Slow economy presents opportunities
By John C. Peterson
Principal, The Peterson Group
The news we hear daily about consumer behavior reads like a bad novel but beneath the headlines are encouraging trends for local business and community based publications.
In June 2008, 86% of consumers told a survey that they are impacted by rising fuel prices. A similar number said they believe the country is in a recession and three in five Americans think the economy is in the worse shape they’re experienced in their life time.
Uncertain and concerned consumers are pulling back and changing their lifestyles and habits. Recent surveys indicate they go to fewer movies (47%), dine out less (45%), and are learning to be more frugal and wait for “deals.” Eighty-five percent say they usually or only buy clothing if it’s on sale. Decreasing overall spending is the top financial priority for a third of consumers. (Source: BigResearch.com).
It seems alarming news, but not all grim because the emerging consumer behavior is creating new opportunities for local businesses. People are traveling less, shopping closer to home and combining shopping trips.
Here’s the case for local business opportunities if you look at a recent survey by BigResearch.com:
55% are driving less.
48% are taking fewer shopping trips.
44% shopping closer to home.
42% are consolidating shopping trips
The statistics also underscore the case for local advertising, especially when you connect the finding from Vertis Research earlier this year that reported 83% of consumers are conducting research before they go to the store. It makes perfect sense. Money is tight, people are making choices and they need information to make better decisions.
Shouldn’t the best place to conduct local research be the local publications?
How does this translate into more advertising? Commerce has not stopped but the competition for available spending has greatly increased. Consumers are spending less and being more careful about what they do spend. People have not stopped living. They’re dining out far less, so would this not be a good time for your restaurants to communicate reasons dining with them?
Listen to what consumers are saying. Money is tight and they want information.
54% say they are more focused on needs versus wants and that sets up another case for advertising. Remember the basics, attention-interest-desire-action? Good advertising creates desire and stimulates activity. How else will businesses be telling their story, how will they be even be a choice for consumers when consumers have never been more finicky? With fuel over $4 per gallon people won’t be cruising for sandwich boards in front of stores.
These statistics show us another opportunity. People are driving less and combining shopping trips, so this would be a good time to promote some neighborhood advertising packages. That little strip mall or neighborhood center could now become a destination if merchants got together. More reasons to go there. Consider throwing in a free header if they sign a contract.
Publications need to communicate important information to their advertisers and prospects. Present the case for local advertising using consumer research available free through sites like BigResearch.com. It appears less like salesmanship and more like independent evidence. Use tools like Admall.com to quantify the value of your market and make presentations that differentiate you from the competition. Use your Circulation Verification Council (CVC) audit to prove how people use your publication. Reasonable people who want to help themselves will generally get it.
Step up and get organized. Don’t ask people to buy ads, show them programs that will grow business. Help them buy smart, go the extra mile.
Maybe it’s time to analyze buys. Since people are not driving as far it might be a good idea to trade marginal zones for size. Now you’re set up to take that larger size to more zones when things get better.
Most Main Street businesses know very little about marketing and advertising but most of them know a good thing if it’s presented right and makes sense. That was reinforced for me in two recent seminars I conducted for a client who sponsored them for his local business community. The 90 minute sessions focused on marketing, consumer behavior and what works in advertising. More than 120 people attended, about 100 of them non-advertisers, so it certainly answered my rhetoric question, “Does advertising work?”
This was the better time to educate them about what works and doesn’t work in advertising and not appear to be selling them something. This was the time to discuss the difference between “effective” circulation and remote circulation, not when you’re in danger of losing the business. Your credibility is much higher when you’re not defending yourself.
If you don’t educate your customers about best practices, who will?
In a relaxed economy where people are spending freely, some business got by no matter how poor their practices, but those days are waning. In a tough economy businesses will have to play by the rules if they want to survive. Power belongs to the consumer and the consumer is speaking loudly. They’re going local, they want deals, they want value and they want information.
