Let’s get this out of the way right up front. We’re in one of the worst economic slumps in the history of the U.S. The week before Thanksgiving, the Dow Jones Industrial Average closed below 8,000 for the first time in five and a half years. We’re also in the midst of a horrific credit crisis that is crippling the financial, auto and housing markets in the U.S. If that wasn’t bad enough, earlier in November, the unemployment rate in the U.S. hit a high of 529,000 — the highest it’s been since the grand old days of President Jimmy Carter in 1983.
Do you feel all warm and fuzzy yet? At least you know I’m not going into this post with rose colored glasses on. I know that the economy stinks right now but here’s the good part. Not all hope is lost. In fact, I’d argue that there is no time like the present to shore up that leaky bucket businesses call “customer attrition” with a healthy dose of retention, loyalty and a greater willingness to recommend.
- Let’s kick off with some research from our friends at Forrester Research that uber-analsyt, Josh Bernoff, included in a report back in April of this year. The piece titled, Interactive Marketers Are Bullish In A Recession (requires login), was based on a survey of 333 interactive marketers conducted by Forrester. The essence of the post was that interactive marketers were still bullish on things like e-mail, search engine, web and social marketing even though the economic outlook for the country was less than rosy. While it’s true that things have gotten worse since Josh put the report together, I think a majority of the takeaways still apply. Below are excerpts from some of the major bullets from the report along with a diagram below that of the response by marketing channel/tool:
- Interactive budgets will mostly hold steady or increase. Seventy-two percent of the interactive marketers we surveyed expect to keep their interactive spend on plan or increase it in a recession.
- Social applications will garner the greatest increases. Interactive marketers are most likely to increase investment in social networks, with 48% planning an increase and another 34% keeping investment steady. Marketers are also bullish on user-generated content and blogs. Podcasts, RSS, and widgets, while less popular, will still generate increased investment from at least 20% of interactive marketers (see Figure 2). These channels actively engage customers, are fueled by user contributions, and scale without significant additional marketer resources.
- Display ads could lose ground. More than 40% of respondents expect to decrease spending on display ads, while only 10% plan an increase.
- Josh isn’t the only one that’s bullish on the fact that social media/social marketing is a good bet in a down economy. In fact, successful entrepreneur AND social media guru, Gary Vaynerchuck provides good rationale as to why it’s impossible to ignore social media as the effectiveness of marketing and advertising vehicles like banner ads and SEM, continue to erode (note: this is mostly video but it’s worth the watch).
- Back to Josh on this one – it’s MEASURABLE! And not just in a “we got 18 comments on our blog” measurable. I’m talking, “we know that our customers are xx% more likely to buy from us and xx% more likely to recommend this product/service to a friend or family member. See my recent post on ROI for more details on results we’ve seen with some of our clients.
What, three reasons isn’t good enough for you? Here are a few more posts that give their own reasons as to why you should think about social media/social marketing during the downturn.
- A Good post from Streamyx that re-inforces Josh’s message and in particular, provides a list of 6 reasons how to think about your social media strategy. – http://www.streamxy.com/2008/10/16/is-social-media-recession-proof/
- Five more ways to include social media in your small business during a recession from BusinessPundit.
- More goodness from Convince and Convert – in particular the two bullets on:
– More Juice for the Squeeze
– Waste Not
What ways are you including social media/social marketing into your business during this time of opportunity? Thoughts are welcome in the comments below…
Cross-posted on http://theengagedconsumer.powered.com