Keep Your Company from Being Cut in a Recession
Every person around the world is looking to cut costs it seems. In turn, every business needs to ensure their current and existing customers don’t cut them.
So remember, in this environment, the people who make purchasing decisions will look to purchase from companies they deem stable. How do they determine stability? Through outward appearance.
Small companies and those who have reported negative earnings are at greatest risk. Remember, customers know small companies are not generally well-capitalized.
In response, all companies need to oversaturate the markets they serve with the best news they can create. This is regardless of how well they are doing. If sales are generally good now, it makes even more sense to focus on putting a halo around your brand to protect it from bad times which may or may not be ahead. Customer wins, new product launches, a new green data center, a widget that does something useful – if you have any of these, issue a release and try to get some positive media coverage.
In addition – continue to market. The smart companies realize there are fewer dollars out there and to keep sales on par with last year or just to keep from losing money, they need to take market share from others. Nine out of ten times this is done by outmarketing the competition. In order to take market share you must increase mindshare and marketing – whether you use better SEO, trade shows, webinars, social media or other vehicles.
The iPhone was one of the most successful product launches in history and Apple still spends tens of millions or more pushing a product which is on fire. We need to learn from Apple – not just in their amazing product designs but their great messaging and attention to marketing — even when times are tough.
Marketing is an Investment in Customers
Put yourself in the customer’s position. Do you think they want to buy from companies they aren’t familiar with and those who do not invest in their customers? No – they don’t. Why on earth would someone put their job on the line for you if they aren’t positive you will be around? If you think just wining and dining decision-makers is enough to win the business, you are wrong.
This is a different recession. This is a recession where GE, Goldman Sachs, Nortel, Merrill Lynch, Linens & Things, Circuit City, Mervyns and many others were brought to their knees. At one point, many companies looked to Merrill Lynch and Goldman Sachs to bring credibility to their public offerings but now, things can’t be more different.
Now think about this…. Would you buy from you?
Whatever market you play in from copiers to phone systems, if you are not continuing to promote how well your company is doing, people will assume you are doing as well as many of the companies referenced above.
Don’t think customers aren’t thinking about Nortel’s financial situation when they are faced with signing your purchase order. The question is, what are you doing to ensure it gets signed? Are your potential customers sure you will be a survivor? If not, you are in trouble my friend… Real trouble.
Every company will explore cutting back on marketing budgets and in virtually every case this is a mistake. Ask yourself this question – are you spending your dollars as wisely as you can? What are your goals and are you altering them to suit a rapidly changing economy?
Remember, in my experience of the past 2+ decades, the companies who severely cut marketing are generally the ones who go under soon after. The ones who fail to start marketing as markets contract do even worse.
The most amazing statement I have heard in my career – and I am hearing it frequently these days is – we are waiting for sales to pick up so we can start marketing. This is the equivalent of going to the fireplace and telling it you are waiting for it to produce heat before you put a log in. This is obviously lunacy… Marketing to your potential customers is what allows your sales to begin with. You can’t increase sales without increased PR and/or marketing.
All companies need to navigate these financial markets to become not only a survivor but a company smart enough to take advantage of the competition’s fear while taking share.
Yes, now is the time for prudence and now is the time to cut unnecessary expenses. But remember – be careful where you cut from – after all, your customers are trying to find a reason to cut you.