Small Businesses Concerned with Economy...

For some reason, this article really brought home today's economic reality. The article presents results of a recent survey of small businesses. Essentially, it talks about how concerned small businesses are with the state of the economy. It reiterates how the economy has had a huge impact on this sector, in particular.

The survey found that 66.4% of small business owners have been affected for
the worse by the recession -- and that a full 80% see the economic crisis as the
primary mandate for the new government.

Small business is the backbone of the U.S. economy representing 99.7% of all employer firms, and generating 60 to 80% of new jobs annually over the past decade, according to the Small Business Administration.

Perhaps this news, in particular, resonates because my small business has also been negatively impacted by these trying times. RRW has a focus on providing direct marketing solutions to financial services firms--an industry definitely hit hard by this economy. Our business has suffered.

You know what? I'm mad. I'm sad that I lost a business partner and feel for some clients who've either had their marketing budgets cut dramatically, have laid off a good portion of their staff, or (in the extreme) have gone out of business entirely.

Yet, I cannot even imagine thinking that someone out there will magically appear and throw money at RRW. As much as I'd like to, I cannot think that there my fairy godmother will show up with her magic wand and a purse full of clients with huge budgets.

So, hearing about huge companies looking for their fairy godmother in the form of our tax money simply irks me.

OK, I'll get off of my soap box and start the day. I'll get back to work and come up with a value proposition, a direct marketing idea that one of my smart clients will pay for. Isn't that the way this country works?

Economic forecast for marketing spend

"Direct's annual survey of e-commerce practices shows continued investment in digital strategies, with additional spending anticipated for 2009."

The above is a quote from the leading paragraph in a Direct Magazine article, titled "What Downturn?". The article reports on results of a recent survey that measured online and other marketing spending trends.

It should be no surprise that in this tough economy companies are looking for a measurable return on their marketing investment.

According to Direct's research, 29% of all marketers have shifted marketing dollars from traditional channels to online media, a figure comparable to last year's study.

Of course, online media is augmented with off-line. Marketers are embracing a multi-channel approach, with a slightly different 'spin' for B2B vs B2C marketers.

Consumer firms indicate direct mail is their key Web site traffic driver, with e-mail a close second. Natural search (as a result of search optimization), paid search listings and word-of-mouth referrals follow.

B-to-B firms rely more on word of mouth — so much so that it's the top-cited channel for generating Web traffic. E-mail and direct mail campaigns are gaining fast, though, while search engine optimization trails, a distant fourth.

Some other interesting findings:

• Just over half of B-to-B respondents optimize their Web sites in order to boost rankings in search engine queries, compared with more than two-thirds of consumer companies.

• Consumer marketers are more diligent about collecting and analyzing clickthrough data than B-to-B firms. Better than three out of four consumer respondents do this, vs. 57% of B-to-B DMers.

• Just over one out of five respondents say staffing in their online marketing departments was up during the last 12 months, while nearly two-thirds note that it stayed the same. As in 2007, only 4% lost employees.

My take: Overall, direct marketing, as an industry, is alive and kicking. We're poised for growth in key areas (analytics is one of them) and a multi-channel approach is important.

Links O' The Week

TGIF! And welcome to our favorite links of the week.

To start off, we've been doing a lot of ranting about the economy of late. And most of the kvetching has been around what's gone on in the mortgage market. Let's face it, most of us aren't happy about this. Today's first link is from the Goodlin Group from my own South Bay neighborhood. Ron Goodlin provides us the take of his CFO on what's going on in the mortgage market, and some of the news is brighter than you may think. It's an interesting viewpoint and I think you'll find this article full of good information on a topic that impacts us all -- direct marketers or not.

Next, and staying on topical issues, Heidi Cohen of ClickZ provides us with Marketing Lessons from the (never-ending) Presidential Primaries. Heidi takes us through twelve campaign tips that marketers can use to assess their online campaigns. From creating a campaign plan to raising sufficient funds, Heidi relates how each of these tips can help you make your online marketing campaigns more successful.

Finally, in a very troubling post, the WiseMarketer reports that Marketing is still struggling to prove it's real value. The reason that this post is so troubling to us is that as marketers, we talk about the value of measurement and tracking, then apparently don't even do it internally to prove the value of what we do on a daily basis. For us, this is just plain crazy. In order to make what we do gain positive attention, we must articulate our success in financial terms. In a sputtering economy, your budget will definitely be cut if you aren't able to effectively prove your value. Yikes!

