley is Revolutionizing A Bastion Of Corporate Conservatism, Business Week 2003
- 20. Depression Spending in Action
- 21. Depression Spending in Action
- 22. Depression Spending in Action
- 23. Survival Guidelines for Businesses
- 26. Stay Close to Your Customer
- 28. Think Like a Marketer
- 31. Stress Benefits and ROI Source: Facts On The Value Of Marketing During An Economic Downturn/Recession What’s In It For Me
- 33. Re-examine the Marketing Mix Source: Facts On The Value Of Marketing During An Economic Downturn/Recession
- 35. Direct Mail The Marketing Workhorse
- 38. Direct Mail The Marketing Workhorse
- 41. The Reason
- 42. Components
- 43. Components
- 44. Components
- 45. Case Studies
- 47. David Rawle Chairman, Rawle Murphy Advertising, Marketing, and Public Relations Agency
- 51. John Klemets Marketing Manager, Dell Consumer Division
- 53. Jeff Meyer Sr. VP, Marketing & Sales - Feld Entertainment
- 56. Results Video
Editor's Notes
- Use this slide to introduce yourself and the topic at hand. If you would like, also provide a bit of background about yourself including your title and work at USPS. PRESENTER’S NOTES: If using the video clip inserts on slide #2 “Challenges” and slide #48 “Results,” use the following speaker’s notes: During the course of today’s presentation we are going to highlight four companies who are facing challenging times but used direct mail to achieve phenomenal results. The companies and their challenges are: Wild Dunes Resort: needed to increase reservations and announce a new luxury resort AT&T: cut mass media advertising but still needs to be on the consumers mind Dell: gain market share in the current economy Feld Entertainment: represents iconic brands and can’t cut back on branding Let’s hear more from each of them. NEXT SLIDE PRESENTER’S NOTES: If you are NOT using the video clips on slides #2 & #48 then use the following speaker’s notes and delete slides #2 and #48 prior to launching the presentation. Let me begin today’s presentation by talking about four companies that have been impacted by these challenging economic times. Wild Dunes Resort, located in South Carolina found themselves behind pace on opening a brand new luxury product. They had been impacted by shortened booking windows, issues with hurricanes in the southeast region, as well as the economic downturn. They knew they had one opportunity to capitalize on an offer to increase room reservations and announce a new luxury resort. AT&T typically uses a portfolio marketing approach but needed to cut mass media advertising yet continue to be on the consumer’s mind. Dell wanted to gain market share in the current economy. Feld Entertainment represents iconic brands but they can’t cut back on branding. We’ll conclude the presentation by sharing some pretty phenomenal results from each of these companies. NEXT SLIDE
- Use this slide to introduce yourself and the topic at hand. If you would like, also provide a bit of background about yourself including your title and work at USPS. PRESENTER’S NOTES: If using the video clip inserts on slide #2 “Challenges” and slide #48 “Results,” use the following speaker’s notes: During the course of today’s presentation we are going to highlight four companies who are facing challenging times but used direct mail to achieve phenomenal results. The companies and their challenges are: Wild Dunes Resort: needed to increase reservations and announce a new luxury resort AT&T: cut mass media advertising but still needs to be on the consumers mind Dell: gain market share in the current economy Feld Entertainment: represents iconic brands and can’t cut back on branding Let’s hear more from each of them. NEXT SLIDE PRESENTER’S NOTES: If you are NOT using the video clips on slides #2 & #48 then use the following speaker’s notes and delete slides #2 and #48 prior to launching the presentation. Let me begin today’s presentation by talking about four companies that have been impacted by these challenging economic times. Wild Dunes Resort, located in South Carolina found themselves behind pace on opening a brand new luxury product. They had been impacted by shortened booking windows, issues with hurricanes in the southeast region, as well as the economic downturn. They knew they had one opportunity to capitalize on an offer to increase room reservations and announce a new luxury resort. AT&T typically uses a portfolio marketing approach but needed to cut mass media advertising yet continue to be on the consumer’s mind. Dell wanted to gain market share in the current economy. Feld Entertainment represents iconic brands but they can’t cut back on branding. We’ll conclude the presentation by sharing some pretty phenomenal results from each of these companies. NEXT SLIDE
