MARKETING REPORT: MARKETING POOLS
& SPAS IN A SLOW ECONOMY
"A man who
stops advertising to save money is like a man who stops
a clock to save time." - Henry Ford
We want to let all of you folks in on a little secret to making a
lot of money during this economic recession...
A very wise businessman once said;
"If you do not advertise, you'll surely fail in
business."
"If you do advertise, you may succeed."
"But if you advertise in the right places, you'll surely
succeed."
YOU CAN'T HAVE A RECESSION WITHOUT HAVING A
RECOVERY. Since they have been keeping records
about these things, there have been 31 recessions in the
U.S. so far. That means there have also been 31
recoveries from those recessions. The one thing
that is certain is that there will be a recovery from
this recession and many experts say that the recovery
from THIS recession has already begun to happen.
During this recessionary period, it is most critical
that you not only continue to advertise your business,
but that you actually increase your advertising budget.
These are the economic times where you can significantly
increase your market share if you take the bull by the
horns and get a jump on your competition.
We realize that many business owners are
worried and concerned as they see the economy get worse
and worse. We also realize that as you all make
the necessary cuts to your operating budgets, that it is
tempting to slash your advertising expenditures.
But history shows, time and time again, that cutting
advertising during economic slowdowns is VERY BAD for
the health of any business.
Sure, the unemployment numbers are
approaching 10%, but that still means that 90% of the
people are employed. Sure, mortgage defaults and
foreclosures are approaching 8% nationwide, but that
still means that 92% of the people are paying their
mortgages. Sure, the stock market is down, however
less than 20% of Americans even own stock (outside of
employer sponsored plans) - and even with those folks,
you only really "lose the money" when you go to sell the
stocks. Every economic expert agrees that the stock
market will, in fact, recover.
So let's face facts.....The fact is that hundreds of thousands
of pools and spas were sold in 2012 and will be sold in
2013. It is true
that there was a significant decline in the number of
pools & spas bought in 2012 due to the recession, but
we must stress the fact that HUNDREDS OF THOUSANDS were,
in fact, sold....and more will be sold in 2013.
"Who sold most of those?", you may
ask. Well they certainly were the companies that
advertised the most. Period, end of discussion.
THERE IS
A HUGE PENT UP DEMAND FOR POOL & SPA PRODUCTS WORLDWIDE.
"Pent up
demand" is an economic term that has not been used that
often in recent years, but we are now beginning to see
it work its way into the vocabulary of business and
commerce once again. Especially now that "the
recovery" has started...ending the longest and worst
economic recession since the Great Depression.
The basic
economics of "pent up demand theory" is that money is
currently being saved by the consumer in order to pay
down existing credit card or loan debt - or to counter
the risk of job loss, or to offset thoughts of an
uncertain future (i.e. save it for a rainy day
approach).
This money that is sitting on the sidelines will be
spent at some point. Necessary items like
replacing balding tires, fixing leaking roofs, replacing
old TV's and appliances, buying new clothes and other
numerous maintenance-type purchases are already seeing a
rebound.
These purchases account for the pent up demand curves
that have been forming that have different shapes
depending on the consumer's ability to postpone taking
care of the inevitable...what they would consider
"necessary purchases".
However at
some point during the economic recovery process, the
spending curves overlap and herdish spending begins
amongst the backdrop of stable energy prices, government
stimulus, new job creation and the inevitable
stabilizing of the real estate markets - normally
starting with the basic non-essentials (like a flat
screen TV, a camera, or a nice computer), and then
moving on to the larger consumer purchases such as
boats, RV's, hot tubs, swimming pools and their
associated commodities. This will happen.
There is no doubt. This cyclical economic trend
recently repeated itself during the recession of
1999-2001. In the pool & spa industry, 2001 was a
very bad year. But it rebounded tremendously in
2002 and grew at an exponential rate all the way until
2007.
