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Study finds why some business grew in recession

SANTA ROSA – Marketing in a down economy can seem like a waste of money, particularly for a startup or a struggling business, but letting consumers know a business is still around may prove to be just the thing to keep it going.

In a study, McGraw-Hill Research’s Laboratory of Advertising Performance studied recessions in the United States.

Following the 1981-1982 recession, it analyzed the performance of some 600 industrial companies during that economic downturn. It found that “business-to-business firms that maintained or increased their marketing expenditures during the 1981-1982 recession averaged significantly higher sales growth both during the recession and for the following three years than those which eliminated or decreased marketing.”

The return on investment may not be obvious when money is tight, but keeping the public aware of a brand will give that company a leg up with the recession turns around.

[caption id="attachment_26220" align="alignright" width="288" caption="Dan Sartin and Chris Denny"][/caption]

“And it will turn around,” said Chris Denny, co-founder of the marketing firm The Engine is Red.

Mr. Denny and his partner Dan Sartin started the firm two years ago at a time when many businesses were thinking about everything but marketing.

They worked together as event and marketing directors with New Vintage Church in Santa Rosa prior to launching the company. They have clients locally and nationwide, and say the most important thing to do is figure out who you are talking to and what you want to say to them.

While market saturation is a time tested way of getting a brand out there, if a company does not have a targeted message, the effort will likely be lost.

Heather Pradini and Aly Anderson opened Notion:Creative this January.

They are a boutique firm specializing in food, wine and creative arts. They work with both startups and people looking to rebrand.

“We try to help people find their story,” said Ms. Anderson. “They come to us with a big idea and we work with them from there.”

Both Notion:Creative and The Engine is Red spend a significant amount of time researching both the companies they work for and the competition.

“Find out what your competitors are doing, and where they are failing, and try to fill the gap,” Mr. Denny said.

When it comes to media, knowing where your clients are will help choose where to advertize, but sometimes going out on a limb and trying to reach a new audience can be lucrative.

“Like going to a trade show that is not in your industry,” said Bryan Fikes, the managing partner and chief strategist of Zenergy Works, a search engine optimization company.

“You can learn from others whether they are in your industry or not,” he said.

He said that when he started his company with nothing more than a laptop and $250, one thing he did was a journal.

“I wrote down everything I did, how many hours I spent doing it and tried to calculate how much I got out of it,” he said. He always recommends to his clients the same thing.

Ms. Pradini and Ms. Anderson say they also use their firm as a starting ground when talking to clients.

“We like to look at our firm as a case study in how to make a successful business,” Ms. Pradini. “We know what worked and what didn’t and sharing that with our clients helps them.

They talk about what kind of media to use for different reasons, be it print, radio, Internet, social media and direct mail, but Ms. Pradini said that she looks at them with a similar goal.

“It is like the idea behind Facebook. The more people are reminded that you are there, the more they will think of you.”

And beyond the internet, the value of in-person networking remains vital.

“Join local business groups, go to conferences. Get to know the people in your community,” she said.

Jeff Barnell has been in the marketing world for years, working with clients on a freelance basis as well as in-house work with larger companies. He is currently with M.A. Silva Corks.

With freelance clients, he focused on faceted marketing and social networking.

“Social networking is one of the hottest topics in business today. Most everyone is familiar with Twitter, Facebook, LinkedIn, and weblog applications. Many of us have accounts, and tweet, paste, connect, or blog at least occasionally. Are these applications purely teenager entertainment or can they deliver real benefits to your business? When used to their potential, they can dramatically change the way you manage your brand, create demand, and service your customers,” he said.

He said social networking is fundamentally different from traditional marketing tools because “communication with your target audience is fueled by an existing relationship with members of the target group. Customers, friends, business partners and suppliers plus others make up this group. The starting point is often your email address book.”

Mr. Denny looks at social marketing from the perspective of a conversation.

He said it is important to know when applications like Twitter and Facebook will help a business grow, and when it is a waste of time.

“You are trying to create a conversation,” he said, “letting the consumer know who you are in a more intimate way.”