Happy Wednesday everyone
The wheels of the economy are slowly starting to turn again as consumers take opportunities to purchase a few more goods and services in Alert Level 3. If you’ve supported a fellow NZ business this past week – good on you and let’s keep looking after our local communities.
Now, we are going to be a little provocative this week, deliberately, and out of concern. There is an old saying “Data talks, BS walks….” and we’ve got some real-life examples below of data talking to help kiwi business owners enjoy the fastest of Alert Level 3 restarts. To whet your appetite, this chart below demonstrates how a real kiwi business last week experienced its best week of business operations in the last 10 years – all by taking advantage of data-driven insights and sleepy competitors. How does your first week in Alert Level 3 compare?
Sadly, we also have some real life examples of “BS walks,” with some local business owners costing themselves substantial amounts of profitable cash flow because of decisions based on assumption or gut instinct, rather than verified data analysis and market insight. In fact, many business owners have been experiencing these ‘invisible losses’ for the past few years. We refer to these missed opportunities as ‘invisible’ as they are not seen or felt due to a lack of awareness. A classic example of this are the butchers who, for years, have relied solely on their physical location for trade, not realising the growth opportunities occurring online over the past few years. Sadly, these operators were hit hard in Alert Level 4 and will continue to feel it in the future if they don’t look at the data and move with changing consumer demands.
So, with this in mind, we’ve identified for you two things you can do to protect and grow your business in Alert Level 3 and beyond.
The Two Best Things You Can Do At Alert Level Three
First up is insurance. Many, frightened by stalled incomes and relentless bills are, understandably, looking for ways to reduce monthly outgoings. While this can be a worthwhile exercise in finding efficiencies, one thing we strongly advise you against quitting is your insurance.
Sadly, some insurance firms, equally spooked by the COVID-19 pandemic, have changed their payment policies over the past few weeks and no longer offer monthly payment instalments, instead requesting annual premiums be paid upfront in a lump sum. While these companies are clearly looking to protect their own cash flow, it does seem slightly short-sighted and a tad disingenuous of them, in my opinion at least. Fortunately, our preferred insurer, GROW NZ partner, Rothbury Insurance, isn’t turning the tables on us and continues to offer fortnightly, monthly, or annual premium options to best suit your needs. If you’re looking for a new insurer, I highly recommend checking them out.
The other most important investment you can make in Alert Level 3, is data-driven marketing. As tempting as it might be to slash those marketing costs, doing so will only create a bigger hole for you to climb out of in future. Take McDonald’s for example. During the 1990-1991 recession, McDonald’s pulled back on advertising to save costs. Rivals, Pizza Hut and Taco Bell, didn’t. The outcome? Pizza Hut sales soared by 61%, Taco Bell’s by 40% and McDonalds? Well, they saw a sales decline of 28%.
So, advertise team, BUT, don’t just advertise to tick a box – that’s just asking for a cash flow spiral. What we all need right now is data-driven marketing that identifies who and where your customers are and exactly what they want at this very moment. It’s hard to get this kind of marketing wrong, to be honest, but so many businesses are yet to experience the seismic growth it can uncover.
We’ve referenced digital marketing a few times before but I’m going in deep this week because it can really be a game-changer for kiwi SMEs like us – especially if you take advantage of Grow Digi’s free offer below!
Now is not the time to be modest.
How to market yourself in a recession.
This week’s GROWisdom is a saying you’ve probably heard before: “When times are good you should advertise. When times are bad you must advertise.” Like all clichés, it’s over-used for a good reason. It is well-documented that brands that increase advertising during a recession can improve market share and return on investment much more efficiently when things pick up again. Here’s why:
- Many of your competitors will cut marketing spend in a panicked attempt to reduce outgoings. This allows you to ‘own’ your category and gain market share.
- Brands that continue to spend on advertising give the impression of stability. In the eye of the consumer, if you’ve got money to advertise you’re clearly doing ok. This boosts your credibility and reliability.
- More often than not, the cost of advertising drops in times of hardship – meaning you’ll get an even better return on that marketing investment and generate profitable cash flow.
- When a brand cuts back on advertising its ‘share of mind’ is cut too and, with it, possible future sales.
On the other hand, increasing your share of voice through boosted advertising will likely improve your share of the market.
But.. HOW you advertise matters.
