The economic downturn has initiated many shifts in the way in which companies market and sell their products; online advertising is now a integral part of any marketing mix, companies can no longer afford to ignore the so called ‘ Voucher Code Revolution’ and price comparison website have become a major contributing factor to a customer’ purchasing process.

One of the main casualties of these changes has been traditional media; radio advertising sales have reached an all time low and print media are struggling to fill slots that, historically, companies would enter a bidding war for.

But what about the concept of ‘The Brand’ has that suffered? In the current climate of voucher codes and discount shopping is it still worth company formation owners investing their already limited time and resource into developing their company’s brand?

Well, according to consumer behaviour strategist Kate Jones, it has never been more important. She comments;

“ While their has been a definite shift in consumer behaviour towards discount shopping and customers have obviously become more price conscious as a result of the economic climate, brands still have a place in contemporary marketing and advertising. As, while consumers have become more price conscious they have also become more quality aware. ”

“Developing a strong brand identity for your company allows you to differentiate your company from other recently formed companies; it also ensures that your company does not only have to compete on price. Taking the time to invest in developing the value of your brand helps you maximize the commercial potential of all your products.”

Since the collapse of the banking sector last year and the subsequent privatisation of a number of high street banks, much has been made of the importance establishing a good relationship between banks and enterprise.
According to a recent report, conduced by the Forum of Small Business and Enterprise, over forty per cent of small business and company formation owners are unhappy with their relationship with their business bank account manager. This may, in some part, account for the fact that the number of small business who have now chosen to conduct all their businesses banking online, has increased by almost fifty per cent since 2007.

The British Banking Association has said that they have noticed a broad consumer trend of businesses preferring to go online to deal with their business banking rather than picking up the phone to their bank manager or going into their nearest branch to discuss their company’s banking. We speak to Natasha Kilroe, managing director of jewellery chain ‘Moth’;

“The fact is that companies just don’t have the same relationship with their bank manager as they use to. When my father formed our company over thirteen years ago, he would have weekly calls and monthly meetings with his bank manager, to discuss cash flow and future financing opportunities. In the current economic climate that is simply no longer the case.”

“All our banking is conducted online and I have only been into our branch to open an account and make a complaint. I do feel like having a better relationship with my bank manager would be beneficial, but I just don’t think that banks have the resource needed to improve the situation.”

As the Internet Advertising Bureau announces figures indicating the increase of online media and a greater proportion of big brand’s advertising spend continues to go on digital marketing rather than traditional media, you would forgiven for think that advertising offline, especially via a print medium, is all but dead.

However, a recent report has revealed that many company formation owners still rely heavily on print media to build brand awareness and deliver targeted results. But why? We ask Patrick Fielding, CEO of marketing company ‘Direct Response’ why he thinks that print media should still play a vital role in any marketing campaign;

“Most people have grown up with online advertising. They expect to be served adverts directly on to their PC as the surf the web. However, from the feedback I have received from my client despite the fact that online spending continues to increase, its results are being compromised by the increase sophistication of the internet user; they no longer want their personal online experience to be compromised and subsequently marketers are having to become much more clever if they want to get their message across.”

“And that’s where print media comes in. The power of editorial is still as strong today as it ever has been. While circulation figures are down from previous months, I can never envision a time when print media won’t play a significant part in marketing spend.

It is a well documented fact that consumer behaviour has changed exponentially as a consequence of e-commerce. The internet has changed the way we interact with, buy from and ultimately communicate with brands. A recent survey conducted by Moneysavers.com, revealed that almost 83% of all consumers shop on an e-commerce site, at least one a week. Therefore can businesses really afford to ignore the power of online?
 
It seems not. According to the poll, customers are also less likely to make a purchase from a brand which does not have some form of online presence. Over a half said that they expected most brands to at least have a website , while over 50% of all those asked said that they would prefer to buy from a brand online.

Michael Arron, managing director of ‘Money Savers’, comments: “For most consumers, the internet is the first step of the purchasing process. They go online to research a product, compare the prices and ultimately purchase it. Buying online has become so much a part of our consumer culture that when a brand does not have a web presence many customers will be cautious from buying from them, as our research reveals.”

Christmas 2009 will go down in history as the year the small businesses sector realised they needed to get online. Consumer behaviour appeared to change forever as people preferred to go online to do their Christmas shopping. Consequently high street retailers struggled like never before, while their online counterparts enjoyed record sales. Something had to change and the government launched a scheme to help small businesses develop an online presence. However, getting a website is only the first step to realising your businesses potential online.

As with all marketing activity, your website must have a clear objective; do you plan to sell directly from it, do you want it to drive footfall offline or will it act merely as a brand platform? It is vital you define your objectives from the beginning, only then can you begin to measure its success.

One of the main reasons why online advertising has overtaken all forms of traditional advertising, from television and radio to print media, is due to the transparency it offers. The same applies if you are running your own website. You can track all activity on your website and –crucially – gain an understanding of your customers and the way they interact with your brand.