- Use this slide to introduce yourself and the topic at hand. If you would like, also provide a bit of background about yourself including your title and work at USPS. PRESENTER’S NOTES: If using the video clip inserts on slide #2 “Challenges” and slide #48 “Results,” use the following speaker’s notes: During the course of today’s presentation we are going to highlight four companies who are facing challenging times but used direct mail to achieve phenomenal results. The companies and their challenges are: Wild Dunes Resort: needed to increase reservations and announce a new luxury resort AT&T: cut mass media advertising but still needs to be on the consumers mind Dell: gain market share in the current economy Feld Entertainment: represents iconic brands and can’t cut back on branding Let’s hear more from each of them. NEXT SLIDE PRESENTER’S NOTES: If you are NOT using the video clips on slides #2 & #48 then use the following speaker’s notes and delete slides #2 and #48 prior to launching the presentation. Let me begin today’s presentation by talking about four companies that have been impacted by these challenging economic times. Wild Dunes Resort, located in South Carolina found themselves behind pace on opening a brand new luxury product. They had been impacted by shortened booking windows, issues with hurricanes in the southeast region, as well as the economic downturn. They knew they had one opportunity to capitalize on an offer to increase room reservations and announce a new luxury resort. AT&T typically uses a portfolio marketing approach but needed to cut mass media advertising yet continue to be on the consumer’s mind. Dell wanted to gain market share in the current economy. Feld Entertainment represents iconic brands but they can’t cut back on branding. We’ll conclude the presentation by sharing some pretty phenomenal results from each of these companies. NEXT SLIDE
- Begin the presentation by clicking on the center of the slide to launch the video clip. Otherwise click through to slide #3. NEXT SLIDE
- So, as I discuss marketing in today’s economic environment, keep the challenges of our four companies in mind. We’ll hear more from them at the conclusion of my presentation. 1 st bullet- Everyone is very familiar with our economic landscape but let me provide the background for today’s topic anyway. 2 nd bullet- We’re also going to cover how history does repeat itself and how we can rely on some successful practices developed years ago to overcome the crisis at hand. 3 rd bullet- We simply took those “Best Practices” and made them into guidelines that current and future marketers should know when faced with a stressed economy. 4 th bullet- At the same time, we want to explain what is meant by Direct Mail being the “Workhorse” of any integrated campaign. 5 th bullet- While sometimes it all seems to be bleak, we at the USPS are going to provide a light at the end of the dark tunnel. NEXT SLIDE
- GDP growth turns negative : In the fourth quarter of 2008, GDP declined at an annual rate of 6.3 percent, the largest decline since the first quarter of 1982. The drop in growth reflected a 4.3% decline in consumer spending, a 22.8% fall in spending on homes, a 21.7% decrease in business investment spending, and a 23.6% drop in exports. Job losses accelerate : The U.S. economy shed 663,000 jobs in March 2009. Since the recession began in December 2007, the economy has lost 5.1 million jobs, 2.7 million of them or 53.4 of the total in just the last four months. The housing market stalls : New home sales in January 2009 amounted to an annualized, seasonally adjusted rate of 337,000, 41.1% lower than a year earlier, despite a year-over-year drop in median new home prices of 18.1%. At the current rate of new home sales, it will still take 12.2 months to sell all new houses on the market. Existing home sales were 4.6% lower and their median sales price 15.5% less than a year earlier. Families feel the pressure: Credit card defaults rose to 6.3% of all credit card debt by the fourth quarter of 2008, an increase of 52.4% from the fourth quarter of 2007. Wages still up due to low inflation : In February 2009, inflation adjusted weekly earnings were 2.5% higher and hourly earnings were 4.1% higher than a year earlier, largely because of low inflation in recent months. NEXT SLIDE
- Consumer Attitudes Economic downturns instill anxiety Energy and food prices are on the rise Frugality is standard operating procedure Pragmatism and escapism are not mutually exclusive Bottom line - consumers are saving more, spending less Source: Tuning Into The Recession Mind-Set, Forbes, February 2008 NEXT SLIDE
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- What Your Customers Are Facing: Marketing and advertising industry statistics Marketers from a broad cross-section of categories and industries are feeling the pinch of belt-tightening with their budgets Reducing advertising campaign media budgets (69 percent) Reducing advertising campaign production budgets (63 percent) Challenging agencies to reduce internal expenses and/or identify cost reductions (63 percent) Departmental travel and expense restrictions (63 percent) Eliminating or delaying new projects (61 percent) - Source: Economic Conditions Forcing Marketers To Reduce Advertising Budgets, ANA Survey, 2008 NEXT SLIDE
- “ In fact, spending more during tough times when competitors may be scaling back is a good way to strategically boost market share, because this often helps brands come out ahead when the economy rebounds. Before rushing to slash marketing spending, it is important to carefully evaluate how effective short term budget management can lead to significant long term benefits.” Source: Bob Liodice, President and CEO of the ANA NEXT SLIDE
