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[R77]Reasons For Economic Crisis

by Enrico Madrigrano, Enr

According to Enrico Madrigrano, one of the biggest experts in web marketing and Search Engine Positioning in Europe, "To understand it you need to get to the root of the problem". In other words try to understand how the famous law of supply and demand will play out in this market.

"From the demand point of view," states Enrico Madrigrano "the companies that want to survive the crisis will inevitably have to cut their promotional costs to survive. This means that the first advertising spending to be cut will be that with a negative return which is perceived, in one way or another, as "risky". In this category are obviously included investments in TV, radio and press advertising, which have always given results that are unpredictable and hard to quantify. The advertising budget will therefore mainly be directed towards direct marketing and to those advertising methods, where the results are predictable and measurable and where the benefits of targeting will be best appreciated. In short "web marketing". But this transition will only happen under one condition: that companies and entrepreneurs become "aware" of all this, or rather that they become totally involved in the front line of their company web marketing strategies and that they perceive and appreciate their potential, right from the word go."

"On the other side of the equation, therefore, web agencies and SEO and Web Marketing consultents, who represent the "supply", will have to take responsibility for educating their clients, focussing directly on what their company is looking for, that is reducing their costs and getting a return on their investments."

However in this scenatio a phenomenen will develop, which web agencies and consultents will have to beware of. "A split will form, dividing the supply of professional web marketing services (which guarantee good results and profits) and the demand for low cost services, from more and more companies on the hunt for discounts and rock bottom prices."

"In this scenario," continues Enrico Madrigrano "web agencies that want to survive, shouldn't fall into the trap. The secret will be to go against the flow. In other words web agencies, instead of going after the biggest slice of the market, which will be looking for web marketing services at lower and lower prices, should do the opposite, that is "hand-pick" existing clients, focusing on those who value quality and results over price. Instead of leaping into the fray and struggling to corner new clients in savage price wars, web agencies should do the opposite, that is defend their own territory, cultivating and nurturing their own clients, focusing on numbers and concrete results.

In this way web agencies will be able to create a shield in the midst of a scenario of ever more ruthless deflation. Successful web agencies will know how to consolidate their experience, strengthening their hold on the niche in which they already operate, instead of looking for new markets, or worse still setting themselves up as a "jack of all trades" to bring home new clients."

According to Enrico Madrigrano this abnormal scenario will develop very rapidly in conjuction with other big social and cultural changes which will involve not just businesses but also (and above all) consumers. All this "acceleration" in the awareness and process of the supply and demand market forces will lead to what he defines as the new Web Marketing 3.0.

These and other subjects linked to change and the future of web marketing will be discussed in person by Enrico Madrigrano during the next international "SEO Web Marketing Experience" course in Rome, Milan and London (for more information: http://www.madri.com/swm-experience/indexen.php )

Case Study: When the Times Get Tough, Capitalize on a JV

That's just what Michael Henderson and Dave Harrison did. Bad economic times adversely affected their respective businesses when the building construction company they both depended on for a large percent of their livelihood went under and the business dried up. Rather than throw in the towel, they decided to team up and form a JV partnership.

Henderson was an experienced independent subcontractor electrician who went into business for himself in the 1980s. For almost two decades, he subcontracted electrical work for a successful home building company. While he completed electrical tasks on new homes, he worked alongside Harrison, another independent subcontractor specializing in plumbing.

During a particular subdivision home development project, the homebuilder suddenly went out of business and began liquidating in the middle of all the construction. That left Henderson and Harrison out of work and without future prospects, as they both depended heavily on the home building company.

Two Heads are Better Than One

However, rather than seeing the bleak picture and going out of business themselves, they took a positive outlook on the situation. They saw an opportunity to work on an upcoming large-scale construction project, but not individually. The projected called for both electrical and plumbing together. In order to bid on the project, they needed to pair up and register with the European Union and register to get a VAT, or value added tax, number. On a handshake, the two formed the joint venture, Henderson & Harrison, made a bid on the project, and won it. They have been working together ever since.

The two split the profits from their JV work 50-50. They did not work from a formalized written agreement, but just by a handshake. They say that a formal agreement is something they plan to draw up at some time because they do want to have a clear understanding of profit and asset division, and to determine the value of the assets, such as vehicles that have been acquired.

By matching talents and combining forces on bigger projects, they have both seen an increase in their income. Their business works because the dynamic of the two work in harmony. Henderson is the hands-on guy who supervises on-site projects with other subcontractors. With his technical plumbing knowledge, he is able to complete projects with exceptional quality. Harrison, by contrast, is the business partner who likes to meet people, make bids, and get the deals. They are both happy in their respective sides of the work they do through their joint venture.

The only thing they would do differently? They wish they could have started sooner. But only through a bad economic splash were they able to foresee a potential partnership, which has made them much more successful than going it alone.

Copyright (c) 2009 Christian Fea

Article Source : Pg. 21

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Both Enrico Madrigrano & Christian Fea are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.

Enrico Madrigrano has sinced written about articles on various topics from SEO Search Engine Optimization, Email Advertising. Enrico Madrigrano is one of the Top Consultant and Expert in Europe since 1998 - Madri Internet Marketing CEO. Enrico Madrigrano's top article generates over 1000 views. to your Favourites.

Christian Fea has sinced written about articles on various topics from Partnerships, Joint Venture and Business Plan. Christian Fea is CEO of Synertegic, Inc. A Joint Venture Marketing firm. He exemplifies how to profit from Joint Venture relationships by creating profit centers with minimal risk and maximum profitability.To discover more Joint Venture Marketing Strategi. Christian Fea's top article generates over 22200 views. to your Favourites.