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5 Marketing Strategies to Get the Most Bang for Your Buck During a Recession

By Bigg Success Staff
05-30-08

Bigg Success in Business

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When times get tough, businesses often cut their marketing budgets. This may not be the best move you can make, but it may be necessary. If you need to cut back, there are ways to do it without destroying your future prospects.

Here are five ways to get the biggest bang for your buck during a recession.

Current customers

It’s much less expensive to market to your current customers than to find new ones. So share the savings with your customers! Find a way to save them money and they’ll be more likely to buy from you, even in tough times.

Contacts

Step up your networking efforts. The more people you meet, the more likely it is that you’ll find someone who needs what you sell. You may spend less money on marketing during a recession. Make up for that by investing more time in your marketing endeavors.

Referrals

The best way to get referrals is to ask for them! Ask your current customers for people they know who would benefit from what you offer. You may even offer an incentive to them for doing it. And don’t forget to work your contacts for referrals as well.

Customers like your customers

If you can identify people who share the characteristics of your current customers, you can target them efficiently. Check with your mailing service. They should be able to compare your customer base to their databases to find these prospects. This will also help you later with all your marketing efforts.

Counter-cyclical segments
Some products or services do better in a recession. Identify the areas of your business that are likely to gain more attention during tough times. Use those areas as a way to keep people buying from you and to gain new customers. Invest in what’s going to bring in dollars now.

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Hear today's lesson and laugh on The Bigg Success Show.

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fighter jets for the blog post about the OODA Loop concept

Get in the Loop to Gain a Competitive Advantage

fighter jets for the blog post about the OODA Loop concept

A military strategy that can help you get in the loop and give your business a competitive advantage.

We discuss how the OODA Loop on The BIGG Success Show. Here’s a summary…

Planning is certainly important to set your direction. Analysis is necessary, but a lot of people take it too far. At some point, you just have to do it.

United States Air Force Colonel John Boyd developed a concept for the military called OODA Loops. OODA is an acronym for Observe, Orient, Decide, Act.

It’s a useful concept in business as well. Boyd postulated that you gain an advantage if you work through this loop faster than others. This is particularly true in today’s highly competitive, rapidly changing business world.

Start by getting in the loop

Read more

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The Dogs of the Dow

By Bigg Success Staff
04-30-08

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betting 

Contrarian investors go against the grain. They invest in companies that are “out of favor” with other investors. These companies are often characterized by things such as a low price/earnings ratio or a high dividend yield.

Price/earnings ratio (P/E ratio) is the quotient of the stock price divided by the earnings per share. Sometimes referred to as the “earnings multiple”. For example, if a company’s stock is selling for $10, and its earnings are $1 a share, its P/E ratio is 10.

Dividend yield is the quotient of the annual dividend per share divided by the stock price. For example, if a company pays out a dividend of $1 a year, and its stock price is $20, its dividend yield is 5 percent.

If a company has a relatively high P/E ratio, it generally means that investors perceive something better in the future. For example, they may expect a relatively high rate of earnings growth. That’s why these investors are often referred to as “growth investors”.

Contrarians are often called “value investors”. They do the opposite of growth investors. They look for stocks with low P/E ratios. For any number of reasons, investors don’t have high expectations for these companies.

The dogs of the Dow

There are underdogs in every competition. In horse races, they are called “dogs” and people who mainly bet on “dogs” are called “dog players”.

That leads us to one way to make a contrarian play with stocks – the dogs of the Dow strategy. This strategy dates back to at least the early 1970s, but gained popularity in the early 1990s when Michael O’Higgins wrote Beating the Dow.

Dow refers to the 30 stocks that comprise the Dow Jones Industrial Average, the oldest and single most watched stock index in the world. To many people, “the Dow” and “the market” are synonyms.

The idea behind this strategy is to buy Dow stocks with the highest dividend yield. Those are considered the dogs of the Dow.

It’s a relatively easy strategy to implement:

  • Determine how much you want to invest in this strategy.
  • Divide that amount by 10. This will be the amount you invest in each stock.
  • After the final trading day of the year, select the ten Dow stocks with the highest dividend yield.
  • On the first trading day of the year, buy the ten dogs of the Dow stocks.
  • Repeat this process year after year. Something to note, though, is make sure you hold your winners for a year and a day so you can take advantage of the lower capital gains tax rate.

Like any stock market strategy, in some years you’ll win. In others, you will not. For example, this strategy seems to do particularly well when there is a flight to safety. You may find that being a dog player is a valuable part of your larger portfolio.

Hear today's lesson and laugh on The Bigg Success Show. 

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(Image by Will Palmer, CC 2.0)