Friday, November 7, 2008

The Definitive Guide to Business-to-Business Marketing in a Recession

by Jon Miller

Does an economic slowdown necessarily mean that business-to-business marketers have to find even more ways to do more with less? Or can a downturn create opportunity for smart marketers to grow and thrive?

In this guide to B2B marketing during a recession, I answer these questions and share specific strategies you can use to shine when times are dark.

Are We in a Recession?

First of all, I should explain I do not think that the US is in a recession—yet. A recession requires two quarters of negative GDP growth, and the Bureau of Economic Statistics reported 0.6% growth for Q4 2007 while preliminary numbers for Q1 2008 show 0.9% growth.

So we may not yet be in a recession, but times are growing increasingly difficult for consumers. The subprime mess is real, rising energy and food costs are cutting into discretionary spending, and the weakened dollar is importing inflation to our economy.

According to the Web site How I Spent My Stimulus, the $152 billion stimulus package is going primarily to reduce consumer debt or pay for higher gas and food costs, not to stimulate incremental spending.

I like to say that we are in the worst possible non-recession. And, since prior downturns avoided becoming a (global) recession because of resilient spending by American consumers—a saving grace we don't have this time—things may still get worse before they get better.

What Does This Mean for Business-to-Business Marketing?

Fewer consumers means less demand; less demand means efforts to stimulate demand (i.e,. marketing) are less effective overall. In other words, when people buy less, advertisers spend less. According to research firm Veronis Suhler Stevenson, advertising in the US dropped 9% in the 2001 recession and Internet advertising specifically fell 27%.

I should point out that this slowdown applies to business-to-business marketers as well, because as consumer spending drops the businesses that sell to those consumers reduce their spending as well.

However, these macro trends hide two important facts:

1. Branding and other forms of push marketing drop in a slowdown, while direct marketing tends to rise. When budgets are cut, the channels with the least ability to measure marketing ROI are cut especially hard as companies shift spending to more measurable channels. Investment bank Cowen and Company looked at the last six recessions since 1950 and found that spending on direct marketing actually grew during six recessions.
2. This time is different for online marketing. In the 2001 recession, online marketing was still unproven and got caught in the downward collapse of the Internet in general. Today, the trend to shift advertising dollars to measurable online channels is proven and won't disappear anytime soon. However, just because online marketing won't crater doesn't mean it isn't immune from a slowdown. In fact, eMarketer recently reduced its 2008 estimate for US online advertising to $25.8 billion. That is a 7% reduction from its prior estimate—but it is still 23% higher than 2007's total. In other words, the recession may slow down the growth of online marketing, but it's still growing at a significant pace.

What this means is that a recession will accelerate the decline of interruption-based mass advertising that simply shouts your message to customers. In its place we will see increased growth in measurable and relationship-based strategies such as search marketing, email marketing, lead nurturing, and online communities.

A downturn can also create opportunity for the companies that are more efficient at turning marketing investments into revenue, since there will be less competition overall.

In a study of US recessions, McGraw-Hill Research found that business-to-business firms that maintained or increased advertising expenditures during the 1981-1982 recession averaged significantly higher sales growth than those that eliminated or decreased advertising. It found, in fact, that by 1985 the companies that were aggressive recession advertisers had grown their revenue over 2.5X faster than those that had reduced their advertising.

Seven Strategies for B2b Marketing During a Slowdown

Given these macro-economic trends, how should you allocate your marketing budget—and time? Here are specific business-to-business strategies you can use during a downturn:

1. Use lead management to maximize the value of each lead

In a recession, risk-averse buyers take longer than normal to research potential purchases. When you first identify a new prospect (regardless of whether he/she downloaded a whitepaper, stopped by your booth at a tradeshow, or signed up for a free trial), that prospect is more likely than not still in the awareness or research stage and is not yet ready to engage with one of your sales reps.

This means that you need lead scoring to identify which leads are highly engaged and lead nurturing to develop relationships with qualified prospects who are not yet ready to engage with sales. Without these capabilities, as many as 95% of qualified prospects who are not yet sales-ready never end up turning into a sales opportunity. These prospects are valuable corporate assets that you worked hard to acquire, and in a down economy you need to do everything possible to maximize value from them.