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- The Great Depression It was a time when several companies benefited from aggressive marketing while their rivals cut back. Consumers didn't stop spending during the Depression; most just looked for better deals, and the companies providing those better deals came out stronger after the Depression ended. When spending picked up, consumer loyalty to those companies remained. Generally speaking, those companies that not only survived but also thrived during the Great Depression were those that continued to act as though there was nothing wrong and that the public had money to spend. In other words, they advertised. NEXT SLIDE
- Procter & Gamble. To this day, P&G maintains a philosophy of not reducing advertising budgets during times of recession, and the company certainly did not make any such reduction during the Depression. While competitors cut ad budgets, P&G increased its spending. Radio took P&G's message into more homes than ever, and P&G became a pioneer in effective use of that medium, including its role in creating the notion of soap operas. NEXT SLIDE
- During the 1920s, Fords were outselling Chevrolets by 10 to 1. In spite of the Depression, Chevrolet continued to expand its advertising budget and, by 1931, Chevrolet took the lead in its field. NEXT SLIDE
- In 1920, Camel was the top-selling tobacco product. American Tobacco Co. then struck back with the Lucky Strike brand, and by 1929 Lucky had overtaken Camel as the No. 1 brand. Two years later, in the heart of the Depression, Chesterfield also overtook Camel. Camel countered with a dramatic increase in ad spend and, by doing so, demonstrated the power of advertising during depressed times. By 1935, it was back on top. Advertising in its most competitive state. NEXT SLIDE
- In 1933 Kraft introduced Miracle Whip – again. It was first introduced at the 1933 Century of Progress Chicago World's Fair, and became one of the largest food advertising campaigns to ever grace the U.S. media. The initial effort led to 22 weeks of almost non-stop advertising, including a weekly two hour radio show. At the end of this 22-week period, Miracle Whip was outselling all other brands of dressing and mayonnaise. In many cases, companies will take advantage of the lower costs to advertise because of the lack of advertising overall. NEXT SLIDE
- This is going to be a simplistic approach that many companies consider to be the bible during an economic crisis. NEXT SLIDE
- Obviously, the first step in combating the recession is to examine your costs. Think about this as streamlining your business. Ask yourself if your daily work is flowing through your company as well as it should. Where can you restructure to make the workflow more effective? Are there any processes that can be automated to help you diminish costs? NEXT SLIDE
- The second strategy for beating the recession is to make strategic cuts. Although nobody likes to do more with less, in this economy, cutting costs is a must. That said, you want to ensure that any cuts that are made are truly strategic – to qualify, they must reduce unnecessary overhead and help your firm function more efficiently. NEXT SLIDE
- Staying close to your customers is essential. If you aren’t listening to your customers, you won’t be able to meet their needs – and if you’re not meeting their needs, you will lose them. Take the time to re-connect with your current customers – ask them to provide you feedback on your services, so that you can see what you’re doing well and where there is room for improvement. In this tough economic climate, customer service must be your top priority. NEXT SLIDE
- Identifying new opportunities is also crucial. Just because there’s a recession doesn’t mean that you can’t attract new customers – and in fact, now is a great time to look for new prospects and cultivate relationships with them. In many cases, companies have taken the opportunity to introduce new product lines that are less costly to produce and can offer them to their customers at a savings rather than discounting their higher-end products. Just “food for thought”… NEXT SLIDE
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- You should be monitoring your competitors at all times! In this weak economy, there are great advantages to being in front of customers. NEXT SLIDE
- You should center your message on the benefits and advantages of your product or service – such as convenience or energy efficiency – rather than making emotional appeals. If you make an emotional appeal make sure it’s on behalf of your company wanting to give something to your loyal customers during these financially stressful times. It’s time to be authentic about how you feel about your most loyal customers. When that’s shared you create the “buzz” which comes from “word of mouth” advertising by your customers. NEXT SLIDE
- In direct mail and telemarketing campaigns, use hard-hitting copy with simple but convincing language, a special offer the customer will find hard to pass up, and a strong call to action. Customers are looking for as much value as possible in a weak economy. NEXT SLIDE
