It’s one of those maxims often said but rarely actioned – don’t cut your marketing budget in a downturn.
Duane Moul, general manager of renovation specialists The ProGroup, has an addendum to that: don’t spend your marketing dollars in places which do not bring “quality inquiries”.
The ProGroup previously advertised heavily on TV before ditching those ads in favour of putting more effort and money into moving their digital marketing to multi-channel marketing agency Yellow in 2018. The move has been significant and successful, Moul says, and The ProGroup has now transferred the lion’s share of its marketing budget to Yellow.
“It’s true that you often see, in tough economic times, businesses take a decision to cut back on marketing spend first,” he says. “But The ProGroup is in a highly competitive commercial environment; we cannot afford to scale back that way.”
They were dissatisfied with their TV ads which were soaking up half their marketing budget; they liked the ads themselves but they weren’t bringing the desired results: “We just felt that TV wasn’t gaining the kind of quality inquiries we were looking for. It was okay from a brand awareness perspective but you couldn’t measure the results and it was very expensive.”
By quality inquiries, Moul means potential customers alighting on their website looking for quotes or advice from The ProGroup team. A successful franchising business, The ProGroup now consists of seven home renovation brands: GroutPro, Deck&FencePro, GaragePro, GrassPro, Prep&PaintPro, LouvreRoofPro and RainwaterPro.
“What we find now, after joining up with Yellow and shifting the budget previously used for TV there, is that we are getting far more quality inquiries. That’s because our digital ads are targeted at, and are reaching, certain demographic groups, income levels and customer profiles – and people who have searched for certain services or products.
“We can track them through the whole journey – and we can measure what we are doing with our marketing against actual results. More and more, we are finding that people are landing on our website and asking for quotes. They’re not just looking at the website and dropping off.”
Moul puts that down to Yellow’s expertise. They first worked with The ProGroup on their re-branding, bringing in branding experts and holding workshops with the owners and the franchisees. Then they conducted market research to discover what customers and potential customers thought of The ProGroup: “We got some fantastic data out of that,” he says.
After that came SEO work, paid search ads, programmatic ads and, just to keep their presence alive in visual media, YouTube. “Yellow were able to show us that YouTube was the most watched video channel in New Zealand, more than normal TV and more than streamed TV.
“We had all these ads created for our brand ads on TV – high quality and with paid actors – so we are now using them on YouTube.”
The ProGroup noticed a pick-up in business after Covid’s lockdown, with many people not travelling, instead sinking money into enhancing their properties. The recent floods and cyclones also produced some extra work, though Moul says the group’s business has developed to a point where steadiness has become a mainstay, rather than any fluctuating peaks or troughs.
That’s partly because, he says, they have not skimped on their marketing spend – a move applauded by Yellow’s Chief Experience and Revenue Officer, June Hartel : “These days, customers are more likely to shop around. The best thing a business can do during difficult economic times is to stay seen.
“Customers don’t stop spending entirely, they change the way they spend. By maintaining a marketing presence, businesses are in a prime position to attract or convert new customers as their competition dials back their presence,” she says.
“Taking the time to lay digital transformation foundations saves a lot more time down the track, and when our customers bring more digital into the mix, it can save money and allow faster growth.”
Hartel says The ProGroup’s results back up the key findings from Yellow’s Small Business Nation report – research which surveyed 1200 SMEs to gain insight into the minds of the 587,000 small-to-medium companies which make up 99 per cent of all New Zealand firms and 43 per cent of all employment.
The report found:
- SMEs have grown significantly more concerned about the New Zealand economy with 48 per cent believing it is going badly or very badly, an alarming jump from 25 per cent in 2021, when the last survey was held.
- In the current economic climate, SME main goals are ‘to get more customers’ (48 per cent), to ‘manage existing customers’ (41 per cent), and to ‘free up time’ (21 percent) – a mindset shift.
- The digital divide persists: 33 per cent of SMEs still have no online presence – so they will not be where their customers are searching online.
Hartel says: “A strong marketing mix is the key to achieving these goals. SMEs who invest a portion of their marketing budgets in digital (21-60 per cent) are more satisfied due to their businesses being front of mind and staying seen where their customers are looking.”
For more information on the report click here.