I’m starting to get tired of people whining about the economy — don’t get me wrong — I’m super empathetic with people whose lives have been devastated by what’s going on. In fact, in 2001 I also experienced a layoff during the dot-bomb era. In fact, I was laid off on my birthday, one month before my second son was born, and two months before I was to graduate college. With tuition payments, rent, three mouths to feed and bills to pay, I felt very vulnerable. But the lesson I learned was to take ownership of my destiny and not complain about what had happened. As I did that, the world opened itself up to me and I realized the huge opportunities that were ahead.
Now, during this a great time of opportunity, I want to share tips for small business owners who want to put the complaining aside and take control of their future.
I’ll share a live example so it brings reality to what I’m suggesting. I received an email the other day from an ad vendor that started with “Even in this economy you can find buyers…” I was immediately turned off and deleted the email. But, it caused me to pause and realize that I have been taking advantage of the economy to find buyers (leads) at a huge discount for months.
You see, now is the best time to purchase ads. Your competition is cutting their marketing ad spend. The publishers (especially print media) are hurting and will give killer deals to whoever wishes to advertise. That puts you in a perfect situation to negotiate the deals you need to get ahead with your business. I’ll go out on a limb here and share a few tips about buying ads during a recession. (Hopefully the publishers I work with don’t read this;) )
How to Advertise for Less During the Recession:
- “Cheap” doesn’t equate to “good deal”. Don’t fall into the trap of thinking that since you’re getting a “discount” compared to the cost of ads in the past, that you’ll get more return for your money. Things like banner ads don’t perform very well and they don’t perform any better if they’re cheaper.
- Always test first. You may feel tempted to go for the big ad spends since you can get it for a lot less money than it would have cost you two year ago. Don’t do it. Always require that the publisher allow you to do a small test first. If they’re not willing, pass on the deal. You can’t afford to spend big money without absolutely knowing for sure that you’ll get the return you need. Even if you can afford to waste that money, don’t do it just because you can. Test first. Testing allows you to negotiate better deals. If conversion on the test was less than optimal, but still makes sense, you can go back and request a further discount based on the facts. Its pretty easy to go back to the publisher and say “Our normal conversion rate is 2%. Since our test with you converted at 1.5% it doesn’t make sense to buy more ads with you unless you can reduce the cost by 25%. Under that situation, I can get the return I need to make this ad spend profitable.” Nearly 9 times out of 10, the publisher will honor the discount because they realize you’ve done your homework.
- Always negotiate. The previous point already hit on this topic, but its extremely important to realize that although a publisher has a media kit, published ad costs, a big following, or a huge brand name, there is always room to negotiate when the economy is in the toilet. Don’t ever buy ad space without having negotiated the rate. If you can’t get them to come down from the listed rate, you should seriously question whether or not you should pursue advertising with that publisher.
- Know your CPC, CPL, & CPA like the back of your hand. The closer you are to the number, the faster you can make good decisions about your ad spends. You need to fully understand what your conversion funnel looks like and what your ads cost you on a cost-per-click, cost-per-lead, and a cost-per-acquisition (new customer) basis. If you don’t know those numbers well, your power to negotiate and judge good deals is greatly diminished. If you run the numbers and you realize for the first time that your ad spends are costing you way too much, work on figuring out how to reduce cost. This is where innovation and creativity really comes in. Even though we’re able to get our CPL down to 5-15% of the industry average, I’m always working to lower that cost. Amazingly, creative ways to improve always show themselves after I’ve racked my brain over the numbers.
- Don’t get emotional. Its easy to get really excited about the “possibilities” of a certain ad campaign. In previous discussions I’ve called this the “if we only” syndrome. As soon you start speculating, “If we only get .1% of the subscribers to click, and then we only get 3% of those to buy, then we’ll be rich!” then you’re in big trouble. You should never speculate. Test first. Speculation is a sign of letting your emotions guide the decision instead of facts. When your emotions are in charge, you’re likely to make costly mistakes.
- Stay focused. Its easy to be tempted to stray ever so slightly outside of your target market when the ad space is cheap and the publisher is throwing in more exposure at a serious discount. Remember, your highest conversion, your happiest customers, your best referrals, all will come from your specific target market. Don’t fall into the trap of reaching outside that target market just because you can do it at a discount. Servicing customers that don’t fit exactly into your target can end up killing your business. Stay focused on what you know works. Your conversions will go up, your customers will be happier, you’ll get more referrals, and most importantly, you’ll be able to scale and grow your business in a way that is fun and liberating for YOU!
Armed with these tips, you should feel confident that now is a great time to be investing in the growth of your business through effective advertising. Don’t hesitate to spend (invest) in advertising/marketing once you know the return is there. When you look at your marketing budget, realize that the budget should be unlimited as long as you have a positive return on the investment. In a time when everyone is cutting back their marketing spend, that piece of insight is invaluable as you go out and eat up market share like its candy.
I want to hear about hidden “opportunities” you’re taking advantage of. I’d love to hear how others are taking control of their destiny and thriving in this land of opportunity. Trust me, there’s a little opportunity in everything — consider applying these tactics with your vendors, suppliers, contractors and even partners. Just do it with care and respect. Today, no one is going to let business slip away without working for it. 😉
[Image credit: Kit F on Flickr]