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Utilizing your marketing budget in a down economy

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(MoneyWatch) President Barack Obama got himself into a mess recently by saying at a press conference that "the private sector is doing fine." Negative reaction was intense, which is understandable during an election campaign. (To be fair, the president attempted to correct his earlier remarks by telling reporters in the Oval Office, "It is absolutely clear that the economy is not doing fine. That's the reason I had a press conference.")

While the economy is improving, it is still down. Way down. But sales people cannot use a down economy as an excuse for not bringing up revenues. Now is the time to make every marketing dollar count. With limited dollars to invest in marketing, how do you pull up revenues when the economic forecast is a downer? Before you prepare a new barrage of marketing messages, why not try listening to your customers first.

First listen to the voice of your customer. There is a huge disconnect between companies and customers. Marketing scholars have discovered that three out of four senior executives at corporations are out of touch because they have never talked directly to a customer. Other research revealed that 56 percent of companies thought they were customer-centric, while only 12 percent of their customers thought the companies focused on customers.

Feel their pain. In research dating back to the 1980s, psychologists and sociologists have repeatedly found that consumers are more motivated to avoid pain than to seek pleasure. What that means for your marketing is you should conduct market research to understand what worries, concerns and frustrates consumers around what you can solve. Focus your marketing on how your products and services can relieve the pains of your prospects.

Down with focus groups. Focus groups rank as the number one waste of marketing research dollars. Companies that spend $50,000 on focus groups could obtain the same customer issues for $5,000 or less if they conducted a series of in-depth, one-on-one interviews with customers.

If you don't ask, you don't get. If you want to know what customers think, go have structured conversations with them. Create an interview guide with specific questions you need answered and interview between 15 and 30. I can cite research dating over the past 20 years proving that 15 one-on-one interviews will generate as many customer pain points as seven focus groups with 10 to 12 participants each, and at a fraction of the cost.

Reach out and touch someone. One-on-one interviews can be conducted by telephone as well - something difficult to achieve with focus groups if customers are spread out in different time zones. The depth of information obtained for each topic is actually greater in one-on-ones as well, since the moderator or facilitator does not feel the pressure to cover every topic with each interview.

No company has unlimited budgets and staff. How does a company decide what to cut out of a sales and marketing budgets in a down economy? In most cases, the decisions are political, based upon what executive complains the loudest. Instead, use customer research to select the appropriate issues and what strategies would address the most pain points where you have the most to gain.