Finally, finally . . . just for the fun of it visit Diz White's site. My friend, Linda, introduced me to Diz's work, and I've actually been lucky enough to read her newest manuscript, "Life is a Bowl of Cherries." I'm sure that she'll sell the book on her site once it's been published . . . and when she does, quick -- get a copy. The story relates Diz and her husband's journey of finding the perfect cottage in the Cotswolds, a range of beautiful hills in West-Central England, while working as actors in Los Angeles. It's a great tale of the crazy jobs they took to fatten up their bank accounts so that they could afford a cottage in their dream location. Diz is a fabulous writer and as the reader, you get seriously caught up in her journey. What a blast!

Have a great weekend!

Downturn-Shmownturn!

Is it me or is there some bad karma out there economically? I know -- it's all over the news, and worse, corporate giants are falling daily. But still . . . I think we, as positive direct marketers, need to inject some good karma into the economy.

The freaking reality is that we are in an economic downturn. However, I fear that this downturn will only be lengthened by our words and actions -- or lack thereof. Over the past couple of months, more folks than ever are wailing about how bad the economy is . . . and, trust me, our phones aren't exactly ringing off the wall either. And we really hate that.

Here's the thing . . . we can change this! All it takes is us convincing our clients and business partners that they need to spend their marketing budgets much more wisely. Let's face it -- business has not ground to a halt. Consumers and businesses alike are still responding to marketing campaigns.

True . . . budgets have been cut and resources have been laid off. However, now is the time to take stock of what you have been doing with your marketing budgets and measuring the success of each component. Examine your last few campaigns . . . can you measure each campaign's individual success and specifically tie it to your corporate profitability? If you can't, you need to re-group and figure out how to squeeze every single decimal-point increase in response or conversion out of every campaign. If you don't have the metrics in place to do it today, go get the tools that you need now.

Here's what this will do . . . as the economy clicks back up (and it will -- it's a cyclical thing I swear!), you'll be armed and dangerous to your competition to go out and direct market with all of your guns blazing. In the interim, you can prove to your leadership that you are putting the proper measures and tools into place to ensure that every single marketing dollar is being spent optimally -- both today and going forward. And, as you put these measures into place, you can back this up with statistics. This makes you look like a forward-thinking individual who is making a positive impact on the business. These types of people are the ones who get the raises, the better jobs and are most successful for the long-term.

Finally, any time anyone around you starts belly-aching about how the economy will be the death of us, punch them in the nose. Or, if this is not a politically correct thing to do at your company, politely tell them to keep their bad karma to themselves. Surround yourself with positive people. Success begets success -- and trust me, you'll feel better.

Enough of my rant. I need to get back to work to make my business as successful as it can possibly be. And, I'm hoping (you valued clients, you) that you'll turn to us to help you create success in your own business. You can count of a positive outlook from Suzanne and I!

Rock On!

Direct Marketing and the Impact of the Economy

If you've been reading our blog for long, you know that we've written much about how this "new" economy is impacting direct marketers. Obviously, the economy effects all of business -- and in times of economic downturn, we seem to discuss it's impact much more than when things are more rosy.

Today, there is more evidence that the slowing economy has really taken a toll on us -- particularly in the area of financial services, and more specifically, mortgage and student lending. The fact that there are increasing amounts of people that are losing their homes to foreclosure due to financing with subprime mortgage lenders has become the leading story in all of our newspapers. Plus, there is now further scrutiny by our political leaders on student loan providers (for more on this, please see our post from last week).

In today's DM News, author Eleanor Trickett reports that now "the Federal Trade Commission and a couple of Attorneys General have pointed the finger at fraudulent mortgage marketers." And further, due to this, "there’s no question that market forces have caused many direct marketers and their agency and supplier partners to reconsider how they are marketing products in such a volatile environment."

We all know of stories where people bought homes that they could not afford due to the creative financing that was available to them -- and as we watched the run-up on housing prices, we all knew from history that there would be an eventual . . . and certain . . . pullback.

At any rate, due to this focus on the mortgage industry, direct marketers have had to come up with new ways to more effectively serve the market today in order to help their companies sell more loans. As Trickett reports, "Many financial services marketers have told me that they have significantly retooled their mortgage marketing programs, from straightforward acquisition tactics to a strategy based more on education and informed decisions. What effect this will end up having on conversion rates has yet to be seen, but it will be interesting to learn how mortgage marketers are trying to maintain ROI for their DM efforts."

