Posts tagged ‘budgets’

Boost your customer base by lowering, not raising, prices

This is a tough time for most business. Many companies are losing a lot of customers and having trouble meeting revenue commitments outlined in their 2009 budgets, which are usually created in the previous fall season. This is happening, of course, because most people did not realize that the economy would fall into recession in 2009. Executive management teams are meeting in their boardrooms every single day, trying to figure out what to do to stabilize customer retention. Chances are good that two prevailing schools of thought are being bandied about:

  • School Of Thought #1: Since we are currently losing customers very quickly, we need to make up for that shortfall by reducing costs (which has probably already been done), while at the same time increasing our prices in order to achieve more revenue per customer. If we have lost 10% of our customers, and raise our prices 10%, we could probably close the revenue gap.
  • School Of Thought #2: We’ve lost several customers during the first half of the year, and we need to focus on keeping those customers while obtaining a few new ones. Along with reducing our costs (which has probably already been done) we need to reduce our prices, providing an incentive for current customers to stay with us and encouraging prospects to become customers.

As a marketer and ardent capitalist, I believe in School Of Thought #2. It looks at the marketplace as a non-finite tub of potential revenue, even during recessionary times. It also views an increase in price as a form of taxation on current customers, which is a bad idea during good economic times and an even worse idea now. I’ve seen many struggling companies adopt School Of Thought #1, only to see them descend into a business death sprial. As customers balk at higher prices and bail out, this leaves an even smaller customer base to provide the revenue stream necessary to maintain operations. The cycle of higher prices and fewer customers seals a company’s fate and failure becomes inevitable.

From a marketing perspective, it’s an even tougher sell. We’re always looking for unique selling propositions (USPs) and differentiators, and I’ve found that raising prices kills off great marketing each and every time. It poisons the fragile relationship with the customer, leaving them bitter and resentful. Another aspect to consider is the fact that, nowadays, customers don’t go away quietly. They use social networking and forums to voice their displeasure, and most of the time it ain’t pretty.

Before you pull the pricing lever, be sure you’ve fully analyzed your pricing model and exhausted other options. After all, if you make the wrong decision, it may be you that ends up paying the price.

(If you need help with pricing, or you have other marketing needs, contact me at Aximum Marketing. I’ll be happy to help.)

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June 17, 2009 at 11:19 pm 2 comments

Social Media success story

Sure, you’ve heard a lot about social media sites like Twitter, Facebook and, yes, even WordPress (I’m being ironic). But there haven’t been a lot of success stories attached to those ‘new marketing’ tools, mostly because a lot of marketers aren’t clear how to measure success. Simply put, success is defined as the achievement of pre-determined goals based on actual, real-life business needs and objectives.

Here’s a great social media success story from my company, Aximum Marketing. One of our clients was trying to elevate his company above the competition during a downtime, while his rivals were scaling back on marketing and overall customer communication. The goals were focused on lead generation, website visits, ecommerce revenue, and industry leadership. By developing a number of different social media programs, we were able to get some amazing results for them. And the real kicker: the initial execution on these initiatives cost only about $5K, and had a ROI of 350:1 after 4 months. Read all the details, as well as my other success stories, and contact me if you’d like to incorporate social media into your company.

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May 13, 2009 at 3:51 am Leave a comment

Marketing Churn – what is it, and how to avoid it

churn

Ah, yes. The beauty of the ocean crashing upon the shoals, cascading across the water-beaten rocks in an awesome spectacle of raw, natural power. For eons, these rocks have borne the brunt of nature’s wrath in an unending tug-of-war between an unstoppable force and an immovable object, providing constant movement but no objective sign of progress.

Do your marketing efforts feel the exact same way?

If they do, you’re not alone. It’s all too common to have marketing teams engaging in tons of activity, constantly moving and working on stuff but providing no real signs of progress. We call this seemingly futile exercise “churn.” This is one of the main reasons why many people see marketing as an inefficient and unmeasurable activity, and it’s also a big reason why marketing budgets are so high. Not only is churn frustrating to management, but it’s also discouraging to your marketing team. And don’t even ask about how it affects your relationship with your customers.

What’s the best way to avoid churn? If a solid process is put in place on the front end, it’s easy to keep marketing activities more focused, more disciplined, and more tightly aligned with the overall goals of the company. At Aximum, we use a system called the “Marketing Success Cycle,” specifically designed to eliminate marketing churn:

  • Assess the current situation based on past communication activities, current needs, competition, and marketplace trends/factors
  • Report the findings in clear, unambiguous language, focusing on how to improve communication and increase revenue opportunities
  • Diagnose the best courses of action based on timelines, budget, and goals
  • Execute on the agreed-upon strategies and tactical components of the plan
  • Measure results, proactively report metrics, and compare actual results to goals, all with continuous improvement in mind

If your marketing team has a strategically-minded person at the helm, they can incorporate this process and achieve much better results. If you find yourself in need of a person like this, or you just need some help to take things to that next level, give us a call at 480-814-8838 or send us an email and we’ll be happy to speak with you about how to make your marketing activities churn-free.

Now go play in the surf. But be careful… those rocks can be slippery.

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May 8, 2009 at 8:47 am Leave a comment

Welcome, wilkommen, and bienvenue!

Greetings!

I’m David Ducic, and after 3 years of running my marketing consulting business through word-of-mouth I’ve decided to take it to the next level. New company name – Aximum Marketing. New website – coming soon. New ways of reaching out to clients – a great WordPress blog. However, some things will stay the same… my level of service, and my passion for everything marketing will never change!

Why create a new website now? Well, I recently saw a MarketingSherpa survey where 20% of companies plan to scale back on their full-time marketing staff, while 26% plan to explore the use of consultants to handle their marketing activities. In other words, companies will need to lay off internal employees to meet reduced headcount requirements, but still understand and recognize the importance of marketing towards their continued success. Here’s the graph… very interesting.

How companies will be spending their Marketing dollars in 2009

How companies will be spending their Marketing dollars in 2009

I’m currently getting all my ducks in a row… website (coming soon), branding, messaging, success stories, social networking, can spam compliant database, eMarketing campaign, business cards, and a million other things. Thankfully, I’ve done this many times before when working for other companies.

Stay tuned for more as I get this off the ground. I’m going to have an official launch soon, and an unofficial buildup to the launch to gain some momentum on Twitter, including some fun stuff like YouTube videos (I promise they’ll be entertaining… definitely worth your five minutes of attention). Look for the update tweets, and follow me, if you’d like.

If you have any comments or suggestions, I’d love to hear from you. Thanks!

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December 19, 2008 at 8:06 am Leave a comment


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