Matthew Wright, owner of jewellery business Smith & Sons comments; “Our business was badly hit by the recession and we knew we had to adopt our model. So we built a website and have been completely overwhelmed by the value it has added to our business.”

On a number of occasions on this blog, we have noted the importance of having an online presence for your company and as the government announces the launch of the Getting British Business Online initiative, it seems we are not alone.

Responding to changes in consumer behaviour is one of the most important aspects of running a successful business and as the online retail sector has grown exponentially over the last five years, online is no longer a sector small business can afford to ignore.

The GBBO campaign allows businesses to create a basic ‘DIY’ website for their company for free. While it has been criticised by some divisions of the web design sector, the feedback from most web businesses has been positive.

Richard Monks, founder and CEO of online marketing company ‘Think Talk Media’ comments:” From our perspective any initiative – government or otherwise – which encourages business to realise the potential of the web, is great. While there are some people within the industry that feel the scheme threatens their business, most business owners understand that there has always been free web platforms available and web design companies have continued to grow.”

Monks added “The GBBO scheme only opens the door for small business into the world of online. Once they have experienced first hand the massive benefits having a website has, they will be ready to venture further and that is when they will need the support of a professional online marketing agency.”

The online sector has dedicated a lot of time and resource into changing the perception of online marketing, however, according to a recent report conducted by the Office of Fair Trading over 35% of all people who shop online, have been contacted by so form of online scammer. Among those worst effected are people who have recently formed their own company.

Most of these scams are people or companies appearing to offer something free to an unsuspecting user and according to the trading watchdog the number of people who are falling for it is increasing.

Sophie Roberts, founder of consumer group ‘Watch IT’ comments; “The number of people complaining about having been a victim of such scams or having been approached by a company offering some form of scam has risen exponentially. The advise we give our users is to thoroughly research any company offering a something free or claiming you have won a prize. As a rule of thumb, if a deal sounds too good to be true, it usually is.”

According to the OFT, one of the most vulnerable groups are people are the unemployed and the elderly.

The fact that consumers buy from brands which they feel they have a relationship with is a well-documented marketing phenomena. However, ‘relationship marketing’ as the professionals call it, now seems to have made a very real impact on the trade sector according to a recent poll by the Enterprise Forum.

The poll found that over 80% of consumers would prefer to buy a service from someone they had a relationship with, even if it is a recently formed company. Over 42% of respondents felt that they tradesperson they had the best relationship with was their hairstylist, while an overwhelming 85% said that the tradesperson they felt they had the worst relationship with was their plumber.

Marketing consultant, Mark Jefferies, comments: ‘”The whole concept of branding is based on the assumption that consumers are more likely to buy from a company they have a relationship or affinity with. Obviously, the same theory applies to the service and trade sector.”

“The recession has had many negative impacts, namely the fact that consumers as a whole are a lot more cautious. Developing a relationship with your customer, not only secures a sale it also gives you unbeatable access to feedback about your service and how thing can be improved.”

So next time you are having your hair cut and your stylist asks if you are going away this year, stop and think how you can include this clever piece of relationship marketing into your next advertising strategy.

In the light of yesterday’s post, which explained how the government is looking to the SME sector for advice on what alternative finance options should be available to small businesses, it is interesting to note that the producers of hit series ‘Dragon’s Den’ have started looking for this year’s contestants.

The phenomenon that is Dragon’s Den is set to return to our screens later this year, for what will be its eighth series. The whole gang -including service industry expert Deborah Median, newly appointed ‘Big Issue UK’s Strategic Director James Caan and maverick entrepreneur Peter Jones -will all be back to judge the best and the worst of the UK’s entrepreneurs.

The production team expects this series to be the best yet, as small business owners, explain how they have survived the recession so far and why they now need more finance to build on what they have already achieved.

In the last series – in which budding entrepreneurs pitch their business ideas, products and inventions to a collection of five successful entrepreneurs in the hope of securing their expertise and financial input – over ten companies received a Dragon’s backing, while over fifteen of the entrepreneurs who pitched and did not recieve funding, went on to find an alternative route to market.

If you think you and your business idea are up to the challenge, check out the Dragon’s Den website to apply.

Historically most entrepreneurs have been advised to ‘start small’ once they have competed the company formation process and started running their business. Plans to export, market and sell their products abroad were thought to be best put off until the business had the time to grow logistically. However, as the UK’s exchange rate is now attractive to overseas markets many business owners are looking to use the internet to expand into international markets. We talk to one company formation owner who has done just that and ask the question, is the ‘grass indeed always greener?’
Mark Elder, owner of online fashion consortium, says that exporting his products abroad, has helped make his company recession proof.
 ‘When we formed our company, business in the UK couldn’t have been better; we were expanding rabidly and have established a brand that was recognizable on the high street. However, once the recession hit, it became more and more difficult – our market context became increasingly competitive and our margin were being squeezed by the increasing pressure of the internet and price cutting,  so we had to look into new options.’
‘ Initially we began selling more goods online and once we saw how profitable that could be I began to think seriously about a structured export strategy and, as a business, we have never looked back. I would advise any small business to look into exporting their products.”