Implementing even simple automated lead-nurturing programs can yield a 400% improvement in the conversion of qualified prospects into sales opportunities over time. Net-net: Companies that can do a better job of managing leads and developing early-stage prospects into sales ready leads will be in the best position to thrive in a downturn.

2. Focus on your house list

In a recession, you may have less money to spend on acquiring new customers. The solution is simple: Spend more time marketing to (and building relationships with) the people you already know.

Activities that can help you get the most out of your existing relationships include conducting lead-nurturing campaigns, creating new content to offer to existing prospects, and cleaning and augmenting your marketing lead database with progressive profiling.

3. Build and optimize landing pages

When times are tough, it's more important than ever to maximize the return on your advertising. Whether you are using Google AdWords, banners, sponsorships, or email campaigns, a dedicated landing page is the single most effective way to turn a click into a prospect.

A relevant landing page can easily double conversions versus sending clicks to the homepage, and testing your pages can increase conversions by another 48% or more. Together, these tactics alone can result in 2.5X more leads for every dollar you spend, something that's sure to look good in tough times.

However, most companies are under-using this important technique: 44% of clicks for B2B companies are directed to the homepage, not a special landing page, and of B2B companies that use landing pages 62% have six or fewer total pages.

A recession is perhaps the best time to focus on some of these basics.

4. Content is for later in the buying cycle

When buying slows down, you need to focus more than ever on making sure that you are finding the prospects who are actually ready to buy—or, even better, make sure that they are finding you.

One great way to do this is to focus your offers on content that will appeal to someone who's actually looking for a solution (as opposed to thought-leadership and best-practices content, which can appeal to prospects who may one day have a need but are not currently looking). Examples of this kind of content can include "Top 5 Questions to Ask a Potential Vendor" whitepapers, buyers guides and checklists, analyst evaluations, and so on.

5. Appeal to the nervous buyer

A recession can mean more risk-averse buyers, which may lead to a tendency to go with "safe" solutions. This is fine for large established companies, but it means that younger companies need to do more than ever to reassure buyers and build trust.

Tactically, this means including customer references, reviews, expert opinions, awards, and other validation as part of your marketing.

Strategically, a recession means fewer risk-takers and visionaries, so take a lesson from Geoffrey Moore's Crossing the Chasm (pdf) and use methods that appeal to mainstream pragmatists: industry-specific marketing tactics and solutions, vertical customer references, relevant partnerships and alliances, and whole-product marketing.

6. Align sales and marketing

Today's prospects start their buying process by interacting with marketing and online channels long before they ever speak with a sales representative. This means companies must integrate marketing and sales efforts to create a single revenue pipeline.

The old days of functional silos and poor communication between the two departments must end. A tougher selling environment, driven by a recession, means this is more true than ever.

7. Don't be a cost center

Most executives today think that Sales delivers revenue and Marketing is a cost center. Marketers are partly to blame for part of this mindset, since when we use metrics such as "cost per lead" we frame the discussion in terms of costs, not in terms of impact on revenue. More subtly, language like "marketing spending" and "marketing budget" instead of "marketing investment" perpetuates these beliefs.

In a recession, marketing needs more than ever to change these perceptions. This means that marketing investments must be justified with a rigorous business case and should be amortized over the entire "useful life" of the investment. And it means marketing must increase marketing accountability by demonstrating the impact of each marketing activity on pipeline and revenue.

Of course, this is easier said than done, but that doesn't mean you shouldn't try. Even small steps, like reports that show the total opportunity value for each lead source or campaign, can make a big impact.


Even if we aren't in a recession, we are in for some tough economic times—and an economic slowdown means a tendency to scale back marketing spending. However, research shows that a downturn creates opportunity to accelerate growth faster than your competitors. This means it may be the best time to step up your marketing—at least in quality if not quantity.

The marketers who focus on getting the most out of every dollar spent and on demonstrating marketing's impact on revenue and pipeline will be well positioned to come out of the slump looking like a star.


Anonymous said...

Hey there! I know this is kinda off topic but I was wondering which blog platform are you using for this
site? I'm getting fed up of Wordpress because I've had issues with
hackers and I'm looking at options for another platform. I would be fantastic if you could point me in the direction of a good platform.

My weblog - know more

Anonymous said...

These are really enormous ideas in concerning blogging.
You have touched some good things here. Any way keep up wrinting.

my site: more info

Anonymous said...

