The Word on the Street

I have enjoyed emailing and talking with a number of marketers over the last few weeks. The constant question that I am asked is, “what are you seeing out there with other associations?”

It is a smart question, because according to McKinsey and Company,” the broader forces at work in the global economy mean that the underlying economics of strategies could continue shifting with unprecedented speed and scale. Such extreme uncertainty demands constant attention.”[1]

So here is what I am hearing from you and your colleagues. Exhibits, sponsorship, and advertising are being hit hard with sales declines and cancellations. Interestingly, I have yet to speak to anyone who is having a downturn in their membership results or budgets from the last few months of turbulence. In fact, most groups are on or above budget for membership.

I have heard one thing that concerns me. It appears some organizations are stealing from Peter to pay Paul. In other words, they are cutting membership marketing budgets to compensate for losses in other areas. I understand the reality of budgets, but I continue to maintain that winning and keeping members during the tough times is a solid strategy.

Again from McKinsey and Company, “To weather the storm, it will be necessary to identify anew who and where the profitable customers are and to prioritize the most effective marketing and sales vehicles for reaching them.” Or in other words, do not take money from what is working.

Please feel free to share what you are experiencing.

[1] David Court, The downturn’s new rules for marketers: The old recession playbook won’t work this time around, The McKinsey Quarterly, DECEMBER 2008.


Scott Oser said...

Hi Tony,

Quick posting to let you know that what I am seeing on the advertising, exhibit and sponsorship side is not bad at all. I am seeing some dip in spending with my clients, some cutting back as compared to prior years and also some companies delaying their decisions longer than usual. Overall revenue levels in the categories mentioned above are pretty comparable to last year before we entered this economic downturn.

I attribute this to the fact that most of the sales we generate are based on relationships and not gimmicks. I firmly believe that organizations that develop relationships with their partners, and potential partners, are the ones that will come out on top in conditions like these.

Unfortunately I am not surprised to hear that some associations are cutting back on their marketing activities to save money. I agree with you that this is a horrible strategy in the long term and that now is the time to really promote so that when things turnaround your members that have had to disappear temporarily will still have you at the top of their minds and will come running back to you once things turn around. I know you posted a study a while ago that showed exactly that.


David M. Patt, CAE said...

Some companies that sponsor athletic events are cutting back on sponsorship. Maybe they should have done that earlier, but the current economy is what led them to do it now.

I wonder what they'll do, instead, for promotion.

Tony Rossell said...

Soctt -- Good feedback. I think sometimes budget cuts are made that are "easiest". I think we all agree that the economy will get better in the future. So cuts may be needed, but may be best made with a focus on future opportunity. Tony