Expert client relations strategy advice

BUSINESSES whose reaction to the economic downturn is to consolidate their client base, rather than seek to invigorate it, may wish to consider the daddy of all cautionary tales. It concerns the American soft drink brand Moxie, who gifted Coca Cola the chance of global domination in the 1930s depression.

Moxie had everything going for it in the pre-depression era - history, brand awareness and market share. At that time, Coca Cola was a distant second in the popularity stakes.

Moxie was founded in 1876 by Dr Augustin Thompson, a chancer who sold it from town to town, peddling it as an elixir to remedy "paralysis, softening of the brain, nervousness and insomnia". Complete bunkum, naturally.
Over the years Thompson ditched the medical pitch and took the sugary, fizzy route, trumpeting it as "a delicious drink to satisfy everyone's taste".

Moxiie had a 10-year head start on Coca Cola, and by the early part of the century it was being brilliantly merchandised using every promotional gimmick of the time, including endorsements from silent film stars such as Ed Wynn and George M. Cohan.

Moxie became strongly associated with amusement parks, dance halls and east coast resorts, and in the late 20s, the 'Moxieland' manufacturing facility was established, and successfully promoted as a tourist attraction (see image, right).
But then came the depression. Moxie executives felt that advertising in such a climate would be distasteful, and elected to increase spending on its sugar reserves, while cutting back on its popular advertising campaigns.

Coca Cola had no such qualms, and repositioned itself as the perfect Depression-era pick-me-up. The rest is history.
Today. Moxie still exists as a brand, but its popularity is confined to the Boston area, its spiritual home.

The moral? If you cease to seek new clients, you will find yourself losing market share to your more aggressive competitors - perhaps disastrously so. Don't do a Moxie.

MARKETING could not be more mission critical in a recession, so why is it that companies' marketing budget is often the first to be slashed in tough times? In a word, fear.

Fear that there's not enough "in the pot" to sustain the current marketing spend. Fear that employees' jobs may be endangered if marketing spends levels are sustained. Fear that marketing will make no difference because "customers and clients just don't spend in a recession".

Recession provides greater bang for marketing buck%u2028While this fear is not quite irrational, it is most certainly illogical, because the evidence shows when a company cuts its marketing spend in a downturn it cuts its chances of surviving, and of thriving once conditions ease.

Why? Because many of your competitors will view recession as the perfect opportunity to market aggressively, and so steal market share from rivals who are too lily livered to do the same. Cent for cent and penny for penny, marketing spends in a recession deliver a much higher return on investment.

Europe's largest budget airline Ryanair provides the template for how approach marketing when the proverbial hits the fan.

Ryanair saw 9/11 as an opportunity, not a threat%u2028Ryanair achieved its position of predominance thanks to the Twin Towers terrorist attacks. After 9/11 the airline industry's assumption was that customers would inevitably cut back on flights, and overall it decided to play things safe.

Yet while many airlines brought marketing spend to an abrupt halt following the 2001 attacks, Ryanair understood that by reducing marketing spend, a company risks being forgotten by its consumers and to cut it completely is to gamble with anonymity.

Unlike its rivals, Ryanair embarked on a vigorous marketing campaign, encouraging passengers back to air travel. The company's significant growth during this time proves that a bold marketing strategy can see you through tough times.
Learning hard recession marketing lessons.

As the Chartered Institute of Marketing warns in its white paper on recession marketing, 'Keep calm and carry on Marketing': The bottom line is that if you are not in the game, your competitors certainly will be, giving them an edge you don't want them to have."

GIVEN that it's far more expensive to find new clients than retain existing ones, marketing consultants are frequently astonished at how many companies take their clients for granted, or fail to maximize revenues from these key relationships.

One such consultant is Bruce W. Marcus, one of North America's leading law firm and professional services marketing specialists.

"Some firms have full-scale client retention programs, some simply have a philosophy about clients, but others don't seem to grasp the dynamic of client service," says Marcus, author of 15 books, including Competing for Clients and Client at the Core. He adds: "Ask your clients how many times they've been approached by your competitors, and pursued aggressively, and then ask yourself if you can continue to be sanguine about keeping your clients happy, on a day-by-day basis."

He urges providers of professional services to embrace the following if they are to enjoy high client retention rates:

Become immersed in a client's business and industry
It may help you seek new ways in which other of your services can help the client.

Frequent contact points, beyond engagement.
The client should know you exist between contracts, between matters, between consultations. You help both the client and yourself when you send a brochure on a subject of mutual interest, or a copy of a clipping in which you've been quoted.

Maintain personal relationships.
"Not just drinking and dining to keep the client happy," emphasizes Marcus, "but establishing and reinforcing a sense of mutual understanding and trust.

Quality control systems that are visible to clients
"You may have your internal quality control systems, but if the client doesn't know that, then the client has no reason to believe they exist," warns Marcus.

Regular client surveys
"Anybody who doesn't take active steps to keep aware of client attitudes toward the firm is somebody who likes surprises," says Marcus.

THE UK'S Chartered Institute of Marketing (CIM) is the world's largest organization for professional marketers. Its white paper, 'Keep calm and carry on Marketing', is the definitive guide to marketing in a recession.

Some say we're coming out of recession, some feel the worst is yet to come. What no one can dispute, however, is that conditions remain difficult for many business, in many sectors, in many countries. There were 2,428 insolvencies in the last quarter of 2008 in the UK alone.

It outlines six factors that businesses fighting recession ignore at their peril:

1. Clients don't stop buying in a recession
Clients and customers don't stop buying in a downturn - they just buy more safely. Those companies that maintain or increase marketing spend are able to focus on projecting the confidence and innovation necessary to provide buyers with the reassurance that they are making the right decision.

2. Communicate clearly in a downturn
It's vital to communicate effectively during a recession, else how will customers know what you can offer them?

3. Stop rivals from taking all your clients
Surviving recession means placing a stronger emphasis than ever on stopping your clients and customers moving to the competition, to achieve this, says the CIM, "you need to reassure them that you're on their side, and to differentiate yourself from the competition".

4. Adapt to client needs and customer needs
You must adapt to changing market and customer needs, urges the CIM, adding: "Indeed, if there's one thing that will separate the wheat from the chaff during this recession it is adaptability.

5. Discounting your way out of recession is folly
All-too-obvious alternatives to marketing can actually destroy your business, warns the CIM. "If for example you fall into heavy discounting as a short-term substitute for marketing, you may increase sales in the immediate future, but the long-term outcome will be a devaluing of your brand and lower profits."

6. Use the internet to escape recession
The internet can also widen the escape route out of recession, says the CIM: "One of the key differences for marketers between this recession and the last is the growth of the internet as a cost-effective, measurable platform to test rnessaging and gain consumer insight."

THE UK Chartered Institute of Marketing (CIM) is the world's largest organization for professional marketers. Its white paper, 'Keep calm and carry on Marketing', is the definitive guide to marketing in a recession.

The CIM suggests one way in which a responsible marketer might respond to the current economic and social climate is "to acknowledge the movement away from our 'throwaway' culture into an era of reusing rather than consuming".

It says the benefit of such a strategy is that it helps protect the environment and reduce carbon footprints - an issue that continues to rise up the agenda for many individuals and businesses.

The white paper also warns that businesses cutting back on marketing spends could be putting themselves at risk with their "steady as she goes" approach.

It cites the example of the UK building society, Nationwide, which is currently vigorously marketing the fact that it is seen as solid and dependable - a characteristic that previously may not have been deemed a marketable message to send.

The recession provides opportunities for businesses to grow your client base, the CIM writes, adding: "It's not always the stuff that's expensive that people ditch."