SMB Marketing Chat With Dave: Reaction to the Outbreak and Impact on Market Share
It’s amazing how much time has been slowing down, where a week feels like a month. Our last chat was just last week, and if you haven’t had a chance to watch it, you can check it out, too! You can watch the replay of our chat and get a summary of everything they talked about down below.
Watch the Replay
This week, we’re getting deeper into the business and economic parts of these things. The big premise for this is what we’re starting to see is some of the anxiety of the virus let up. We’re starting to see some of the concern about what’s going to happen over the next months let up.
It’s shifting from “do I have masks?” or “should I open or close my business?” to “how do we get things going again after it’s been shut down?” Businesses want to know what all this means, not from an organization standpoint, but a marketing standpoint, too.
We haven’t been shut down for just two weeks. We’ve been shut down long enough to operate in the new normal, and now that we have the new normal, it’s putting energy into getting everything back to how it was.
Marketers and Business Owners
For small to medium sized businesses (SMBs), the success of marketing and the success of the business itself are so closely tied together that we should talk about them together. This is especially true at this time. For a lot of businesses, running the business is auto-pilot, so a team, agency, or person is working independently of the business.
That’s not the case at this time. We are still very much in the mode of “how does my marketing affect my business, which affects my cash flow, which affects whether or not I can keep my employees or marketing.”
Diving Deeper Into Fear, Anxiety, and Panic
Everyone still feels fear and anxiety, but it shouldn’t lead to panic. The fear and anxiety that sharpens our senses and heightens how we react to things is what we want. What we don’t want is the reaction that causes us to run and hide in a corner.
How Can We Avoid Panic?
Wildly unthinking behavior usually ends in two forms:
- Pull the plug and turn everything off.
- Take wild shots in the dark by making dramatic shifts in your strategy.
Steph talked to other agency owners who work with different industries and what they were seeing, and there was absolutely a group of people who said, “Turn everything off.” Some businesses needed to have a freeze moment. Some businesses just needed to get their bearings.
We, at Oozle, have a lot of clients coming to us on the phone and saying, “I am committed to coming out of this. What do I need to do to make sure that happens?”
How Many People Are Changing Agencies Right Now?
For those who have been with an agency a year or more, and they want to start with someone else right now.
Something that Dave does on his side, is consulting with businesses on what to do to make sure they’re on the right marketing partner. It’s a scary time to be on someone’s onboarding process right now.
What we want to clarify is that it may be a scary time to shift to another agency, but it should only be scary if you jump to another agency that doesn’t specialize in your type of business. You should be able to rely on a marketing agency that does understand your industry and your business to best support you.
Pausing Was the Right Thing To Do
Really, the first thing businesses needed to do is the analogy of “putting your own oxygen mask first.” If you needed to first assess all of your expenses and then figure out what’s essential, that’s a good move.
But it’s still a good idea to do marketing right now.
The reason you need to be protecting some of your business right now is because we’re starting to see effects like:
- Downturns tighten lending
- Banks look out for themselves first
You need to make sure you have money if you’re going to grow.
The government is going to bail out your employees, payrolls, and rent. They aren’t going to bail out your marketing plan.
You have to be the one that is proactively doing something. So, if you take care of your employees, you have to figure out how to reallot money into your marketing. The government isn’t going to help build your marketing budget.
Only 3% of people trust marketers, so you’re not going to be bailed out for them, so you need to allot some of your budget for marketing.
Get the Money You Need
Dave fully understands that people don’t want to trust the government to keep their business afloat. But, there are resources available to help. Go to https://www.coronavirus.gov/smallbusiness. If they’re offering to give money back that you’ve been paying in taxes, you are getting your money back. Go get some of it back. Use that money to help your business.
Some lawmakers were lobbying to exclude for-profit education from money that was available in the CARES Act, and that was shut down. There is going to be emergency financial aid money that can be used. Some of the money has to be used for students, but it can also be used for what’s going to help them the most.
You have to look to the health of your business at the end of 2020 to see what your business is going to look like in 2021. If you’re planting seeds today, when are you going to reap the benefits of your harvest, and if you aren’t planting seeds, there’s nothing to harvest.
Take advantage of the programs out there and inform yourself on what’s available. The people who are not applying are the ones who are cutting themselves off from help.
Some people think it sounds “too good to be true.” And this is where the economics of business ownership explains the money.
This Is Not Altruistic
They’re not giving money to be a good person. What the government is doing is up the liquidity of the lending markets. What gets paused in the economy is the amount of time money changes hands between people.
Even when things get back to normal, people are going to be more hesitant to spend their money because they don’t know what will happen. The government is trying to jumpstart the economy.