After all, how long can you drive a clunker for
instance? How long can you go before you need a new pool
liner? How many thousands of people are sitting around
RIGHT NOW dreaming about getting a hot tub or a swimming
pool? The answer to that last question is hundreds of
thousands of people. Possibly millions of people.
Now is the time to start marketing to those people.
Now is NOT the time for "hunkering down". That may have
been OK in 2011 and 2012, but your company will not be
part of the pool & spa recovery by adopting that old
"hunkering" mentality. You must start to
aggressively promote your products and services...most
importantly on the internet. If you think that
internet advertising is not important for pool and spa
related companies, you are dead wrong.
CASE STUDY: MARKETING IN PAST
RECESSIONS
A well documented study of over 500 businesses looked at
sales vs. advertising expenditures during the economic
slowdowns of 1980-1982, 1991-1992, and 2000-2001. In the
year following those slowdowns, when the economy once
again improved, the companies who cut down their
marketing efforts during the slowdown only saw an
average growth of 19%. In sharp contrast, the firms who
increased their advertising spending during those
slowdown periods saw their sales jump an average of 275%
in the post-recessionary periods. In study after study
it has been determined that those who market
aggressively during recessionary periods out-perform
companies who did not by nearly 250%.
RECESSION OF 1970
American Business Press (ABP) and Meldrum & Fewsmith
study showed that "sales and profits can be maintained
and increased in recession years and [in the years]
immediately following by those who are willing to
maintain an aggressive marketing posture, while others
adopt the philosophy of cutting back on promotional
efforts when sales appear to be harder to get."*
RECESSION OF 1974-1975
ABP/Meldurm & Fewsmith 1979 study covering 1974-1975 and
its post-recession years found that "Companies which did
not cut marketing expenditures experienced higher sales
and net income during those two years and the two years
following than those companies which cut in either or
both recession years."*
RECESSION OF 1981-1982
McGraw-Hill Research's Laboratory of Advertising
Performance studied recessions in the United States.
Following the 1981-1982 recessions, it analyzed the
performance of some 600 industrial companies during that
economic downturn. It found that business firms that
maintained or increased their marketing expenditures
during the 1981-1982 recession averaged significantly
higher sales growth both during the recession and for
the following three years than those which eliminated or
decreased marketing".
Cahners and Strategic Planning Institute (SPI) produced
their report, "Media Advertising When Your Market Is In
a Recession." It disclosed, "During a recessionary
period, average businesses do experience a slightly
lower rate of return relative to normal times. However,
expansion times do not generate a higher level of
profits than normal periods as might be expected." This
phenomenon was explained by an analysis of changes in
market share.
"During recessionary periods," said the Cahners/SPI
report, "these businesses tended to gain a greater share
of market. The underlying reason is that competitors,
especially smaller marginal ones, are less willing or
able to defend against the aggressive firms." The study
then pointed out that businesses that increased media
advertising expenditures during the recessionary period
[saw their market share significantly increase.]"*
RECESSION OF 1990-1991
Management Review asked AMA member firms about spending
during the 1990-1991 recession. "Fortune follows the
brave," it announced, noting that the data showed that
most firms that raised their marketing budgets enjoyed
gains in market share. Among the magazine's sample, 15
percent reported "greatly decreased" ad budgets.
Advertising was "somewhat cut" by 29 percent. "The keys
to gaining market share in a recession," concluded
Management Review" seem to be spending money and adding
to staff. Firms that increased their budgets and took on
new people were twice as likely to pick up market
share.*
CASE STUDY: POOLANDSPA.COM'S ECOMMERCE
At Poolandspa.com, we saw our ecommerce sales increase
by over 45% in 2011. Why? Because we increased
our consumer direct advertising across the board. As
news of the bad economy got worse, we continued to
increase our advertising through email, postal mail,
magazines, internet ads, search engines and TV. We sent
out thousands of direct mail pieces and
millions of email newsletters as well as placed
magazine, internet and TV ad buys - all of which gave us
tens of millions of media impressions nationally.
