Federal research firm Input Inc. anticipates that the economic stimulus bill will generate $4.5 billion in new information technology spending from state and local governments in the U.S. This is good news for service providers who have been increasingly chasing those decreasing dollars.  

“We grew our business based on referral business from customers and business associates. We were going gangbusters. But now, a few years later, as we try and grow the company, the referrals aren’t keeping pace with our strategic goals.” 

This is a familiar story for growing small- and mid-sized businesses. It is especially familiar among business-to-government (B2G) companies. Does it have a ring of truth to you? If you fall into this camp, you may be among the many companies that have used referrals very successfully. You may have even been resistant to deploying marketing programs.

“We have grown and evolved a successful business without a concerted marketing engine,” you protest. “We’ve invested in sales, strategic alliances and relationships. We’ve developed repeat business in key government agencies or businesses and gotten significant referral business.”

This sound methodology has gotten you where you are today. No one can argue with the results of these business development strategies. But, consider this: Just because you didn’t need a coordinated marketing effort in the past doesn’t mean you don’t need it now.

Even companies with the best referrals eventually reach a point where they can’t continue to grow the company strategically. What now? This is where targeted strategic marketing comes into play. If your organization has reached this point, ask yourself what marketing programs you should be leveraging to raise your profile with your target audience.

Or, if you think you could be getting more referrals from trusted customers and partners, read:

Increase quality referrals

3 ways to get qualified referrals

3 more ways to get quality referrals

When costs are cut, executives look for ways to streamline marketing costs. If you’re reading this blog, we probably don’t need to state the case to you that webinars, or web seminars, are less expensive than events. The latter includes hotel rental, food and beverage, AV, etc. etc. And certainly, webinars are far less costly than a multi-city road show. 

Nielsen Online reports a 16 percent year-over-year increase in unique visitors to the top 10 newspaper web sites. This represents 40.1 million unique visitors in December 2008, up from 34.6 million in December 2007.

To top online newspaper site was NYTimes.com, with 18.2 million unique visitors. USATODAY.com and washingtonpost.com took the second and third spots. See the table below for more.

Here are the top ten finishers, courtesy of Nielson Online:                        

                                               Dec-08 UA   % Change

Top 10 Online Newspapers     40,093            16

 1. NYTimes.com                       18,187             6

 2. USATODAY.com               11,420           15

 3. washingtonpost.com              9,470           12

 4. LA Times                               7,963           73

 5. Wall Street Journal Online     7,235          34

 6. Daily News Online Edition    5,883          99

 7. Chicago Tribune                    5,235           35

 8. New York Post                      4,557           60

 9. Boston.com                           4,086            -6

10. SFGate.com                          3,503           26

Of the top 10 online newspapers, nine experienced positive year-over-year growth. No small contribution to this jump was the weakening economy, election cycle and new administration.

We’re all getting ready to close the book on 2008 and many of us are looking optimistically to 2009. At least I hope you’re putting your game face on getting ready to take on the world.

Q2 is looking back affectionately on a terrific 2008. If you had any part to play in helping us achieve this milestone year, our most sincere thank you! We provided web strategy and development, public relations, advertising, tradeshow strategy and support, collateral development, strategic messaging, branding and more to many new and returning clients. We’ve proudly gained a record number of new clients and, even more proudly, continue to serve the needs of many returning software and services businesses. 

Below are some observations and trends from 2008 that we hope will help you get a jumpstart on a successful new year. These range from analyst findings to our feet-on-the street observations.

Federal sector stays strong

Many of Q2’s clients, friends and business associates provide services to the federal government. If these individuals are fearful of a slumping economy or a change in administration, they aren’t letting on. These tend to be a tough and resilient group of people anyway, determined to be successful no matter what.

Still gold in the IT hills

The tech industry will still grow, with the exception of hardware, according to the latest from Forrester.

Good business principles still in style

Companies with business models that were not entirely viable before the economic slowdown are struggling with traction, funding, etc. Many companies with great ideas, service, delivery, savvy and sound principles are well positioned to win. An oversimplification perhaps, but sometimes life is simple.

Many business owners and marketing executives are wisely looking for a flat 2009 versus focusing on growing the business. However, we talk with companies, many selling to the public sector that are hiring and growing. There are healthy organizations out there.

D.C. Tech sector strong

The Washington, D.C. area is still a burgeoning region in the tech sector, just ask the Inc. 500.

SEM and direct marketing are the spending trend winners

Direct marketing spending predictions are hot.

Search marketing is already a proven winner. Chances are it’s usurped some of your marketing budget.  

So what can I do?

Here is some of Q2 Marketing’s uncommon sense wisdom for a down economy. It’s timeless.

Come back frequently for our tech marketing New Year’s resolutions and more practical insight.

Forrester Research has released the US IT Market Outlook: Q4 2008. They remain optimistic–or at least not pessimistic–in foreseeing the near future. Forrester doesn’t see the 15% to 20% decline from the 2001 to 2002 tech downturn.

Forrester believes the recession will last into mid-2009 and anticipates declines in real GDP of up to 3.6% per quarter. So purchases of IT goods and services from US business and government will drop from 4.1% growth in 2008 to 1.6% in 2009.

Some other key findings related to industry growth:

• Data from Q3 2008 indicated US revenues of large vendors down by 2%.
• Continued declines are anticipated for computer equipment purchases in Q4 2008 and the first half of 2009.
• Little or no growth is anticipated in communications equipment and IT services.
• Software growth will slow to as little as 2% in coming quarters.