The Fool in the Shower Effect
The fool in the shower effect is where everyone’s experienced this. So, if the water is too cold, you crank the water all the way up, then it gets too hot, so you have to crank it down to cold.
The government typically is not nimble enough to know how to buoy the economy. We see recessions all the time. They do have an effect on how quickly the economy heats back up or cools back down. Usually, it’s a little too much.
We will see the bottom of this recession, and we will start climbing back out of it. When we do see this happen, there will be a rush of demand that comes back in the market. You will start to see the stimulus that was used to stop the recession from happening will hit when we don’t need it, and there will be an excess in demand.
In the analogy of a race with turns and obstacles, the nimblest car wins, not the fastest, because they have momentum.
If you are smart about your money and how you handle your momentum, there is an opportunity to grow (not in revenue) in market share.
It’s going to take time for the economy to speed back up, and it’s going to put people out of business. When people do go out of business, it provides opportunity for your business.
When Business Is Good
When business is good and there are people buying, there will be businesses that don’t have set processes and less quality products. These businesses bite at the edges of the feeding frenzy and are taking a percentage of the market share for any good or service. It happens cyclically over and over again. We see these about every 10 years.
What you see happen, is that when the economy contracts, it cuts off the people who are least prepared for the new situation they are placed in.
That’s what we are about to head into.
They do not have to go out of business to cede the market share to you. Even if they don’t go out of business, if they are not equipped to take advantage of the marketing opportunities, you can still grow the marketing share even if people don’t go out of business.
This is the danger of someone who was on the top and getting complacent. That competitor who was always there and unable to get in top, now has a chance to get on top.
The people who are able to stay in business and do some business as usual and show up, they are going to grow in market share.
Think of it this way: You have 10 competitors bidding on your keywords. If five of them leave and they’re relatively even in distribution, 33% of the market share just goes to you by default.
PPC ads are “on sale.” That inventory has to be sold to someone. The ads are going to be sold to people who show up in the first place.
You Can Lose Revenue While Gaining Market Share
The revenue might go from 200K to 150K, so when the recession hits, you lose 50K in revenue. You can still gain market share. When that demand rushes back, if you can maintain that percentage of your market share, that 33% increase in market share is actually a 60% increase in revenue.
We Are Starting To See Demand Coming Back
We’re seeing more active searching, and more availability to reach people who are interested. This is different as compared to planting the seed and waiting for them to get back to us. At first, we wanted to jump to display ads and YouTube ads, but now we’re starting to go back to ads for search.
Demand Determines Budget
The demand should drive your budget. You should be talking to the people who are running your ads more regularly to see if you’re using your budget wisely.
If your budget is normally something like 20K for PPC ads and demand naturally goes down because people are panicked, and you don’t change that budget, it doesn’t necessarily hurt you. With demand-based marketing, you can only spend with what demand is available.
For people who left a good amount of padding, we weren’t able to spend the full budget, but they were there for the demand that was there.
Increased Market Share Lets You “Steal” Leads From Competitors
Maybe you weren’t getting as many leads, but you were still getting leads, as long as you left a good amount of your budget there.
The thing is, if you’re seeing a drop in demand, but you’re still in the market, then those leads are probably coming from people who would have found your competitor before. That’s how you’re eating into the market share. You are actually stealing leads and potential students from your competitors when you stay in.
Open up your budget to spend up to where the demand merits. For example, you can let your ads team spend up to $10,000 as long as the CPL stays under $100. But, if you spent $10,000 and have a much higher CPL, you still might not make money off it. Open up the budget, but set conditions to optimize your spending.
It’s a good bumper to make sure you aren’t spending money you aren’t getting a return on.
During a Time of Downward Demand, You’re Going To See People Offer the Same Thing Cheaper
Some people choose to undercut the quality of their own product to match competitors in price. However, that’s not necessarily the case. Some clients are doing it with distance learning, while some have shut down entirely. You have to make a decision based on your core values. Let them guide you through this stuff because if you start to undermine your core values now, you’re not going to get them back when the demand comes back.
When you’ve commoditized yourself, where you can’t charge the prices that you need to, you can’t make the same money to maintain yourself.
Good Marketing Is Still Good Marketing
During this time, you just have to follow good marketing. You have to ask yourself if you’re giving the right message to the right people at the right time. Your competitors don’t have to go out of business to not show up at the auction. If you can still keep talking and get the message right, then you set yourself up for success at the straightaway that’s coming.
You Don’t Have To Do It Alone
Draw on the experience of a good marketing company to help you through this time. Go find a partner to help you sort through everything. We have such a respect for business owners and school owners who are so passionate about the education and service they are providing to their students and customers.
If you want someone on your side, get in touch with Oozle Media today. We’d love to support you and your business. You can get started with a free analysis on us.