The 3 Things Businesses Must Do
During A Recession!

By David Sanders, C.M.C.* and Keith Legg, C.M.C.
*CMC: Certified Management Consultant

There are three things that must always, always, always be done during a recession. These three things are usually not done, in fact the opposite is usually the case.

"Ya, ya, ya we've heard this sales pitch before, ya, ya, ya," you may say.

OK, you may have heard of this before but have you actually really done anything about it? If you want to survive in rough times listen up. We'll tell you what to do, and we'll even tell you how to do most of it.

Ready?

What you need to do is this: 1st you need to promote, 2nd you need to promote and 3rd you need to promote.

But get this, most businesses and people think and actually do the opposite of this.

David Sanders: "Most of the businesses and individuals I've been introduced to have the tendency to cut back financially by starting with their promotion and marketing budget. They seem to think that since there is less business to go around they should cut back and save the money that they might possibly be 'wasting' on promotion.

Most U.S. business owners and senior executives do not know how to steer their company through a recession. In fact we haven't had a recession in the U.S. for a about a decade. Plus The Economic Cycle Research Institute says that we're in the first 'synchronized global recession' since 1973-1974. Therefore many executives and business owners are in unfamiliar waters and the environment is seemingly quite dangerous. In such a situation many tend to reach less and get less of what they want. They blame the lack of business on 'the economy', as if it doesn't have anything to do with their own actions or inactions.

You probably have seen a lot of 'hunker down' management--executives cutting costs across the boards. But they often cut without careful analysis of who their most profitable customers are and what they could do to strengthen those relationships. Many businesses lay off employees, hoard cash, slash marketing and hope the bad days go away quickly. If you are lucky, this is what your competitors are doing. They are preparing for the recession but not for the rebound.

Great business leaders, by contrast, use recessions to capture strategic high ground in their markets. For example, in the 1991 recession individuals like Michael Dell of Dell Computers, as well as the leadership at Intel Corp. made strategic marketing moves that propelled their companies into today's dominant positions in America.

U.S. Recessions have typically lasted from six to sixteen months, however government commerce officials wait at least 6 months before declaring one. Last week it was just announced that the present US recession began last March. Already nine months into it and already maybe coming out of it, smart executives and owners are looking for how to come out on top when we hit the updraft. This is where a business's marketing comes in."

Keith Legg: "Promotion is a part of the larger, complete subject of Marketing. There are marketing principles to know and apply so that promotion is successful.

The reality is that in times of recession there may not be as much money to go around. Even if you concentrate as much as possible on your marketing and promotion it may not seem like you have enough response. So what do you do? You need to get smart and come up with a bright idea that will work.

A client of mine once called and said 'Help! My business is dying...fast!' and 'I have no money for marketing'.

My response was, 'Do you have a photo copier?' Client's reply was 'Yes'.

'Paper?' 'Yes'.

'A pen?' 'Yes'.

Then I had him look at what type of flyer or ad he had done in the past that worked. Then I had him create an ad on the spot, photocopy it and put it on the windshields of cars at the shopping mall where his office was located. Result? Several months later he's calling me for advice on what to do with all the extra revenue.

David Sanders: "A client of mine, a contractor, was suffering from lack of business. He was overwhelmed and snarled up trying to finish up two jobs that were overdue which he had to finish to get paid. Money was tight. I made him dig out an old post card that he had sent out successfully in the past.

In looking it over carefully we found that his best response had come from mailing it to architects across the entire metro area. So we repeated that successful action despite all the reasons it was highly impossible. Within days he had two jobs to bid on. Plus we concentrated on finishing up the two jobs that were hanging fire which not only gave him some cash, but also lifted his spirits and he was then able to tackle getting new work with enthusiasm.

I have dozens of similar examples I could give but let's look at a much more current one.

Last month, barely a month after the tragic terrorist attacks, I flew to New York City, the "eye" of the current economic storm. My purpose was to aid the recovery efforts and to find out first-hand what was happening there business-wise.

I spoke with the Mayor's office, Federal agencies and surveyed dozens of executives from all types of businesses. Many businesses had been hurt already by the economic downturn before Sept.11th. Our global recession, combined with the new war, had unnerved many people responsible for the prosperity of businesses. I found that roughly 25% of New York city businesses were not adversely affected by the tragedy, 50% were affected to some degree and 25% really crashed.

The restaurants in Little Italy were empty as tourists seemingly stayed away. But were they promoting? No. Companies involved with making movies were idle and pretty apathetic. Ad agencies fired most of their staff as many companies cut their advertising to the bone. What a mistake! A fashion magazine had a sign on the door telling delivery people to return all packages to the sender. All this is the opposite of promotion!

On the other hand, a real estate appraisal business was promoting and their success was out the roof.

Interestingly, one entertainment company, promoting like mad, had obtained huge contracts with Disney and Warner Brothers. They intentionally were moving their offices into the area where the terrorist attacks had occurred. They planned to paint a big target on the side of their office building as an insult to Osama Bin Laden and terrorism. On the other hand a large firm had refused to do business with a company that was backing out of attending a New York trade show. By cutting their promotion this company lost the loyalty of a long-time supporter.

By survey, the hottest topic in Manhattan today is 'Successfully Marketing Your Business in a Recession'."

Keith Legg: "To Market or not to market? To cutback on marketing expenses or not to cut back? These are the questions.

The answers are simple, even common sense, yet they are seldom followed--except of course by successful businesses and individuals. And the successful businesses are the ones that are still here after the economy settles out and the others are gone. Guess what the less successful businesses should have done? Guess what would have made them the most successful?

The answer is marketing. And this marketing plan contains in it, promote, promote, promote. One has to understand that marketing is the broader subject. It contains all of the concepts from conceiving the correct product to take to market, packaging it, promoting it to the correct groups of people, or 'correct publics' in a way that gets sales in the door.

Dave Sanders: "I discovered early in my career as a business consultant that if one does not know how to market effectively in any kind of economic environment, he will not have a lasting, successful business. A major reason that so many businesses fail is that they don't even have a clue what to do if their current successful marketing actions suddenly weaken or die on them. When the wind changes they just fall into the hole of what they don't know. Rarely it occurs to them that there is something that would allow them to pull up and really prosper."

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