Market Wise
May 26, 2009 - 12:17pm

Residential Lighting: Is a down economy a good time to invest in marketing and advertising programs?

Andy Mahler: Clearly, the lighting business is driven by real estate and new home building. But the requirement for marketing is great when times are tough. The inclination of most businesses is to pull in their horns on marketing and advertising at the most critical time when they need it. If you make that investment, which I know requires a giant leap of faith, you’ll be one of the few in your category that is aggressively marketing and you will build market share.

RL: Should we change our marketing strategies?

AM: You’ve got a limited amount of dollars. I would spend money on the Internet, looking specifically for portal-type sites that have a fair amount of traffic, and invest in search engines, both organic and paid. Nowadays, the ability to slice and dice data is dramatically higher than it has been in the past. Direct mail or co-marketing programs with other retailers can be lead generating, highly targeted and less expensive in terms of cost per inquiry and cost per sale than traditional marketing.

RL: What do you mean by organic and paid search engine marketing?

AM: Organic is making sure that your Web site is optimized. Google usually has two or three advertisers in a shaded area on top. Those people paid for that position. There are also a number of tiles on the right-hand side, and people paid for that position, too. But everything in the main field came up because content on those Web sites was relevant to the search entered, and that’s called organic search.

Frankly, we believe strongly that far too many people venture into paid search and could spend dramatically less money on the organic side. You should always target money toward optimizing the content of your site for search, and then supplement with paid search. A lot of people pay thousands of dollars every month in paid search, and the entire process for optimizing your site might cost $25,000 to $30,000. But, there is statistical evidence that shows people prefer to click on an organic search link before they click on a paid search link.

RL: Can you give us some specific marketing success stories?

AM: We have a client in the global hospitality market. They have taken the No. 1 share in the industry by a large margin primarily through database marketing, telemarketing and alternative marketing vehicles.

RL: Would this work for lighting showrooms?

AM: Yes to the idea that you should target key account customers—probably contractors and design firms—and that you should be able to target with a less-expensive, yet highly effective database marketing to consumers. The Internet is very important. There are lots of ways to do localized searches. But retailers are just not spending enough time with it. They’re still doing money mailers and local newspapers when people are spending much more time online.

Andy Mahler is founder and CEO of MarketSense, LLC, Burr Ridge, IL, a full-service advertising, web development, lead management and sales support firm. Named one of the top business-to-business agencies in the country by Crain’s BtoB magazine, the agency’s client list includes Aramark, Bosch Rexroth, Sealy and Stanley Tools.

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