Out of the Box

Maintenance in Marketing

By Menachem Lubinsky on December 10 2007

Anyone who has ever been enrolled in a formal diet program to loose weight surely remembers entering the “maintenance” phase. This is where you have approximately reached your goal and the objective is to maintain the weight.

Marketing and branding experts also use the term maintenance but in this case it is to maintain a profile even while conventional wisdom would dictate staying low. When autoworkers went on strike in Detroit many years ago, the car manufacturers continued to advertise. They felt that taking a hiatus from their ongoing branding would ultimately set them back when things return to normal. True, they tweaked their message somewhat but the bottom line is that they never missed a beat in keeping their brand before the public. Some used the opportunity to impress consumers that they are not giving in to the demands of the strikers in order to keep prices at bay. This was a case of making lemonade from lemons.

A small mortgage company was feeling the effects of the deepening housing crisis. It had already laid off more than half of its staff and was also cutting back on its marketing budget. The weekly rate ads it ran in a variety of local papers were eliminated as was the sponsorship of several events that they would routinely support. The company’s competitors were also reeling from the housing slump but instead of retreating from their marketing programs refocused their ads to promote products that were more in tune with the times, like refinancing adjustable mortgages and going after people with less than stellar credit. In addition, there is also the thought that some transactions are still taking place so why not get a share of that business.

Advertising experts concur that in down times, as the mortgage industry finds itself nowadays, the worst thing that a business can do is go dark. They say that businesses that find themselves in a cyclical economy have to maintain their marketing programs for a variety of reasons. First, even in a down period there are still people that are doing business. Even today, people are still buying houses and financing their homes. Maintaining the marketing program assures that the mortgage company will get a share of the market. Second, even while some products may be out of sync with the current economic climate, other products are more apropos. The mortgage companies that refocused their ads to promote products that are more appropriate are a good example. Third, a business that has invested a great deal of capital into branding its name cannot suddenly fade. They need to continue to promote their identity to assure that when recovery does occur that they are ahead of the pack that return to the marketing fold. Consumers will more readily recognize those that have consistently been visible.

The owner of the mortgage company argued that he simply had to make the cuts lest he jeopardized his bottom line. He fully understood the consequences of trimming his marketing budget, but he also had to face the reality of paying his bills. The challenge for him was to maintain some form of profile until conditions improved.

Maintenance is important for any business experiencing a temporary downturn, particularly if it is die to external conditions, such as the economy, weather, war and the like. A plumbing supply store suddenly found itself in a downward spiral. Two of its largest customers had abandoned the company, one because of imminent bankruptcy and the other defected to a new smaller company that apparently offered him cheaper prices. Eddie, the senior partner, who had built the business on advertising, recognized that the worst thing that he could do is simply stop his advertising. Instead, he completely revamped his advertising program, placing smaller ads than he was used to and alternating in various publications rather than being in all of them as he was accustomed to do. A business consultant had advised him to make other cuts in the business without excising his advertising program altogether.

Frequently maintenance can mean retooling the marketing program. Eddie, for example, in addition to downsizing his advertising program made better use of direct mail and e-mails. His wife who previously worked part-time came in 2 additional days a week just to phone old customers. It also turned out that she was an additional pair of hands since he had let one of his clerical people go. He sent out cards on specials and offered discounts to repeat customers.

It is easy to see how a downturn in even one segment like housing can have an effect on the broader economy. The mortgage company used an advertising agency that had also served other real estate and mortgage companies. They recently laid off 40% of their workforce but like the mortgage companies are hoping that the action was temporary. The housing glut is having an effect on real estate brokers, insurance firms and title companies. Each one of these businesses will be on some maintenance until the bounce back occurs.

When a slowdown in a given business sector occurs, many entrepreneurs panic and the first sacrifice is marketing. It only digs a deeper hole for a company which depends on maintaining its profile and building its brand. Maintenance should be a real option during slow times and certainly beats retreating altogether.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.