In the column, “Online Marketers Can Weather the Financial Crisis,” I offered action items for dealing with the economic downturn.
My goal is never to be a doomsayer, but rather to be prepared for the reality of the market — good or bad. And that includes recommending common sense actions to shore you up and provide a bullet proof vest for more difficult times.
Reality is, when down times arrive, most companies first look to the marketing department to trim costs. This is not because marketing has the least value; it’s typically because marketers usually do a poor job of tying marketing to direct revenue. This is easily fixed.
Conversion rate optimization should be the last thing you should consider trimming. Here is why.
Shot Across the Bow
We are already beginning to see signs of the economy slowing, “The New York Times” reports on brick-and-mortar sales:
- Sales at Dillard’s dropped 12 percent, compared with a 7 percent decline last year. J. C. Penney’s same-store sales fell 12.4 percent, compared with a decline of 3.7 percent for the period a year ago. Sales at Kohl’s decreased 5.5 percent, compared with a 3.2 percent decrease last year. At Bon-Ton Stores, same-store sales decreased 4.6 percent, and they declined 3 percent at Target.
And, here is Heather Daugherty, research director at Hitwise, discussing the Web economy:
- At Hitwise, we have been tracking these various economic indicators very closely and are now seeing a similar trend in visitation to the websites of retailers, particularly during the past few weeks where the economy has become top-of-mind for the majority of Americans. Last week, traffic to a custom category of 500 retailers (excludes auctions, classifieds, DVD rentals, and book/music/DVD of the month clubs) declined 5% from the same week during the previous year.
The number above that is causing online marketers to lose sleep is the 5 percent decline in visits. For most of us, a decrease in traffic means an equal decrease in sales.
So what happened to this traffic? Did all of these retailers decide they needed less traffic? Did they stop buying ads? A few perhaps, but not all 500 retailers. This is direct result of consumer’s behaving differently due to economic concerns.
Could your company survive a steep decline in traffic? A 10 percent or 20 percent decline?
Take Control of What You Can
For starters, marketers must acknowledge they have far less control than they think. They must also get a firmer grasp on what they do actually control.
You do not have control of the economy. While you may have some influence on the search engines, they are not under your control either.
So now is a good time to get serious about what you do control: the customer experience. By optimizing the experience you reduce the risk of taking a steep incline.
If you need to understand the math or you are trying to get buy in from your organization have them read this column.
Tying Efficiencies to Dollars
Last but not least, you should not be using traffic or even conversion numbers exclusively. Everything you do should be tied to a dollar value. Not only will this show the value of your work, it could also help you sort out priorities.
What are you doing differently in light of the economy? Let me know.
Marketers need to know what’s in their data and trim out the filler to provide continuous, data-driven ROI for their brands.
A new starter in Team SaleCycle recently asked me the following question… “Wouldn't they just come back anyway?”
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