The travel industry has been hit hard by the economic crisis. Hotel occupancy is down, airlines are reporting a sharp decline in passenger traffic, and consumers are cutting back on discretionary spending.
The National Bureau of Economic Research recently announced what economists have been saying for some time: We're in a recession and have been since December 2007.
History has proven that the vast difference between the losers and the winners during a recession or depression is that the best-performing companies aggressively increase communications with customers and step up marketing and advertising efforts.
If your company fails to maintain consumer awareness during a recession, both current and future profits are in danger. Experts advise taking advantage of the current economic downturn as an opportunity to grow revenues, build brand awareness and grow market share.
The top 10 actions for marketing during a recession are:
1. You will survive or perish within your customer base. In uncertain times, when budgets are being scaled back, people buy from those they know. This means you've got to engage with your customers more frequently and deeply than ever before. Now is the time to mine your customer database. It's a good time to do a customer value segmentation analysis to determine which customers bring the most value to you.
2. Data is king. Make sure you have good, enriched customer data so you can segment by multiple criteria. The more targeted you get, the more effective your message and customer communications will be.
3. Build models and score your database. Embrace the power of analytics and customer segmentation. This can be a very effective exercise in determining which customers have the greatest propensities for certain behaviors.
4. Devise a strategy. Strategy is about sacrifice: If everything is a priority, then nothing is a priority. If you have no priorities established, you will sprinkle your marketing dollars all over and get no impact.
5. MROI is mandatory. Understand what channels and media are working best for your customers, and be sure you can quantify these in terms of a marketing return on investment, or MROI, analysis. The closed-loop channels of direct marketing (i.e., direct mail and digital) will serve you well in this regard. Remember: Inspect what you expect!
6. Measure everything. Know what works and what doesn't. Stop doing what doesn't work.
7. Don't pay more than you have to. If you can get the same response from a low-cost channel/creative as you've received from an expensive mailing piece, either don't spend those extra dollars or redeploy them to additional targets. More than 80% of consumers are researching travel online, and almost as many are purchasing there, so be sure you are doing everything possible to optimize your website and this channel.
8. Build a message that's appropriate. Are you appealing to someone's sense of luxury? Or to a sense of cost-consciousness? A tailored message is always appropriate, but especially so during a time when people are carefully choosing how to spend their dollars. Recent surveys show that traveling consumers are looking for value, and they will be doing more than their fair share of comparison shopping online. So, put your most attractive offers right up front without subjecting them to a litany of terms and conditions or disclaimers.
9. Don't forget the basics. Analytics, tailored messaging and good strategy are all important. But don't forget the basics of hygiene on your data. If your contact and address information isn't right, you'll waste money on three levels: 1) processing bad records; 2) mailing/emailing records that won't get there; and 3) missing the opportunity to contact "good" records.
10. Don't stop. Everybody wants to cut costs during recessionary times, and it makes sense to scale back somewhat. But don't stop altogether: Let your competitor stop, and when he does, that's when you should be eating his lunch. If you can continue marketing during the downturn, you'll emerge with greater market share and a happier customer base when the economy picks back up.
Bob Adams is a subject matter expert for travel and entertainment within Acxiom Corp.'s Information Products & Solutions group.