Table of contents:

The US Recession Is A Reality, With Tech Purchases Slowing Sharply

The Causes Of The Recession And Recovery, With Industry Winners And Losers

Q3 2008 IT Purchases Data Shows Tech Winners And Losers So Far

Recommendations:

Recession Is Here, Don’t Panic; Except Hardware, Growth Will Slow, Not End

As reported in btobonline, a number of companies are increasing marketing budgets during these challenging times.

Btobonline sites the recent Association of National Advertisers (ANA) findings. ANA polled more than 1,200 advertisers and agency executives at their recent annual conference. A full 27 percent said they were increasing their budgets in response to the downturn.

Additionally, nearly 40 percent said they plan to increase marketing budgets in 2009, with 26 percent planning increases greater than 10 percent, and 13 percent planning increases between 1 percent and 10 percent.

These findings aren’t necessarily consistent with those being reported elsewhere, but marketing dollars are still flowing for some organizations. I hope yours is one of them.

A SEMPO’s survey recently illustrated by Advertising Age in their Search Marketing Fact Pack 2008, demonstrates that print isn’t the only victim of increased search engine marketing (SEM) spending. They asked, “From which marketing/IT programs are you shifting budget away and moving it to your search marketing programs?”

The top casualty was print magazine advertising, up from 20% in 2006 to 32% in this 07-08 survey.

Cuts to web site development spending followed from 22%, representing a 7% jump over 2006.

Direct mail is to be shifted by 17%. This is fairly consistent with 2006’s 16%.

Web display ads and print newspaper ads came in at 15% respectively. Next was TV advertising at 13% and conferences at 11%.

Of note is that public relations will be cut by only 5% of respondents in favor of SEM. I’m willing to bet that some of these marketers realize the value of PR in their web optimization and search strategy.

[Tech Marketing Feature] It’s taking longer to close sales than it did this time last year, or even earlier this year. Many companies are making decisions more slowly. There’s a good chance your company is among the slower movers. When possible, companies are purchasing more incrementally, putting a toe in the water to purchase only what they believe they need. Buyers are decidedly risk averse. We know the economy is to blame, but it’s time to be proactive. What do we do about it?

The good news is that opportunities still exist. But while it’s taking longer to move prospects through the funnel, marketers need to put programs in place to impact these lengthening sales cycles—today. Here’s how:

1. Continue your direct marketing programs. Now more than ever, you need to communicate consistently with your buyers and prospective buyers. Resist the knee-jerk tendency to cut this aspect of your marketing budget. Your clients need to keep hearing from you. They need to know that you’re solving problems for companies like there’s. They need to be able to trust you with their money and time. And they need to know that you’re a source of stability, not risk. Well executed ongoing direct marketing programs can help you accomplish this. If you make the mistake of going silent, your buyers will go to a competitor that’s still making noise.  

2. Maintain and boost credibility. Help prospects and existing clients feel good about purchasing from your organization with a credibility, or public relations program. Credibility can appear in various manifestations from bylined articles and blogs to coverage in trade and news press. Awards for financial excellence or leadership can also be important. Make sure you leverage this credibility and your prospects and customers are aware of it. Ask yourself what mediums your organization and key players should be featured in to impact your buying base. Then map out a strategy to do it. Tie your credibility programs in with your direct marketing program for maximum synergy.

This is no small undertaking. If you are serious—and smart—about public relations, it can yield very big returns. PR takes time, strategy and talent. Expect PR budgets to be cut. This is a good thing for those of us who continue to diligently make an impact with credibility programs.

3. Lead with cost savings. There is no better time to lead with ROI and cost savings than when spending tightens among your buyers. If this benefit applies to your offerings, are you leading with it? If not, buyers will pick competing products or services with marketing messages that clearly offer a tangible return on investment. Of course, this won’t apply to all products and services, but to the extent you can save money and time, make that message clear.

4. Let your clients talk for you. Another way to overcome your audience’s potential fears of risk is to leverage your client base and let them do the talking for you. Peers can communicate your value proposition much more effectively and meaningfully than you can. Use testimonials from your biggest fans and make sure they are featured prominently in your marketing materials and mediums. Video testimonials are even better. There are many clever ways of making these testimonials work, from having them on your home page or blog, to linking from YouTube.  

5. Don’t be a loser. Everywhere I go I talk with executives who have had to lay off employees, talented professionals who’ve gotten the axe, and sales and marketing experts who are feeling the pinch. But generally, there are two responses. There’s pity and foreboding in one corner. Then there’s optimism, will and drive in the other. As a marketer for your business, keep those stark contrasts in mind and always remember that people want to surround themselves with winners, trust winners and give their business to winners. In all of your marketing activities, create programs worthy of a winning company, and harness the attitude of a winner.

6. Get with the strategy. What do you want to communicate about your company, products, etc? Is it your ubiquitous market penetration, dominance in an industry, product innovation, new line of business? If you’re going to be true to your goal of moving prospects through the pipeline, you need to be strategic in what you’re telling your audiences and why. Make all the programs you’re putting in place hit hard on that theme, and do it consistently, creatively and in a way they will remember.

Keep this strategy in mind and lead with messages that matter, consistently, and in meaningful ways. And watch those slow movers pick up the pace and decide to give you their business. Just remember to track the programs you put in place and the status of that pipeline so you’ll be able to demonstrate that those cycles shortened because of your marketing insight.

One more note from today’s Washington Technology newsletter. The same slowing trend is occurring with mergers and acquisitions. Read more here: http://www.washingtontechnology.com/print/23_16/33816-1.html.