Preparing for Economic Recovery: 2010-2011

Excerpts from GlobalSpec

Executive Summary

It’s true that during difficult economic times, many companies are unable to in­crease their marketing investments or are forced to cut marketing spending. These tough decisions put those companies in a difficult position because they may lose market share or have greater ground to make up as the economy improves.

The important question during a downturn isn’t whether or not the economy will recover—it will; it always does. The important question is whether your company will be in position to surge when the economy begins to grow again. To a large degree, the level of your success will depend on your marketing efforts and capabilities: what you have done during the downturn and what you put in place now to win business during the recovery. You will need to make strategic decisions about choosing new media, entering new markets, and positioning products.

Success will also depend on the timing of your efforts. Now is the time to establish marketing plans for the recovery—formulate strategies, design campaigns, make media choices, justify expenditures—so you are ready to go with an approved marketing plan when your company’s budgets open up and you have marketing funds to invest.

But you must remember that as you plan for the future you will not be able to return to the old ways of marketing. Your customers and prospects now go online first to locate products, services and suppliers. And the demand for marketing accountability and measurement is stronger than ever. Both these trends were well documented before the economic downturn hit, and they will continue to be more important than ever as the economy recovers.

That means marketers must choose an appropriate mix of targeted online pro­grams that complement their traditional marketing efforts, offer measurability and ROI, and provide evidence to support marketing decisions. Only in this fashion will industrial companies be able to emerge from the downturn in a strong position to win business.

Recover from Marketing Cutbacks

If you were forced to reduce your marketing exposure during the downturn, it’s essential that you regain momentum early and quickly as recovery begins. Your visible presence in the market through sustained and frequent marketing will give your company a jump start before the market becomes overcrowded with mes­saging from competitors. Then, as demand begins to increase, you will have an advantage because potential customers will have been continually exposed to your messaging and have an affinity to work with you.

If you did cut back, you likely need to do more now to catch up. You will need to remind customers and prospects that you are here, a strong and viable company ready to serve their needs. Even if you did maintain marketing during the downturn, you must continue or increase your marketing efforts because the competition for customers is only going to increase as the economy recovers and companies hungry for new business compete aggressively.

Plan Now to Ensure Success

A typical marketing cycle looks something like this: establish marketing strategy, identify marketing objectives, define target audience, research media options, con­ceive campaigns, calculate costs, craft messaging, gain executive endorsement and marketing funds, execute campaigns, measure effectiveness, refine tactics.

As every marketer knows, that’s a lot of work. If you save it all until budgets open up and your company is ready to invest more in marketing, you’ll end up scram­bling to put together marketing plans and seeking budget approval. By the time you actually get out there in the market, you’ll be well behind competitors who got an early start.

That’s why it’s imperative to get as much of the planning work done now. Here are two guidelines to help accelerate your planning process:

Decide which markets to attack first. Some industries will recover faster than oth­ers. According to the August 2009 Manufacturing Institute for Supply Management (ISM) Report on Business, 11 of 18 manufacturing sectors reported growth when comparing August to July. Those sectors include: Textile Mills; Apparel, Leather & Allied Products; Paper Products; Miscellaneous Manufacturing; Printing & Related Support Activities; Computer & Electronic Products; Transportation Equipment; Nonmetallic Mineral Products; Electrical Equipment, Appliances & Components; Fabricated Metal Products; and Chemical Products.1

In addition, some sectors have been less impacted by the economic downturn than others. Biotechnology/pharmaceuticals, utilities/energy, aerospace/defense, and packaging machinery have fared better than most industries.2

1 “August 2009 Manufacturing ISM Report on Business.

2 “GlobalSpec 2009 Economic Outlook Survey: How Industrial Companies can Succeed in the Current Economy.”

These sectors might be good first targets, if your company’s products and ser­vices are a good fit. You may need to re-purpose some of your marketing materials to focus on the needs of these industries or seek out marketing options that target these specific sectors. Get started on that work now.

Keep in mind that not only will certain sectors recover faster, but certain geographic markets will recover faster as well. Today’s industrial economy is a global economy, and you should seek out opportunities where they exist. Don’t limit yourself region­ally unless the nature of your business dictates that you do. The Internet makes it easy to find and be found by target customers anywhere in the world.

• Evaluate potential media partners:  If you had cut back on marketing during the downturn, you may have lost touch with your media partners. Some of your traditional media outlets may not even exist now, and many of them are no longer effective.

This is a good time to explore possibilities with new media partners. Be sure to ask them these questions:

1. Do they have the attention of the target audience you are trying to reach, in both existing and new markets?

2. Can they keep your company, products and services visible to customers and prospects at all times?

3. Do they offer a variety of integrated marketing programs that align with your marketing objectives?

4. Do they deliver targeted, quality leads with full contact information?

5. Do they provide reporting you can use to measure the performance of your marketing and justify your marketing investments?

Once you have lined up potential media partners, work with them to put together a program that will help you accelerate lead generation and branding visibility as you ramp up your marketing efforts. Have the program designed, approved and ready to launch when marketing budgets open up.

It Won’t Be “Marketing as Usual”

If there’s one big lesson for marketers in this downturn, it’s that old forms of marketing will not perform well and will not be tolerated. Avoid this critical mistake: don’t go back to the same old way of doing things.