When some one searches for his vital thing, thus
he/she needs to be available that in detail, thus that thing is maintained over here.

Also visit my website ... more information

Anonymous said...

Wonderful beat ! I wish to apprentice while you
amend your site, how could i subscribe for a blog site?

The account aided me a acceptable deal. I had been tiny bit acquainted of this your broadcast offered bright clear idea

Anonymous said...

I’m not that much of a internet reader to be honest but your blogs really nice, keep it up!

I'll go ahead and bookmark your site to come back later on. All the best

Review my page - more information

Anonymous said...

There is certainly a great deal to learn about this topic.
I really like all the points you've made.

Also visit my site ... More Information

Anonymous said...

Admiring the time and effort you put into your site
and detailed information you present. It's nice to come across a blog every once in a while that isn't
the same unwanted rehashed information. Great read!
I've saved your site and I'm adding your RSS feeds to my Google

My website ... website

Anonymous said...

Have you ever thought about adding a little bit
more than just your articles? I mean, what you say is important and all.
However think about if you added some great pictures or videos to give your
posts more, "pop"! Your content is excellent but with pics and
video clips, this blog could undeniably be one of the most beneficial in
its niche. Very good blog!

Also visit my site more info

Anonymous said...

I have been exploring for a little for any high quality articles or
blog posts in this kind of space . Exploring in Yahoo I eventually stumbled upon this
web site. Studying this information So i'm satisfied to express that I have an incredibly good uncanny feeling I came upon just what I needed. I such a lot no doubt will make certain to do not fail to remember this website and provides it a glance regularly.

Feel free to surf to my webpage :: more information

Anonymous said...

Hi Dear, are you in fact visiting this web site daily, if so after that you will without doubt take nice knowledge.

Feel free to surf to my website :: Click Here

Anonymous said...

Incredible points. Outstanding arguments. Keep up the amazing work.

My web blog :: website

Anonymous said...

Good post! We are linking to this great article on our website.

Keep up the great writing.

My page site

Anonymous said...

Good day very nice website!! Man .. Excellent .. Superb
.. I will bookmark your blog and take the feeds also? I am glad to search out a lot
of helpful info right here within the publish, we want develop extra strategies in this regard, thank you for sharing.

. . . . .

Stop by my blog; more info

Anonymous said...

What a stuff of un-ambiguity and preserveness of precious
knowledge about unexpected emotions.

My homepage website

Anonymous said...

Very soon this website will be famous amid all blogging and site-building people, due to it's good articles

Feel free to visit my page: visit link

Anonymous said...

I'm gone to inform my little brother, that he should also go to see this blog on regular basis to obtain updated from newest information.

My web-site - more info

Anonymous said...

I've learn several good stuff here. Certainly price bookmarking for revisiting. I wonder how much effort you put to create such a excellent informative web site.

My weblog: know more

Anonymous said...

I think this is among the most important info for me. And i'm glad reading your article. But wanna remark on few general things, The web site style is wonderful, the articles is really excellent : D. Good job, cheers

my weblog - more info

Anonymous said...

Great post however , I was wanting to know if you could write a
litte more on this subject? I'd be very grateful if you could elaborate a little bit further. Bless you!

Check out my web-site :: click here

Anonymous said...

hey there and thank you for your information – I've definitely picked up something new from right here. I did however expertise a few technical points using this web site, as I experienced to reload the site lots of times previous to I could get it to load correctly. I had been wondering if your web hosting is OK? Not that I'm complaining, but sluggish loading instances times will often affect your placement in google and could damage your quality score
if advertising and marketing with Adwords. Anyway I am adding
this RSS to my email and could look out for much more of your respective
fascinating content. Make sure you update this again soon.

Review my web site :: more info

Anonymous said...

Good day! This post couldn't be written any better! Reading through this post reminds me of my previous room mate! He always kept talking about this. I will forward this write-up to him. Fairly certain he will have a good read. Thank you for sharing!

Also visit my blog - Know More

Anonymous said...

Thank you for another great article. Where else could anybody get that kind of info
in such a perfect way of writing? I've a presentation next week, and I'm on the search for such

Look into my website; stage hire Gauteng

Anonymous said...

