Advertising in a recession
Is scaling back the best option? Sheree Martin of NCB explains By: Ryan Blake
The year 2009 is proving to be one of the most challenging in recent times for the Jamaican consumer. High interest rates, the devaluation of the dollar and unemployment are all familiar terms in the local vocabulary. With uncertainty looming in the atmosphere consumers have restricted their spending.
BUSINESS LOUNGE
Several department stores have advertised store wide sales in the press to attract shoppers, offering discounts up to seventy-percent. Even car dealers are offering special packages and discounts on selected models. A reputable dealer is offering a navigation and security package on some models purchased and delivered by the end of March. Although sales have fallen off in most sectors, the advertising campaigns have become more aggressive. Advertising during a recession isn’t such a bad idea. When advertising during a recession, two areas of growth should be taken into account; increased short and long term profits and increased market share. These theories support the fact that a recession rewards the aggressive advertiser and the timid one suffers. It is often said that when times are good you should advertise and when times are bad you must advertise.
THE APPROACH AT THE NATIONAL COMMERCIAL BANK “We regard marketing as an investment and while we have had to re-visit our budget like I’m sure many other companies have during these times, this has been done primarily with the intention of maximizing the return on every marketing dollar we have available;” explains Sheree Martin, Senior Assistant General Manager, Group Marketing and Communications Division at National Commercial Bank. “This means we are extracting more value from our expenditure on campaigns. We don’t think it prudent to cut back and we fully realize that since marketing is an investment, the activities we pursue today may not immediately result in increased income for our organization. What it will guarantee however, is that our brand remains top of mind and that our business continues to be positioned as an ideal financial solutions provider for individuals and businesses. For sustainability and continuity, this is the approach we believe works best.”
CHANGE IN THE ECONOMIC CLIMATE FORCING INNOVATION Mrs. Martin also states that the change in economic climate has forced them to place more emphasis on certain products. “We have intensified our focus on raising deposits and investments as well as encouraging persons to consolidate or re-structure their debts (loans and credit cards) in order to manage their finances better during difficult economic times. We believe the current recession presents an opportunity for customers to look at ways to improve their budgeting habits by putting savings/investment plans in place and Sheree Martin, Senior Assistant structuring their General Manager, Group Marketing and Communications borrowings so that National Commercial Bank they don’t feel unnecessarily burdened if their current income stream(s) are affected. STRATEGIES BEING USED AT NCB The way we have been going about this has been multifaceted. Direct marketing has increased significantly – we are marketing to our clients through seminars, expos, road shows, media interviews, in-branch promotions (staff T- shirts, banners and brochures), emailing, statement stuffers with discount coupons and through social networks such as Facebook. As far as we are aware, NCB is the only financial institution that currently advertises on Facebook. The response has been very positive, especially amongst our youth segment.” Therefore, information gathered has proven that advertisement during the recession is in fact the way to go in order to hold on to customers, increase market share and to ensure that the business keeps viable.
10 Smart Steps to: Get out of Debt
Provided by: Financially S.M.A.R.T. Services
Raise Your Financial IQ! -
MONEY $MART...
Question: I have two maxed-out credit cards and a payroll loan. I’m finding it hard to pay off the credit cards and service the loan, plus manage my other monthly expenses. What can I do to get out of this debt problem? Answer: Breaking free of debt is not impossible, but it will require a lot of discipline and determination. Your debt won’t disappear overnight – the process may take months or years. Here are your ‘down with debt’ steps:
The budget will help you to find more money for debt reduction.
7. Cut back spending. Use the budget to identify
non-essential spending such as entertainment and gifts that can be reduced. For example, you can temporarily suspend your cable TV subscription. Commit this extra money towards increasing the monthly payments on your debts.
1. Assess your debt. Find out your total balances,
the interest rates, and time left to repay the loans by checking your statements or calling your bank.
2. Track your debt. Go to www.financiallysmart-
online.com and download a debt tracker form on the financial tools page. This will calculate the total amount owed and the total monthly debt payment figure.