From our perspective, this is just another example of how we have to be continually prepared to rise to the challenges that the economy brings us. As direct marketers, we have to come up with better and more effective ways to increase response and conversion rates -- and positively impact ROI . . . even when the economy is not being particularly helpful.

We've all heard the saying "Hindsight is 20/20." We can all think of the conversations that we were having one and two years ago predicting this eventual outcome in the mortgage market. The problem was that we were all in the midst of riding the highs of that market, and striving to take advantage of those profitable times. Well, in hindsight, we did all see the downturn coming. As we continue to see the impact of the economy on mortgage lenders, we'll bet that those companies who planned for the downturn and began to plan their strategy accordingly are most likely the companies that will continue to prevail in this new economy. As we continue to track this, those companies will reveal themselves and establish (or maintain) their leadership position in the mortgage industry. We predict that the lessons learned from this difficult time will be the subject of business school case studies for years to come.

Yikes! Is it Monday or what? Have a good week! : )

Direct Marketing and the Economy

This is the time of the year when we all start looking at our revenue performance and begin to set our strategy for 2008. Over the past several months, we've reported some wonderful results for the direct marketing industry on this blog. We've reported how data sales are increasing, direct mail numbers are up, higher results from using e-mail marketing, and so forth. While we've been talking about the strength of our industry, the US Economy has been going through some definite shifts. With the flailing about of the mortgage market and the tightening of credit, some economic analysts consider this the start of a recession, while others state that we are firmly ensconced in one already. Whatever you believe to be the actual case, this bears some looking into as we plan for next year . . . or the next few years.

In the midst of all of this, DM News has reported that Silver Lake and Value Act's acquisition bid of data compiler and database giant, Acxiom, has fallen through. According to Bruce Biegel of Winterberry Group, “This deal was announced back in May, with Silver Lake jumping in with ValueAct Capital, but the credit markets have changed since then. Consider this pricing issue with the fact that Acxiom has a substandard quarter and the risk of a second one doesn’t create a comfort level for investors.”

The article goes on to state that Biegel does remains confident in the potential for growth in the data sector. However, he points out what we already know (at least those of us who have clients within the financial services sector) -- "that the bad credit market is not helpful to Acxiom, many of whose clients are credit card companies and financial services firms suffering from the current economic slump and subprime issues. In addition, he acknowledged challenges to the postal increase earlier this year and the expected increase next year."

However, as you'd expect, Acxiom's retiring CEO, Charles Morgan, remains confident about the strength of his company, and promises to work harder than ever to show value to Acxiom's various stakeholders.

What all of this proves to us is that during the peaks and valleys of our economy, the playing field is strangely leveled. It doesn't matter what size firm you are . . . it seems that everyone is impacted in some way or another.

The other takeaway from this experience is that though you are working hard in the present to assist your clients, you must do so with an eye towards the future. If you can effectively diversify your client base or product offering, you simply have more staying power as the economic factors shift.

Obviously, Acxiom is going to be A-OK -- and then some. They are a giant in the industry and it sounds like they are already planning their next critical steps. As Morgan puts it, “Acxiom has been an industry leader for over three decades. We will continue to execute on our long-term strategy to remain the market leader in database marketing, services and data products.” And, the beauty of the economy is that it tends to be cyclical. Those of us who have been around for awhile remember when this sort of economic pullback happened in the 90s . . . and the 80s . . . and so on.

So, as 2007 enters its final quarter, we advise you to start planning exciting new things for 2008. One of the best places to start your planning is to take a hard look at your overall marketing strategy. We've written some Holiday Tips that may help to spark some good ideas as you begin this planning process. They were written at the end of last year but now is the time to take them out, dust them off, and re-look at them to get some ideas flowing for your 2008 Marketing Strategy. After all, the Annual DMA Conference is right around the corner. By putting these plans into place now, you'll be armed with some great ideas so that you can do some solid research at the conference and come home with your 2008 strategy well on it's way to being completed.

You'll be so far ahead of the game that you'll look like a hero to your CMO. It's like having all of your Holiday Shopping done by the day after Thanksgiving! That's always a great feeling!