Slash and burn
Tuesday, 7 October 2008
By Paul Wallbank
Gerry Harvey’s plans to cut 20% of Harvey Norman’s marketing spend as reported in SmartCompany last week comes as a surprise.
One of the constant recommendations for businesses faced with a downturn is to do exactly the opposite, the idea being that in bad times you need to stand out from your competitors.
Until now, Harvey Norman is the best example of this, having increased its marketing spend whenever confronted with a threat, either in the form of a new competitor or an uncertain economy.
Now it’s not clear whether Gerry Harvey is really planning to slash his marketing or this is just a somewhat subtle warning to his advertising partners that they will be expected to lower their rates for the cause in the near future.
But it is interesting that I’ve been hearing similar tales from small businesses over the last few months. One of the common themes is how they have cut their Yellow Pages and newspaper advertising.
This isn’t unexpected, because these two channels are usually the biggest advertising costs and many businesses are finding more customers are coming through their websites.
Personally I think it’s a mistake for most businesses to completely cut any particular marketing channel unless it’s undoubtedly not performing and I’m not convinced these traditional methods are dead.
For directories and classifieds, it’s quite clear customers are relying on the internet more – Sensis themselves admit over 60% of customers research purchases on the net before buying – but ditching one channel for another risks missing some opportunities.
A good strategy is to use the different channels to complement each other; one of the great things about web sites and the various web 2.0 tools is they work very well when used alongside traditional methods such as direct mail, classified ads and phone directories.
There’s no doubt we are in uncertain times and business owners need to watch costs, but times like these are also when it’s important to let customers know why you are the best.
So it’s a good time run a sharp eye over your marketing spending and perhaps rattle the cage of some of your suppliers.
But don’t lose track of the main game when things become uncertain; you need to keep getting your message out there.
Paul Wallbank is Australia’s most heard computer commentator with his regular computer advice spots on ABC Radio. He's written five computer books and just finished the latest Australian adaptation of Internet for Dummies. Paul founded and built up a national IT support company, PC Rescue and has a free help website at IT Queries. Today he spends most of his time consulting and advising community and business groups on getting the most from their technology.
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