When the going gets tough…

…the tough will get measuring. Following continuous economic growth over the last 16 years, it looks like we’re heading into recession. If it’s like the last recession we had in 1991/1992, then it could be tough. When it comes to marketing, there are probably two ways in which organisations and businesses might respond.

Some organisations will react by simply battening down the hatches and hoping to ride out the storm. Other organisations will reduce sales and marketing costs. After all, if you are selling less, you have to react accordingly to maintain profitability. However, these organisations will also look at how they can significantly increase the efficiency and effectiveness of their marketing expenditure and will work out what the important activities are and which tools they need to carry those out.

In a recessionary environment, it may be that the online channel is a winner. Organisations will look to see how they can acquire or service customers more cheaply through the digital channel than through other channels. Even with digital channels, though, I believe the marketing emphasis is going to shift and I have identified some possible trends.

As acquisition budgets come under pressure, digital marketers will need to focus on how they get more bang for their buck. Classic single channel techniques such as pay-per-click (PPC) bid optimisation will only succeed to a certain extent, as all organisations will be looking to improve channel productivity. Smart organisations will invest in the tools and analytics necessary to understand how to optimise budgets across digital acquisition channels including affiliates and PPC. They will ensure that they have sales attribution models that enable them to understand how channels work alongside each other (or not) and which channels are delivering value. Improved effectiveness will come from improved analytics.

Having persuaded someone to visit a website, the trick is to get them to do something of value. Conversion optimisation has come of age in the past couple of years but is still a nascent practice for many organisations. To leverage investments in acquisition, organisations will need to ensure that conversion rates increase. Site designs need to continue to improve and the customer experience must be enhanced. Optimisation techniques combined with user experience analysis provides the key.

The final trend will be the development of more robust and accountable retention marketing programmes. I often think of the digital world as a ‘world of ones’. Most people who visit a website only ever visit it once. A lot of them only ever look at one page or stay for one minute. If they convert, they only do that once. Most of the challenge in digital marketing seems to be to get people to do something twice. Visit twice; make the second click; place the second order – and so on.

The classic rule is that it’s far cheaper to retain a customer than to acquire a new one. In recessionary times it makes even more sense to focus on extracting further value from the investments already made in customer acquisition and conversion, rather than spending more on the same.

If there are stormy waters ahead what are you going to do? Batten down the hatches and hope for the best? Or invest in the right navigation equipment, learn how to use it and plot the smoothest possible course to keep ahead of the pack?