You must use data to inform your marketing decisions; you have to go where people will see you and you must be relentlessly focussed on delivering profitable cash flow.
Check out these real-life examples from our sister company, Grow Digi.
Lesson 1. Use data – not your gut.
I was talking to a business owner last week, a seasoned and very successful business owner. Her turnover in March was more than $200,000, but during lockdown it dropped to just $750! Her business operates in the discretionary spend segment for quality sporting goods, which are distributed physically and not classed as “essential”, so the lockdown understandably really hurt.
Now, this business owner had decided to stay shut during Alert Level 3, as her ‘gut feel’ told her no one would want to buy her products in the current climate. So, we did a little research for her and found that in the last week alone there had been over 3,000 searches for her products! Furthermore, her cost of acquisition had dropped by 30%, as her competitors had pulled back on marketing. Boom! Her revenue is now back to pre-lockdown levels. And all it took was some data analytics – “Data talks and BS walks!”
Lesson 2. Ask the Internet’s opinion, not your friend’s.
Another business owner recently told me how great his website was. He’d built it himself and felt proud of how well he believed it demonstrated the value of his products and services. We took a look and found that, while the website looked good, it didn’t comply with Google’s search requirements, had 47 technical issues, with an SEO score of 47 out of 100. When we tested the search for his business, it came up on page 9, or in other words, Internet no-mans-land. Ask the data. It doesn’t lie.
Lesson 3. Stop making assumptions.
How many of you would anticipate a business selling awnings would be booming during a pandemic? I wouldn’t, but guess what, it is, for one kiwi business owner at least – because this business used data to target customers, rather than assumption. Potential customers were at home during lockdown with time on their hands and many were building home improvement lists. The result? Strong sales and the best marketing return on investment this client has ever experienced.
Another client example is pictured on the right. Using a data-driven ‘fast start’ methodology (the growth of which is visualised in the graph), this client of ours took data-driven marketing actions and enjoyed a stellar first week in Alert Level 3. While many business owners were lamenting poor sales, this business owner sent me a text on Friday night complaining about how tired her team was! A tired team, but all still employed – much better than the alternative!
While there are some segments where marketing is very challenging at the moment, these are in the minority and, for most, the returns are actually better now than pre-lockdown.
And it’s not just consumer brands that benefit from marketing during tough times. The same study that saw McDonald’s sales plummet, also showed that the brands that increased B2B advertising grew significantly during the recession and beyond for the following three years.
Wait, there’s one more catch….
Not all marketing agencies are created equal. Sadly, marketers are not regulated like plumbers, electricians, accountants and real estate agents. Anyone can call themselves a ‘marketer’ these days, and many do. But, just like the importance of making data-driven decisions, you need insight into who you’re working with. Some marketing agencies are equipped with fantastic creatives, but lack the business acumen to convert sales. Most do not invest in the tech to get the best data and customer insights from around the globe, and many are incentivised by certain Internet giants to promote particular online channels, which are not necessarily the best ones for your business – and they often won’t tell you this. But here’s a secret from me… There’s more to digital advertising than Google.
In fact, if you look at the chart below, you’ll see the increased returns and growth you can achieve if you have an expert sharing alternative options with you.
Choose Grow Digi and take advantage of our FREE OFFER.
Unlike a lot of marketing agencies, our team at Grow Digital Marketing understands customers, cash flow and profit drivers, as well as sales and marketing.
We are a team of businesspeople who understand customer journeys and can leverage marketing expertise along with incredible technology to deliver profitable cash flow and avoid the ‘invisible loss.’
And, just as importantly, we say ‘no’ to potential clients they can’t make money for, so if your business is in one of those challenging segments right now – rest assured Grow Digi will politely advise you of this and not take your money.
Here’s what some of Grow Digi’s clients have said recently.
“When my accountant rang me and said “I don’t know what you are doing but your profit has gone through the roof” I knew I had picked the right marketing agency. “- Wendy Hart, Flowers After Hours
“The end result was engaging, unique and cost-effective content that we were excited to share with our social communities” – Kristin Mooney, Goodman Fielder Meadow Fresh
For the duration of Alert Level 3, we are offering Grow NZ members a free marketing consultation. Even if you are currently doing marketing, the Grow Digital Team will run our technology over your campaigns to see if you really are getting the best returns. So, what are you waiting for?