Advertisers can’t drop in and out of the paper, they need to appreciate that advertising is a conversation with their customers and that consistency drives advertising success. Since we don’t know which week people might buy, they need to talk to people on a regular basis.
“When times are good you need to advertise, when times are bad you must.”
I wish I could credit the author but he or she is unknown.
There’s plenty of research to support the premise of aggressive advertising in a recession. In every depression since 1923, study after study clearly proves that businesses who maintained or increased their advertising during a recession emerged far stronger that those who cut back. One of the best studies was done by McGraw-Hill Research which analyzed 600 companies from 1980-1985. Sales of companies that were “Aggressive Recession Advertisers” rose 256% over those that didn't keep up their advertising, the study demonstrated.
Publishing companies would be wise to remember that lesson as they make their own economic decisions. Many publishers respond like they are putting their hand on a hot stove. Yes these are difficult times, but these are also times of great opportunity. There are plenty of options besides cutting and retreating, and the rewards could be many. If you can, it might be wise to think twice about margins, and look at some unique and one-time only opportunities to develop market share and customer loyalty.
Phil Meek, then president of the publishing division at Capital Cities/ABC gave me plenty to think about when I was a newly promoted publisher struggling with the recession of the late 1980s. After some pretty sharp revenue losses I was certain I would be an editor again.
“Don’t accept your market conditions, change them,” he said.
That wasn’t about cutting circulation or reducing staff or retreating. It was all about attitude and execution. We totally changed the way we thought about revenue, the way we sold, the way our customers could buy. We started new publications, identified new opportunities and pursued them with passion. We sold more advertising to fewer customers and powered our way through it to become a bigger, better and stronger company.
The world as we knew it in the good old days (a couple of years ago), has changed. Since it’s never coming back, it’s time to look for new markets and new opportunities. Small may be the new big and the best market might still be the one in your backyard.
John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.
By John C. Peterson
Principal, The Peterson Group
The news we hear daily about consumer behavior reads like a bad novel but beneath the headlines are encouraging trends for local business and community based publications.
In June 2008, 86% of consumers told a survey that they are impacted by rising fuel prices. A similar number said they believe the country is in a recession and three in five Americans think the economy is in the worse shape they’re experienced in their life time.
Uncertain and concerned consumers are pulling back and changing their lifestyles and habits. Recent surveys indicate they go to fewer movies (47%), dine out less (45%), and are learning to be more frugal and wait for “deals.” Eighty-five percent say they usually or only buy clothing if it’s on sale. Decreasing overall spending is the top financial priority for a third of consumers. (Source: BigResearch.com).
It seems alarming news, but not all grim because the emerging consumer behavior is creating new opportunities for local businesses. People are traveling less, shopping closer to home and combining shopping trips.
Here’s the case for local business opportunities if you look at a recent survey by BigResearch.com:
55% are driving less.
48% are taking fewer shopping trips.
44% shopping closer to home.
42% are consolidating shopping trips
The statistics also underscore the case for local advertising, especially when you connect the finding from Vertis Research earlier this year that reported 83% of consumers are conducting research before they go to the store. It makes perfect sense. Money is tight, people are making choices and they need information to make better decisions.
Shouldn’t the best place to conduct local research be the local publications?
How does this translate into more advertising? Commerce has not stopped but the competition for available spending has greatly increased. Consumers are spending less and being more careful about what they do spend. People have not stopped living. They’re dining out far less, so would this not be a good time for your restaurants to communicate reasons dining with them?
Listen to what consumers are saying. Money is tight and they want information.
54% say they are more focused on needs versus wants and that sets up another case for advertising. Remember the basics, attention-interest-desire-action? Good advertising creates desire and stimulates activity. How else will businesses be telling their story, how will they be even be a choice for consumers when consumers have never been more finicky? With fuel over $4 per gallon people won’t be cruising for sandwich boards in front of stores.
These statistics show us another opportunity. People are driving less and combining shopping trips, so this would be a good time to promote some neighborhood advertising packages. That little strip mall or neighborhood center could now become a destination if merchants got together. More reasons to go there. Consider throwing in a free header if they sign a contract.