As a marketer, you must be prepared to think differently about your approaches to connecting with customers, prospects and markets. Even before economic prob­lems hit, marketing was trending away from traditional media such as printed trade journals and in-person trade shows, and towards online media such as online search, e-newsletters, virtual events and banner advertising. Your audience has already migrated online, and will continue to stay online as the economy recovers.

Evidence of the shift online

Here are a few statistics that demonstrate how the behavior of your customers and prospects has changed:

• More than 80 percent of engineering, technical, manufacturing and industrial professionals use the Internet to find components, equipment, services and suppliers, and to obtain product specifications. 73% spend three or more hours per week on the Internet for work-related purposes. Your audience is online; you need to be there to connect with them.

• Four of the top five resources that technical professionals use when searching for products, services and suppliers are online resources: General search engines, online catalogs, supplier Web sites, and GlobalSpec. The only non-online source to make the top five is “peers/colleagues.”

• Engineers and other technical professionals prefer e-newsletters to printed trade magazines as an information source. Over the past 12 months, 30% have reduced their use of printed trade magazines, continuing a documented trend over the past several years. However, 56% receive three or more e-newsletters, and 46% read e-newsletters at least daily or several times a week.

If it is Not Marketing as Usual, What is the Supplier Doing?

Few if any experts expect the old ways of marketing and advertising to come back. Even advertising agencies they see the writing on the wall. According to AdWeek:

“Experts say agencies will not be able to simply return to business as usual. Some will be better positioned to grab a greater share of spending than others, say industry watchers, and those with the edge will be the ones that can optimize the use of digital media.”12

The article goes on to point out that post-recession marketers will “rely on a portfolio of marketing and media vehicles, allowing them to reach with greater precision and greater accountability than they ever had before.”13

On the supplier side, many manufacturers have already adopted the new reality of marketing. According to the recent survey, “Trends in Industrial Marketing 2009,” 30% of industrial marketers are reducing trade show attendance and 38% are reducing print ads. What is taking the place of these traditional media? 48% report that online marketing is a greater portion of their marketing budget in 2009 than in 2008.14 In addition, three of the top four sources of leads for manufacturers in 2009 are online programs: company Web sites, GlobalSpec and e-mail marketing.

Measurement and Accountability are here to Stay

The measurement of marketing effectiveness was becoming a priority before the downturn. It commanded increased attention as executives demanded account­ability from marketing, and measurement will remain a mandate as the economy recovers and marketing is the beneficiary of more investment.

Manufacturers recognize the need for marketing measurement and in a recent survey strongly agreed with this statement: “There is greater pressure to demon­strate accountability and return on marketing investments.”15 Like most companies, manufacturers are loathe to invest marketing dollars not knowing what they are getting for their return, but the fact is that the effectiveness of print ads, trade shows and other forms of traditional marketing have always been difficult to measure.

In response to economic conditions, 69% of manufacturers will closely evaluate the performance of marketing programs and reduce or eliminate programs that don’t perform well, and 53% will choose marketing programs that are measurable.16

The demand for measurement is also infiltrating the world of advertising agencies as clients have come to expect more accountability. Agencies will need a good understanding of measurable programs, know which ones will work for specific client objectives, and be able to deploy them for their clients.

Emerging from the Downturn: A Six-Point Checklist for Success

1. Build marketing plans and justify expenditures now. Don’t wait to hear that funds are available for marketing. Proactively plan your marketing efforts for the recovery and gather evidence to justify your expected marketing expendi­tures. Make sure you receive executive endorsement so you’re ready to go as soon as possible. Otherwise, you might fall behind competitors.

2. Prioritize marketing investments. You won’t be able to start everything at once, which is why it’s more important than ever to prioritize your marketing investments where they will deliver the most return. Seek integrated marketing programs that use multiple tactics to maximize your exposure and opportuni­ties for sales leads and that ensure you are reaching your prospects and clients at every stage of the buying cycle.

3. Explore new markets. Your products and services may be a good fit for one of the faster-recovering sectors. Manufacturers that can display their products and services simultaneously across multiple markets will have the best opportunity to gain new customers. Online industrial ad networks, e-newsletter advertising and vertical search engines are effective ways to target specific customers in new markets.

4. Update marketing materials and fine-tune messaging. Make sure your marketing collateral and Web site are up-to-date with current messaging and the latest product versions. If you choose to enter new markets, you may need to revise some messaging and re-purpose existing case studies, white papers and other materials. Do it now to avoid long lead times.

5. Emphasize measurement and ROI. To get any marketing plan approved going forward, you will need to demonstrate accountability. Today, the most effective marketing programs are online programs whose performance can be measured and analyzed. Online programs are built around impressions, clicks and conversions. You can easily see what is working and focus marketing dollars on the most successful programs, which will help reduce waste while increasing results.

6. Work with new media partners. Preparing targeted, online marketing pro­grams for the economic recovery may be new to you, and you shouldn’t have to do it alone. This is a good time to consult with an experienced online media partner that understands and has the attention of the industrial audience you need to reach. Discuss your marketing objectives and have them show you an integrated marketing program that will help you achieve your objectives and provide measurement and accountability.