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Russ: This is the BusinessMakers Show, heard here and online at thebusinessmakers.com. And now it's time for the Aflac BusinessMakers Flashback, brought to you by Aflac. Ask about it at work. And earlier this week, I visited the headquarters of Pierpont Communications, one of the largest communications firms in the southwest, and I got to spend time with Phil Morabito, their founder and CEO and former guest on The BusinessMakers Show. And our discussion centered almost exclusively around the present recessionary times, and how do you market in these times? Let's join the conversation.
Phil: Successful entrepreneurs are really made right now. It's easy to be successful as an entrepreneur when the economy is good and things are going your way and business is booming. It's really challenging and tough now, and the truly successful entrepreneurs know what to do and how to do it with their marketing strategy in this type of an environment.
Russ: Okay. Well, if you're getting pressure on the whole expense side of the formula, do successful entrepreneurs-are they the ones that most aggressively cut marketing costs?
Phil: Au contraire, Pierre. The smart ones know that now is the time to spend your dollars. I tell people, a dollar spent today in marketing is really worth $3 and here's why. It's because your competitors have disappeared. Many, many people put their heads in a foxhole during downturns. They choose to be invisible rather than visible. And you will benefit greatly if you take the entirely opposite approach. Spending money today in marketing is going to get you a much, much greater return; but more importantly, it's going to position you for a leadership role as the economy turns. And it just makes sense. Statistics have shown that people that have marketed hard during downturns end up reaping the benefits dramatically when the economy comes back because they're at the top of everyone's mind.
Russ: Okay. Well, I know that you've had a string of major successful years for quite some time. Have you sort of championed this cause in prior recessions?
Phil: Yes, I did after the 911 scenario and found that our business ended up growing so substantially when the economy started to come back in '05 and '06 and '07 that we ended up being on the Inc. 5000, and we were one of the 5000 fastest growing private companies two years in a row, and this is after being in business for 20 years and a service business which is very difficult to have those kind of strong, strong growths.
Russ: So you're saying that Pierpont Communications had this strategy of not sticking your head in the sand in the tough time, and it benefited your company very well.
Phil: Tremendously. We were very good at answering the phone because people called. They knew us. They knew what we did. They knew our strengths. They knew our skills and abilities in the marketplace. Now they might not have been ready to pull the trigger when things were down, but when the glimmer of hope started to come around, people wanted to hire us.
Russ: Okay. But for your clients, I supposed in that same time period, you might have had difficulty encouraging them to follow that same path.
Phil: Exactly. It's very difficult, and this time around I'm on a real crusade to inform people firsthand and with direct statistical valid information that business does better when it markets during the tough times. Your money goes father, you get a greater return on your investment, and when you make the right choices, you will benefit greatly when things come back.
Russ: Okay. So when you say your money goes farther, that almost implies that in this kind of market condition that it's more of a buyer's market for advertising and getting your message out there.
Phil: An excellent point. Everything is negotiable now. You're able to get more for your sponsorships. You can negotiate some advertising rates with certain types of organizations. The list goes on and on. People are open to doing business with you in the marketing arena, so you're able to get more for less.
Russ: Okay. Let's say that you're a VP of Marketing of a relatively small company, and your sitting listening to this, and you're buying everything that Phil Morabito is saying, but your board of directors or your CEO are saying, "I don't care. You got to spend 50 percent less in these times. Go make it happen." How do you decide where to cut in that kind of environment?
Phil: You have to gravitate towards what I call "reach out and touch activities." These are activities that allow you to physically get out into the marketplace and get close to your potential customers. And there's a whole series of activities that you can do that allow you to reach out and touch people. Certainly networking; and people say that they network, but do they network with a strategy? Over here at Pierpont, we call it "power mapping". We help people decide exactly what organizations and groups are going to have the greatest impact on their organization, and how can they get involved and get active and literally reach out and touch and meet and greet people in the marketplace?
Russ: Okay. And so that's sort of an example of something that doesn't necessarily cost hard dollars other than extra exerted effort to get person-to-person communications going. This is the time to do that.
Phil: Exactly. And the problem that people have is that they'll go to one networking event, and then they'll skip the next month, or they'll have sporadic attendance, so they won't develop a presence or awareness. And sometimes they think that the networking doesn't work when in fact it does, but you just have to stay with it.
Russ: It seems like in this kind of economy there is more risk that you get a client really doing something with you and boom, suddenly they vanish from the face of the earth because there is a higher bankruptcy and failure rate going on right now. Is there any way that you've historically tried to avoid that problem?
Phil: Yeah. I think that we're always keeping things in the pipeline. A big mistake that entrepreneurs make is they get focused too much on the business that's about ready to come into the door and not the business that might come in the door 3 months from now. So it's very important to do these kinds of activities so you're seeding the pipeline, so that you do know where your next piece of business is going to come from. And I call it "the bucket theory," where you put things into different progressive buckets and stages of activity so that you know when a customer is going to eventually come in the door, you'll have a chance to bring that customer in.
Russ: The bottom line-what I'm hearing from you, Phil, is it's almost like you turn up the focus. You turn up the volume on marketing in these times, as opposed to turning it down.
Phil: Absolutely true. It's-it's the very similar-what they say about the stock market. You should be buying when everyone else is selling. In this scenario, you should be visible when everyone else is invisible. And you should squeeze every nickel that you've got because the return that you will get will be substantial.
Russ: Okay. Well, I really appreciate you sharing this with us. For those listeners who are not familiar with Pierpont Communications, you can go to thebusinessmakers.com and search on Pierpont-that's P-i-e-r-p-o-n-t-and hear Phil's interview. But that was awhile back, so why don't you sort of bring us up to date on Pierpont Communications in 2009.
Phil: Well, as I had mentioned, we've had a lot o growth. We're now in Houston, Austin, Dallas and San Antonio, so we have completely covered the state. As you had mentioned, we're one of the largest communications firms in the south, and our offering is pretty comprehensive, so we're able to help people out in just about any aspect of marketing or PR that they require.
Russ: Okay. Phil, thanks a whole lot.
Phil: Real treat to be here with you and good luck to all the entrepreneurs out there. Market away.
Russ: Great. That's Phil Morabito, founder and CEO of Pierpont Communications. And that wraps up the Aflac BusinessMakers Flashback, brought to you by Aflac. Ask about it at work. And now it's time for another Advantage Point, so let's welcome Katie Laird.
[Advantage Point]
Russ: You're listening to the BusinessMakers Show, heard here and online at thebusinessmakers.com. Stay tuned for a discussion with Giovanni Galluci, the online interactive marketing guru.