- Know which target segments are most responsive, once you know who they are you can purchase lists that will expand on those types of customers. Have metrics in place to find out which offers generate the greatest interest, and so on. Then, adjust accordingly. Spend every ad dollar carefully. NEXT SLIDE
- Don’t forget that your customers are everywhere and you don’t want to miss any of them in your communications. Integrate your campaigns, don’t risk missing an important segment of your audience. It could mean an additional 10-85% generation of sales revenue. In many cases, online as the only channel misses very big revenue opportunities. Drive your customers online with a Direct Mail piece. NEXT SLIDE
- These are two examples from Blue Cross-Blue Shield where they made it very clear what their offer is, how long it’s available, and where to go to get it. It’s best to provide many access points (BRM, on-line surveys, phone surveys) for your offer so you don’t inconvenience anyone who can take advantage of it. NEXT SLIDE
- We’re discovering through development and research of case studies, white papers, and articles that Direct Mail is having an impact on the contribution to businesses’ bottom line. It’s one of the many reasons we call it the “Workhorse of Marketing.” NEXT SLIDE
- The first core attribute of Direct Mail – it’s personal. With Direct Mail, you can address your customers by name, speak to them individually, and appeal to their interests. And when customers feel that you understand their needs, they’re more likely to respond. In fact, research shows that 55 percent of consumers “look forward” to discovering the mail they receive. How many people could say that about their e-mail marketing or television ads? The second core attribute of Direct Mail - it’s targeted. Unlike mass communications like radio and TV, which waste your dollars reaching out to an unspecialized audience, Direct Mail can be customized to focus on a small group of individuals. By focusing on the “ideal customer,” Direct Mail helps to provide marketers with more bang for their buck. NEXT SLIDE
- It’s flexible. From letters to postcards to brochures, there is a large variety of inexpensive and easy formats you can use to create your direct mail campaign. You can add impact by including a special offer or free sample in the envelope. It’s tangible. Direct Mail allows you to physically place your message in your customers’ hands and encourage interaction. Along with an engaging message, you can make an unforgettable impression by incorporating elements that actively involve the customer, like stickers, and coupons. A remarkable 81% of households either read or scan their advertising mail. NEXT SLIDE
- Dimensional Direct Mail is never passed up. Let’s face it, we all want to know what’s in a box or expanded envelope. NEXT SLIDE
- Direct Mail is also measurable. Direct Mail is one of the few media channels that gives you the ability to track the success of your campaigns. Whether using a single media channel or many, mail can help make the overall initiative stronger, more targeted, and more measurable. What’s more, by adding mail – with its unique benefits – to the media mix, you will enhance the strengths of the other media. Measurement is as simple as counting the inquiries you received or counting the number of coupons redeemed. By tracking and analyzing your results, you will see what's working and can make adjustments to future mailings if needed. NEXT SLIDE
- At this time, I’d like to share a campaign the USPS launched in May of this year. So far, we’re getting tremendous feedback and there have been over 13,000 business responders requesting fulfillment of a DVD containing several successful case studies from very recognizable companies. NEXT SLIDE
- This was our campaign philosophy and our segmented audience… Campaign philosophy: Companies – both large and small – need to know how Direct Mail can help them increase profits in a recession. The USPS is using this advertising campaign to reach out to Direct Mail users from a number of different industries, including: advertising, marketing and printing, among others. The USPS is also using this campaign to educate the marketers of tomorrow – undergraduate and graduate students currently studying business and marketing. NEXT SLIDE
- This is the dossier-looking outbound mailer which gives the look and feel of important information inside, like you would find for scientific research. NEXT SLIDE
- This is the interior of the piece. It contained concise copy with an offer, how to respond to the offer, and what to expect… This Direct Mail invitation included personalized URLs for participants to respond online, as well as including a BRM for an alternate response mechanism. We also asked a few survey questions to get to know our customers better. NEXT SLIDE
- The Fulfillment piece included: Hands-on toolkit about Direct Mail Campaign DVD: Case studies from leading companies, a few of which we are about to discuss. We also included a survey so we can learn more about our audience, and if they thought the materials we sent them were relevant and helpful. Of course, you always need to thank your customers so we included a “Thank you” from the USPS for responding and considering Direct Mail as a part of their media mix. NEXT SLIDE