Liquidate assets. Have a garage sale, cash out 3. Consolidate the loans. Try to convert multiple 8. some accounts; look for any dormant assets that can debts into one lower-interest obligation. Ask your bank to assist you, or check with other lending institutions for better options.
4. Prioritise loans. If consolidation is not an option, use the debt tracker to rank the debts by loan balances. The lowest loan balance will rank #1, and you should focus on paying it off first.
provide extra funds to pay down your debts.
9. Earn more money: Speed up the debt reduc-
tion plan by thinking creatively of ways to earn more money. Retail phone cards, sell sandwiches or salads at work – think of quick turnover options that can bring in more income.
Break the debt cycle: Stop borrowing to fi5. Pay down debts: The debt reduction strategy in- 10. nance your lifestyle. Put aside your credit cards and volves actively finding extra money to pay down the #1 ranked debt first. Continue to pay the other debts on time, ensuring that you pay at least the minimum required on the credit cards. Once the #1 debt is paid off, take that monthly payment amount and apply it to pay down the #2 ranked debt. Continue this process until all the loans are paid.
6. Do a budget: Download a personal budget and
use it to record all your monthly expenses, including your loan payments, and all your sources of income.
resolve to only spend what you earn. ........................................................................... Financially S.M.A.R.T. Services is Jamaica’s number one source for practical, down-to-earth and independent answers for all questions relating to personal finance. Get more money smart advice at www. financiallysmartonline.com. Email advice@financiallysmartonline.com with comments or questions.
Optimizing your operation BY: CHERRYL HANSON SIMPSON
S AN ENTREPRENEUR’S LIFE
tarting a business can be a relatively simple process. A simple business idea or some marketable talent is usually all it takes to turn an entrepreneurial-minded person into the boss. However, when the initial excitement dies down, what can entrepreneurs do to achieve business growth? Creating a business system is crucial to the organized expansion of your enterprise. We recently looked at the systematic development of products or services to increase your value in the marketplace, and to focus on meeting the current needs of your customers. Today, let’s look at ways to systemize your operations.
Run your business like a franchise
If you’re currently the ‘head cook and bottlewasher’ in your enterprise, what would happen if you became too sick to work? This is the reality in many small businesses, where all the operating details reside in the owners’ heads. Michael Gerber, author of the business classic, The E-Myth, explains that the key to systemizing is to pretend that you are going to turn your business into a franchise and sell it to others. The idea is that you should document all the procedures for every task that you carry out. Prepare detailed manuals that explain how you purchase materials, record accounting transactions, hire staff, and market your products. Even if you never intend to sell your business, doing this process will help you to clarify the various steps that are involved in your operation, and reveal areas for improvement. In addition, someone else can come in and manage the business as it grows, as there are
clear rules of operation.
Keep tabs on technology
Another key element of optimizing your operations is to keep abreast of technological improvements that can improve your delivery. Many small businesses never shift into high gear because the owners failed to adjust procedures with changing times. One example of how technology can impact a product can be seen in the sign industry. Years ago, sign artists used manual means to create signs, which resulted in a relatively slow product delivery. Today, large format printers have revolutionized the business, allowing for expanded product offerings and faster turnover. Even if you don’t have a lot of working capital, free or low-cost opportunities for upgrading your operations are available online. In my business, spreading the ‘gospel’ about financial success is my main objective. Technology has allowed me to use the medium of the Internet in various ways to systemize my product and service delivery. Optimizing procedures can lead to reductions in operating costs and increases in personal free time available to the previously over-worked entrepreneur. Next we will consider the how systemising the marketing efforts can lead to explosive business growth.
.......................................................................... .. Cherryl is a financial consultant and coach, and founder of Financially S.M.A.R.T. Services. See more of her work at www.financiallysmartonline.com. Email Cherryl at advice@financiallysmartonline. com. Please add this address to your email address book in order to ensure you receive a response.
Credits Publisher eZines Limited Managing Director Tyrone Wilson Your Money Reporters Shari Lyew Kenarthur Alexander Mitchell Kimberly Taffe Columnist Cherryl Hanson Simpson Design and Layout Omar Phinn
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