According to a lot of experts, times are tough. Taking the pulse of a local market or two (or 200), you wouldn’t get much disagreement in stating that the economy isn’t exactly bullish right now.
That must mean it’s a great time to be selling broadcast television.
Let’s take a quick look at two types of local destination business owners circa 2009. It won’t take us very long to determine a good approach for your next sales call, should you happen to be sitting across the desk from one of them (and you should, as often as possible today). Both advertisers, by the way, are perfect candidates for broadcast and internet advertising.
The first type is looking to cut expenses. They need to keep the business running. They are also absolutely certain they are overspending somewhere and need to cut costs today. They’ll object to the media sales call on the simple premise that “this is not the time I need to think about adding expenditures.” What they might also be saying is this: “I’m cutting my advertising by 20%, so my 2009 plan needs to work 20% better.”
What if you presented a simple plan to get that accomplished? A homebuilder advertising in the “Sunday Times” might be paying 3-4 times per lead than they should be. Yes, they certainly are if we do the math. Could we show them a plan which, at the very least, maintains the total exposure of their campaign, and costs a fraction of their current ad budget? If so, you’ve just erased a big objection and helped them to cut costs.
The second and more viable type of business is that one that is smelling a huge opportunity. They are not as uncommon as you might think. Many fortunes have been made at the moment the economy was hibernating.
Here’s why: everything is on sale.
Think of the stock market for a second. Say what you will about prices hitting historical lows, stocks spiraling down the sink, and equities trading at small P/E multiples. The opportunist knows that she can scoop up a deal at or near the bottom of the market. It doesn’t matter if she times it perfectly, she knows how the market works and will reap the profit. Because nearly everything is on sale.
The same is true about market share when the economy goes soft for a quarter, or two, or three. The longer the economic contraction, the fewer voices are asking for the consumer’s business. If we started the recession with 10 viable furniture stores in a local market, over time, one or two of those stores may “decide” to go out of business. Others will decide to choose option one above, looking to micro-size their ad buy; some will cut their ad budget out of the equation all together.
That means we now have a fraction of the competition presenting a message in the market place today. Instead of 10 active “voices”, we might have the equivalent of five or six.
Meaning the ones that advertise in a recession are buying their market share at a discount. That same advertising dollar will acquire more share-of-voice today than it did at this time last year. This is a mathematical reality that the most successful businesses have exploited to fuel growth.
Sure, there aren’t as many customers buying a room-full of furniture today as there were a few years ago. But the pie shrinks and expands with every economic cycle. We create the opportunity for real growth and significant profitability when we help a business acquire share, regardless of the economic cycle.
When and to what degree the economy recovers is anybody’s guess. But the very simple reality exists that as a business owner, if I head into a recession with 10% market share and head out the other side with 15%, I have greatly increased my probability of success … and my multiplied my net profit too.
Broadcast television and the local internet answer the bell on both sides of the coin. Whether our next call is with the business owner in maintenance mode (“cut my budget but maintain my share of market!”) or the one in growth mode (“I want to buy share on the cheap”), no local media mix can deliver the buying efficiency of broadcast and the internet. It’s a mathematical lock.
In short, the well-equipped media salesperson never sees a bearish market as an excuse for current performance. They smell the opportunity.
Looks like we’ve got some work to do, thank goodness.
PS: Please keep in mind, this same approach works in good times too!
Dave Eckstein does not play shortstop and was never the MVP of the World Series. He is a partner in the firm ESA & Company, based in Red Bank, New Jersey.