We spend a lot of time thinking about ways to make research truly actionable and how insights can make a real-world impact on a client’s business. And while much of the work we do provides important information and guidance, it’s not every day that we can see (and quantify) the direct economic results of research -- as was the case in a recent project for Myrtle Beach.
Myrtle Beach, like most U.S. tourist destinations, has been affected by the economic downturn and as a result of state budget cuts, their tourism funding budget was reduced this year from $18 million to about $5 million. That cut severely limited the ability to advertise to the tourist market within driving distance of Myrtle Beach, putting the destination at a distinct competitive disadvantage.
That’s where Equation came in. Earlier this year, we were asked to conduct a study to gauge the economic impact of tourism in Myrtle Beach. The goal of the research was to quantify tourism activity/behaviors in order to project what that meant in terms of actual revenue produced by the Myrtle Beach area.
The results were eye opening to say the least. Referencing the data from our study, a leading local economist concluded that if the economy caused consumers to spend 10% less in 2009, Myrtle Beach’s tourism business could lose 7,000 jobs and about $400 million in local business revenue.
This finding emboldened local politicians to go to the state capitol and fight for additional tourism funding, to be derived from a 1% increase in consumer taxes. Long story short, the state agreed and moved quickly to put the tax increase into effect. As a result, the new tax would raise an estimated $15 million or more for tourism efforts for Myrtle Beach and lenders became willing to immediately fund MB’s marketing efforts against the projected tax revenues. Now that is making a difference!
A key recommendation in this case that Myrtle Beach took to heart and something we’ve seen consistently across different clients and industries is that the best time (and some here at Equation might argue, the only time) to gain market share vs. competitors is in a down market. When times are good, everyone is marketing, client attrition is low and market share is unlikely to change drastically. However, when the broader economy or specific events in a given category cause the players to hunker down, cut budgets and avoid risks - THAT is the time for a brand to go on the offensive to increase market share.
So while the economic turmoil of 2009 poses huge challenges and hurdles for many companies, it also provides an even greater opportunity for those willing, able and smart enough to take the risk of actively pursuing a greater piece of their market.