Our guest authors list the various inexpensive yet effective ways to reach consumers when budgets are tight.
When confronted with an economic fallout, businesses are usually faced with the dilemma of whether or not to make marketing budget cuts. Currently, Indian startups are facing this exact dilemma with falling valuation and slowing down in venture capital funding. To conserve cash, spending big on marketing can seem counterintuitive. However, it isn’t always justified.
Studies consistently show that businesses that market themselves during rough patches are most likely to survive. Businesses need quick results to help them raise funds; immediate results are only possible if the brands are aggressively marketing themselves. So how does one do that with a constrained budget?
We believe now more than ever is the best time for businesses to switch to alternative ways to reach consumers that are more affordable but equally (or even more) impactful.
Marketing on a reduced budget:
As markets become more saturated, startups are looking at ways to strike a balance between making adequate expenditures yet not sacrificing the cash they need for other needs. This new development has put a lot of brands under distress, almost always resulting in the same question, “Does my brand really need an influencer/ celebrity endorser?’
The answer is a firm NO even if you are trying to cut costs and talk to millennial or GenZ consumers in the top-tier cities. Here is why: A brand's reliance on celebrities and influencers leads to them only interacting with a limited cluster of consumers.
Not to forget the massive fees most influencers and celebrities charge and the extra burden of coordinating large campaigns. Additionally, most influencers/celebrities are overexposed to endorsing multiple brands simultaneously thereby diminishing their novelty factor.
Finding better alternatives:
Co-branding is an effective way for brands to combine forces leading to increase brand visibility and profit while reducing individual costs and risks. These strategic partnerships are about sharing audiences and resources between two complementary brands to execute a campaign that mutually benefits both parties. Many companies use this marketing strategy to create better products and share target consumers. Such collaborations expose a brand to the already established customer base of the partner brands thereby reaching a larger audience in a trusted way with minimum cost.
About 54% of marketers say that referral programs have a lower cost-per-lead than other channels. Referrals are effective and they generate the highest ROI. This requires almost no financial investment and brings in valuable leads. A referral is when a customer refers the brand to one of their contacts, or to their friends and family. This is highly effective as the referral comes with a lot of trust and most of the people who are referred to the brand will be interested right off the bat. It is a highly untapped territory that many FMCG brands aren’t utilising to the fullest.
Word-of-Mouth (WoM) marketing through user-generated content (UGC) is an inexpensive marketing channel. What sometimes is also overlooked by marketers are Referral Marketing and Co-Branding Partnerships. These marketing channels target and rely entirely on the one resource that most brands already have in abundance – a large and dedicated user base across social media platforms.
Research has shown that 92% of online shoppers trust feedback on a product from friends and family over any marketing material produced by a brand. Word of mouth marketing occurs when a brand wows a customer to such an extent that they tell their peers about it on digital mediums. Brands can also encourage customers to publish positive testimonies through reward programmes as a way of showing their love and appreciation for their customers. By putting the brand’s satisfied customers in focus, a company has the opportunity to mobilize its consumer base and create active followers who will willingly share their content.
WoM marketing also creates a byproduct - user-generated content. UGC occurs when brand advocates generate original, brand-specific content and publish it on social media. In an age when the public craves authenticity and a personal connection with brands, UGC serves as an ideal solution. It has been seen as 35 per cent more memorable and 50 per cent more trustworthy than a brand’s own social media content. By showcasing their products in a real-life context, UGC allows companies to engage with their audience in a meaningful and reliable way – all free of cost.
For every problem there is a solution, it depends on whether you are looking at the problem or the solution. Regardless of whether a brand can leverage any of the above, it must have a solid online presence. It is free, to begin with, and brands can gradually build their own community through it. The trick is to craft content that is fun, creative, topical and has the potential to go viral. An excellent social media presence is cost-effective that can help expand brand visibility across audiences.
As the current economic situation is new to many marketers, it may be overwhelming for many. There are several tools in the market to help brands resolve advertising/marketing troubles. Brands need to understand that their customers are their best salespeople and their most underutilised asset.