I don't write many responses, however I looked at some of the comments on "The Definitive Guide to Business-to-Business Marketing in a Recession". I actually do have a few questions for you if you tend not to mind. Could it be just me or does it look like like some of the comments look like they are written by brain dead folks? :-P And, if you are writing on other online social sites, I'd like to follow you.
Would you make a list of every one of your social pages like
your twitter feed, Facebook page or linkedin profile?

Feel free to visit my webpage corporate event hire Sussex

Anonymous said...

Just wish to say your article is as astonishing.
The clearness in your post is just cool and i could assume you are an expert on this subject.
Fine with your permission let me to grab your feed to keep updated with forthcoming post.
Thanks a million and please continue the enjoyable work.

My web page; group accommodation and conferencing Johannesburg

Anonymous said...

Hi there, everything is going well here and ofcourse every one is sharing information, that's actually good, keep up writing.

Take a look at my blog post :: automation of garage doors Sandton

Anonymous said...

That is a great tip particularly to those new to the blogosphere.
Brief but very accurate information… Thank you for sharing this one.
A must read post!

My web site; boat designs Cape Town

Anonymous said...

Hi there! I'm at work browsing your blog from my new apple iphone! Just wanted to say I love reading through your blog and look forward to all your posts! Carry on the superb work!

Here is my site :: womens health Windhoek

Anonymous said...

I'm really impressed along with your writing skills and also with the layout for your weblog. Is this a paid theme or did you customize it your self? Either way keep up the excellent quality writing, it is rare to peer a nice weblog like this one nowadays..

Visit my site; architecture Gauteng

Anonymous said...

Pretty section of content. I just stumbled upon your web site and in accession capital to
assert that I get actually enjoyed account your blog posts.
Any way I'll be subscribing to your augment and even I achievement you access consistently rapidly.

Here is my web site; wall decor Cape Town

Anonymous said...

I'm truly enjoying the design and layout of your site. It's a
very easy on the eyes which makes it much more pleasant for me to come here
and visit more often. Did you hire out a designer to create your theme?
Fantastic work!

Feel free to surf to my blog home decor

Anonymous said...

Good day! Would you mind if I share your blog with my facebook group?
There's a lot of people that I think would really appreciate your content. Please let me know. Thanks

My weblog - accountant

Anonymous said...

Hi there! I just wish to offer you a huge thumbs up for the great info
you have right here on this post. I am coming back to your web site for more soon.

Visit my web page - hydraulic repairs

Anonymous said...

I don't know whether it's just me or if everyone else encountering problems with your blog.

It appears as if some of the written text in your content are running off
the screen. Can someone else please comment and let me know if this is happening to them too?

This might be a issue with my web browser because I've had this happen previously. Appreciate it

my web-site: recruitment

Anonymous said...

When I initially commented I seem to have clicked
on the -Notify me when new comments are added- checkbox and from now on whenever a comment is
added I get four emails with the exact same comment.
Is there an easy method you can remove me from that service?
Appreciate it!

Here is my website: catering Cape Town

Anonymous said...

Very nice post. I just stumbled upon your weblog and wished to say that I have truly enjoyed surfing around your blog posts.
In any case I'll be subscribing to your rss feed and I hope you write again very soon!

Here is my website ... vehicle signage Gauteng

Anonymous said...

Good post. I learn something new and challenging on blogs I stumbleupon on a daily basis.
It's always interesting to read content from other authors and use something from their sites.

my web-site: landscapers

Anonymous said...

Undeniably consider that that you stated. Your favorite
reason appeared to be on the web the easiest factor to be mindful of.
I say to you, I certainly get irked even as people consider
worries that they plainly do not recognize about.
You managed to hit the nail upon the top and also defined out the whole
thing with no need side effect , other folks could take
a signal. Will likely be back to get more. Thank you

Visit my weblog - sign company

Anonymous said...

Thanks for your marvelous posting! I truly enjoyed reading it, you
will be a great author. I will remember to bookmark your blog and will eventually come
back very soon. I want to encourage one to continue your great posts, have a nice holiday weekend!

my web page: vehicle Branding western cape

Anonymous said...

I think this is among the most significant info for me.
And i am glad reading your article. But should remark
on some general things, The site style is great, the
articles is really excellent : D. Good job, cheers

Also visit my weblog ... Bookkeeping Around Durban

Anonymous said...

Thanks in support of sharing such a pleasant opinion, piece of writing is good, thats why i have read it

Also visit my webpage - cranes