Marketing in a Down Economy
It’s a simple fact of life that in a recession, business will be off for most companies. That’s an environmental influence that’s beyond our control.
It’s a simple fact of life that in a recession, business will be off for most companies. That’s an environmental influence that’s beyond our control. However, it can be argued that every situation has its opportunities. The issue for management is determining what to do to capitalize on the "recession" situation. Here are 11 actions specific to marketing and sales that you can do to turn the tables to your advantage.
1. Eliminate non-value-added activities. Closely examine each and every one of your marketing and sales functions to identify non-value-added activities. In good times, every function acquires some "slop" as a natural consequence of rapid growth. This muda (Japanese for "waste") should now be painfully apparent in your marketing and sales—and now is the best time to eliminate that waste.
2. Identify the critical success factors (CSF) for your business. Detail the existing (and non-existing) marketing/sales activities that support your CSFs. Slower times usually mean you have some available analytical resources to analyze improvements in existing activities and investments in new activities.
3. Exploit a competitor’s weakness. Take a thorough and honest look at a competitor’s sales practices and business operations. Find a weakness (or several) there. Since it is probably in the same situation as your company, some easily identifiable (and possibly hauntingly similar) weaknesses should be apparent.
4. Focus on profitable accounts.A down economy is an ideal time to jettison unprofitable accounts and to re-focus resources on profitable ones. There is an inherent aversion to deliberately "firing" customers. But sometimes customers cost you more than they bring. Don’t call customers and inform them you will no longer sell to them. But stop assigning your top people to unprofitable clients, and instead, focus on providing added value to the customers who will respond favorably (and profitably) to your attention.
5. Find a hook in key accounts. The reality is that your customer’s business is probably in pain, too, which means that its needs have changed. Re-evaluate its wants, needs and expectations. Then, find a hook for products or services that you can provide that will assist in its growth. This could even lead you into a new, profitable business.
6. Acquire great people. Now is really the best time to shed marginal people (you should be shedding the bottom 10 percent of your people every year anyway). The up-side is that these times are likewise the best time to acquire great people. There are bound to be some great players avialable now. Snap them up while you can.
7. Exploit (or rather, work with) your vendors. In down times, everything is cheaper. Talk with your advertising vendors, your trade show vendors, and so on. Consider marketing/sales programs that were previously too expensive, and negotiate to make them realistic.
8. Spend time with your customers. Top performers are usually characterized as companies where top management (including CEOs) spends about 30 percent of its time with customers. Get out of your office—now, more than ever. Your best customers and prospects are at risk, and sitting behind that desk won’t save them.
9. Invest in training. Training is cheap. Now, when people may not be fully loaded, is the ideal time to get them trained. You not only improve performance, you improve morale, teamwork and continuity while laying the foundation for growth that will surely follow this recession.
10. Invest in key projects. Invest in programs that focus on the acquisition and retention of profitable customers. Your first instinct might be to cut back on all programs in a cost-cutting frenzy. Don’t cut so deep that you have no one with the bandwidth to push critical projects forward and pursue new opportunities.
11. Improve. Determine the cause or causes of your last few marketing failures. Put an improvement plan in place. Strive to never again perform poorly in marketing/sales.
The most important thing every company can (and should) do in these slower times is to plan for good times to come. A comprehensive and tested marketing/sales process will allow you to shore up and eliminate problems, and place yourself at the head of the pack. Be ready for the boom instead of racing to catch up.
Mitch Goozé is a partner with Customer Manufacturing Group, a marketing consulting company. He can be reached at (408) 987-0140 or at firstname.lastname@example.org.