How to invest in marketing and sales resources during the economic downturn? In addition to putting resources into areas and customers with greater profit potential, executives must also focus on media and sales efforts that are more likely to achieve such profits. This means cutting down on new tools that have proven to be effective, while cutting on new tools that have not yet been proven, and concentrating resources on sales representatives while streamlining the central back office functions.
For some time, the challenge of diversification of marketing has spawned a combination of more sophisticated marketing tools and sales models. The previous response or a comprehensive cut may be the wrong approach during this recession. Now we need a more sophisticated approach.
The first is to re-prioritize the advertising tools. New communication tools, such as the Internet, social networks, and mobile devices, are becoming scaled and producing positive results. At the same time, traditional media such as television have changed, at least, to become more expensive. As a result, most marketing programs use a combination of traditional and new tools to achieve cost savings while achieving their goals, which typically account for 10% to 15% of expenses. Re-prioritization requires marketers to have a deeper understanding of the effectiveness of different forms of advertising than is currently the case. Marketers believe that the scope and cost of advertising tools represent their effectiveness, thus ignoring the quality of the advertising tools themselves, that is, their ability to influence customers. Quality is easier to measure in direct business, and it can accurately determine the return on investment generated by the outgoing product catalog and email. However, for tools that are more difficult to measure, such as television, product placement marketing, and sponsorship activities, there are ways to estimate their quality and prioritize accordingly.
By combining multiple sources of information, companies can maximize the accuracy of their quality assessments through customer quantitative surveys, post-event discussion groups, and workshops. Some consumer goods companies that have conducted such seminars have found that the consensus formed is in good agreement with more in-depth quantitative research. Regardless of how a company forms its quality assessment, its real role comes from combining this analysis with data on the scope and cost of advertising tools. This combination of scope, cost, and quality helps marketers compare the impact of different tools one by one—a key to effectively prioritizing. There is no consistent model to show whether traditional tools or new tools perform better in terms of scope, cost and quality. Therefore, marketers must make their own objective comparisons so as not to hesitate to eliminate ineffective tools and support the highly influential tools with confidence.
Second, we must re-prioritize the sales function. In order to increase profits, enterprises usually try to reduce the daily expenses of sales in difficult times, and at the same time concentrate resources on the first-line sales team. However, the current sales team uses a different support system than before, and these support are so important that they can't be cut indiscriminately: they play a strategic role in the sales process and are available to more profitable customers. Service and the conversion of potential customers into new customers is critical. If executives significantly reduce this support function in a wide range of cost-cutting actions, they run the risk of seriously damaging the effectiveness of the sales force.
In the current downturn, if the sales executives have to cut costs by 10%. If you cut some product experts, industry-specific sales managers, and telemarketing support, it may lead to fewer sales leads, and a successful conversion rate for sales. The downside of sales will be more serious than the same number of salespeople or account managers. Similarly, streamlining pricing and competitor analysis teams can also lead to poor pricing decisions, which can lower profit margins or waste time on sales leads that have no return. After analyzing the success rate and profit margin of the new contract, the sales person in charge confirmed that retaining product experts and pricing experts is critical to maintaining profitability.
In other words, companies do not have to cut their daily expenses across the board, and they can design their sales plans in a variety of ways while maintaining performance.
Evaluating current sales coverage models can help companies decide which sales and sales support models are more effective for what types of customers and sales, and then rebalance resources as needed. In practice, this approach may require online processing of new orders from repeat customers, completion of basic sales and customer management tasks through telemarketing representatives, and use of larger response teams to handle major ordering requests. Another important step is to analyze the odds of winning and losing in difficult customer negotiations, and consider deciding which sales support teams are more effective, and which teams contribute less and can therefore cut. Streamlining the after-sales process and determining the appropriate level of customer support can also reduce costs. One key to all of these moves is to understand customer expectations and understand the importance of after-sales support for the overall customer experience. This sophisticated approach can help sales and marketing executives more confidently identify cost-saving areas and protect employees and programs that directly contribute to profitability.
In short, companies that have followed the old rules of dealing with recession may be chasing markets and market segments that are less attractive during the current downturn, and invest too much resources in traditional marketing tools and frontline salespeople. To avoid these costly mistakes, marketing and sales executives must re-evaluate their regions, customers, advertising, and sales teams in a dynamic manner, always paying attention to the changing economics of this downturn for win-win marketing. And sales strategies to deal with the economic downturn.
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