Publications need to communicate important information to their advertisers and prospects. Present the case for local advertising using consumer research available free through sites like BigResearch.com. It appears less like salesmanship and more like independent evidence. Use tools like Admall.com to quantify the value of your market and make presentations that differentiate you from the competition. Use your Circulation Verification Council (CVC) audit to prove how people use your publication. Reasonable people who want to help themselves will generally get it.
Step up and get organized. Don’t ask people to buy ads, show them programs that will grow business. Help them buy smart, go the extra mile.
Maybe it’s time to analyze buys. Since people are not driving as far it might be a good idea to trade marginal zones for size. Now you’re set up to take that larger size to more zones when things get better.
Most Main Street businesses know very little about marketing and advertising but most of them know a good thing if it’s presented right and makes sense. That was reinforced for me in two recent seminars I conducted for a client who sponsored them for his local business community. The 90 minute sessions focused on marketing, consumer behavior and what works in advertising. More than 120 people attended, about 100 of them non-advertisers, so it certainly answered my rhetoric question, “Does advertising work?”
This was the better time to educate them about what works and doesn’t work in advertising and not appear to be selling them something. This was the time to discuss the difference between “effective” circulation and remote circulation, not when you’re in danger of losing the business. Your credibility is much higher when you’re not defending yourself.
If you don’t educate your customers about best practices, who will?
In a relaxed economy where people are spending freely, some business got by no matter how poor their practices, but those days are waning. In a tough economy businesses will have to play by the rules if they want to survive. Power belongs to the consumer and the consumer is speaking loudly. They’re going local, they want deals, they want value and they want information.
Advertisers can’t drop in and out of the paper, they need to appreciate that advertising is a conversation with their customers and that consistency drives advertising success. Since we don’t know which week people might buy, they need to talk to people on a regular basis.
“When times are good you need to advertise, when times are bad you must.”
I wish I could credit the author but he or she is unknown.
There’s plenty of research to support the premise of aggressive advertising in a recession. In every depression since 1923, study after study clearly proves that businesses who maintained or increased their advertising during a recession emerged far stronger that those who cut back. One of the best studies was done by McGraw-Hill Research which analyzed 600 companies from 1980-1985. Sales of companies that were “Aggressive Recession Advertisers” rose 256% over those that didn't keep up their advertising, the study demonstrated.
Publishing companies would be wise to remember that lesson as they make their own economic decisions. Many publishers respond like they are putting their hand on a hot stove. Yes these are difficult times, but these are also times of great opportunity. There are plenty of options besides cutting and retreating, and the rewards could be many. If you can, it might be wise to think twice about margins, and look at some unique and one-time only opportunities to develop market share and customer loyalty.
Phil Meek, then president of the publishing division at Capital Cities/ABC gave me plenty to think about when I was a newly promoted publisher struggling with the recession of the late 1980s. After some pretty sharp revenue losses I was certain I would be an editor again.
“Don’t accept your market conditions, change them,” he said.
That wasn’t about cutting circulation or reducing staff or retreating. It was all about attitude and execution. We totally changed the way we thought about revenue, the way we sold, the way our customers could buy. We started new publications, identified new opportunities and pursued them with passion. We sold more advertising to fewer customers and powered our way through it to become a bigger, better and stronger company.
The world as we knew it in the good old days (a couple of years ago), has changed. Since it’s never coming back, it’s time to look for new markets and new opportunities. Small may be the new big and the best market might still be the one in your backyard.
John Peterson was a reporter, editor, and publisher before becoming president of the New England Newspaper Group owned by Capital Cities/ABC. The $40 million unit had 75 daily and weekly newspapers and shoppers with 650,000 circulation in Connecticut, Massachusetts and Rhode Island. He has been a consultant since 1995. His website is johncpeterson.com and he can be reached at consultpub@aol.com or by calling 860-447-9198.
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