The Marketing Agency Talk

Like it or not, right or wrong, most clients will cut marketing and advertising budget when the economic outlook is bleak. The clients are not dumb; they knew they got to do some form of marketing and advertising to stay in the limelight for consumers not to forget them. However, they will dictate how much they are willing to spend and they will do their best to squeeze as much as possible from their ad agencies or design firms.

So how?

Renegotiate Pricing or Payment Term:

Talk to your current vendors and business associates to request price decreases or a more creative payment scheme. They might not like it but they will understand where you are coming from. Very likely, they are in the same boat as you.

Customer Loyalty Program:

Relationship between clients and agencies are important but if they find your price, they will have to go somewhere cheaper. They will look at you sheepishly and tell you they have “no choice”. If you like to keep your clients,consider creating a customer loyalty program. Write a letter to say you want to retain them as a customer and are now rewarding them with a % off for $x spent. This encourages them to stay with you. The cost of finding a new client is much higher than offer incentive/rebates/discount to keep them.

Competing by price is a no-win game. You cut your price but someone will cut his too. Better if you can offer better service, differentiate your offerings, offer better value and be really nice to them. Of course, you cannot forget to evaluate your client’s willingness to pay for a product or a service. If a majority of your clients’ budget cannot cover your cost, you will have to reevaluate your own business model and strategies

1. Company’s Position – What you want out of the current economic gloom: Ride through the storm? Take advantage of the storm and be stronger ? Take opportunity to strike at competitors? Be nice and be seen as a supportive vendor? .
2. Financial strength – How strong is your cash flow? Do you owe more or people owe you more?
3. Brand positioning – How does your client perceive you? Do they buy repeatedly without prompting? Is your product a must-have product among your niche?
4. Relationships with customers – Do you have a program that serve the customer before, during and after sales? Are they taken care off? Do they think they were taken care of?
5. Distribution leverage
6. Product category in terms of price elasticity
7. Cost cutting advantages available.

Time is hard. However, when we have the resilience to be creative and innovative and be supportive to our client, there will be a solution, somewhere, somehow.