- Now let’s take a look at several companies featured in the DVD fulfillment piece, and how they’re communicating with their customers during this economic downturn. NEXT SLIDE
- It’s not news that the economy is in a slump and the pressure to keep your business growing through these recessionary times has never been greater. Deliver Magazine collaborated with top-notch brands such as Wild Dunes Resort, AT&T, Dell and Feld Entertainment to discuss their marketing strategies and challenges during these tough economic times. The challenges each faced are unique: Wild Dunes was faced with generating reservations, announcing the opening of 135 luxury guest rooms and suites and offering a discount all at the same time. AT&T had to cut spending during these tough times and decided mass advertising was the one to go because it was difficult to measure the RIO on it. While still trying to be the world’s largest computer manufacturer, Dell was faced with declining sales and was still striving for an opportunity to gain market shares. In light of the economic downturn, Feld Entertainment still had to advertise and promote their iconic brands such as Disney on Ice, Ringling Brothers Barnum & Bailey, Monster Jam and more. The common thread was the use of Direct Mail to maintain brand value, stay close to customers, and provide discounts and special offers. As these marketers are showing us, no one can afford to drop customer engagement. NEXT SLIDE
- Wild Dunes Charleston’s Island Resort NEXT SLIDE
- Wild Dunes Introduction to the Wild Dunes campaign: Wild Dunes encountered the challenge of launching a luxury product in the midst of an economic recession Wild Dunes had to combine their luxury product with an incentive offer How Direct Mail helped Wild Dunes maximize other marketing channels Reached out on a personal level to customers NEXT SLIDE
- This is John Nordberg, AVP of Creative Services, B to B Marketing for AT&T with a sample of their mailpiece. NEXT SLIDE
- The AT& T Challenge: Increase cross-selling among customers despite high turnover Solution: Their Integrated plan leads with Direct Mail kits NEXT SLIDE
- John Klemets, Marketing Manager, Dell Consumer Division NEXT SLIDE
- Dell Computers Challenge: Grow market share in a poor economy Solution : Introduction to Dell’s “blended approach” Catalogs and Direct Mail are essential to Dell’s marketing Dell stresses the tangible and targetable nature of mailing “ The biggest strength of Direct Mail is it has a unique ability to speak particularly to customers and to provide a storefront catalog opportunity of being able to describe all the products and services Dell has to offer.” – John Klemets, CRM Manager, Dell NEXT SLIDE
- Jeff Meyer is the Sr VP, Marketing & Sales for Feld Entertainment NEXT SLIDE
- FELD with its huge traveling shows needed to know in advance whether or not a show would meet with ROI success and Direct Mail helped sell tickets in advance. NEXT SLIDE
- The results from the Direct Mail campaigns implemented by Wild Dunes Resort, AT&T Dell and Feld Entertainment yielded positive results. Wild Dunes showed a three thousand percent ROI from their mailing campaign. Length of stay increased by ten percent over prior years, online revenues increased by forty percent and call-in revenues increased by twenty percent. AT&T will be m ailing more next year based on the positive ROI generated from their mailing campaign this year during the recession. Dell’s mailed invitation to an early access sale’s event, generated a two hundred percent ROI. Feld Entertainment used the positive ROI as an indicator for markets around the country. Customers need to hear from companies that their products and services remain as vital and affordable to them as before and that their brand is as strong and reliable as ever. NEXT SLIDE
- Launch the results video clip by clicking on the center of the slide, otherwise delete this slide and click through to the summary slide. NEXT SLIDE
- Think like a Marketer! As a business, you have the opportunity to reach your customers about the benefits of your products and services. Direct Mail is an economical and smart way to market during a recession. Direct Mail allows you to make a one-to-one connection with your customers. Direct Mail has a longer life span plus, a “Pass Along” value that creates referrals to your business. NEXT SLIDE
- Resources: Where do you turn to get started? Right here, your PCC provides education, resources, and especially networking opportunities like this event. Let’s not forget that the USPS Sales Force and BSN representatives are ready and available to help you! Your local Postmaster can help you identify the correct people to work with your company to make direct mail an efficient and effective form of communication. Brains on Fire, Brand Channel and Duct Tape Marketing are a few, of many, marketing websites you can review to jump start some ideas for your company. If you’d like to learn more on this subject, subscribe the Postal Service’s Deliver magazine, or visit delivermagazine.com, where you will find the latest information about marketing. We have all sorts of resources for you to choose from on the site, from regular articles to video case studies and tutorials. Come by for a visit! NEXT SLIDE