"Did this cost us one cent?", you may
ask. Well it most certainly did not. In fact our sales
and profits soared, despite the recession, despite the
daily bad TV news and despite the slumping housing
market and stock market crash. Our entire advertising
program more than paid for itself many times over and
produced millions of dollars of product sales for us.
YOU CAN DO THIS TOO
There is really
no secret here. Just tried and true marketing principles
that will work for every company, every time.
Remember what the wise businessman
said:
"If you do not advertise, you'll surely fail in
business."
"If you do advertise, you may succeed."
"But if you advertise in the right places, you'll surely
succeed."
The Harvard Business Review says that
"Advertising is an anti-recession tool. The rationale
that a company can afford a cutback in advertising
because everybody else is cutting back [is wrong].
Rather than wait for business to return to normal, top
executives should cash in on the opportunity that the
rival companies are creating for them. The company
courageous enough to stay in the fight when everyone
else is playing safe can bring about a dramatic change
in market position." In addition, they say that
"Advertising should be regarded not as a drain on
profits but as a contributor to profits, not as an
unavoidable expense but as a means of achieving
objectives. Ad budgets should be related to the
company's goals instead of to last year's sales or to
next year's promises."*
MARKETING ON POOLANDSPA.COM
At Poolandspa.com, we can't solve all your marketing
issues, but we can certainly help you out.
Poolandspa.com continues to be the most visited web site
for pool & spa information and one of the most visited
web sites on the entire internet. We have thousands
of unique visitors per day, most of which either
have a pool or spa - or - are looking to purchase one.
Each week our site visitors are looking at pool and spa photos, watching pool
& spa videos, talking on our pool & spa forums
and doing research for the purchase of a pool or spa.
If you are in the pool or spa
business, or market to a high-end demographic, you
should definitely have some sort of advertising presence
on our web site. Hundreds of other successful companies
do. And we keep adding to our advertiser list each and
every day.
Why doesn't your company do the same
thing ? Do not sit back and DO NOTHING while the economy
is at a low point. This is the time you should be
increasing your marketing efforts across the board. If you think that your particular
company might be able to benefit with high-powered
direct to consumer target marketing, please take a look
at our various marketing programs. We have plans to fit
all budgets from $5.00 / month all the way up to $8000 /
month.
Here is a link to our advertising plans to take a look
for yourself:
//www.poolandspa.com/page5099.htm
We are currently running some Ad
Specials. Here
is the link to those special deals:
//www.poolandspa.com/page1988.htm
And even if you don't think
Poolandspa.com is right for your particular business
right now, AT LEAST ADVERTISE SOMEWHERE. If you are a
manufacturer marketing to the trade, try Pool & Spa
News, Aqua Magazine, Service Industry News, or Spa Retailer. If you market
direct to the consumer, try ads on our Poolandspa.com
web site or try Pool & Spa Living Magazine, The Home
Magazine, Pool Search
Magazine or Spa Search Magazine. The more that our
industry does consumer-direct advertising, the faster
that our industry will recover from this recession.
There is a HUGE pent-up demand for our products right
now, and we all have to get the word out that we are all
still here, still in business, and still ready to
provide America with pools and spas for years to come !
So hopefully we have gotten you fired
up to DO SOMETHING. Don't just sit there with a "woe is
me" attitude. These are the times that you must
aggressively carry out your business plan and get the
word out about your products or services.
Hopefully you will consider adding a
consumer-direct internet marketing plan with
Poolandspa.com as well. Feel free to contact us for more
information any time. We wish you all the best for the 2013
season !
Poolandspa.com Advertising Department
Phone 1-702-437-4343
Fax 702-568-0924
Email
ads@poolandspa.com
Advertising Rates & Media Kit:
//www.poolandspa.com/page151.htm
About the author:
Jeff Baxter has worked with Poolandspa.com for 16 years
and has been in the pool & spa industry for 25 years.
Jeff is considered to be one of the foremost experts in
online marketing, SEO and strategic business marketing
and planning. |