Marketing Strategy During Recession

When it comes to a recession, smart businesses and smart people have been cutting back on nonessential expenses. Easy to say now, but besides the fortunate few, who really knew the recession was coming? So forget what we should have done and let’s start looking at what we can to do now.

It seems every financial advisor is giving advice on how to manage the family budget. Simply make a list of your fixed expenses such as; rent or mortgage payments, insurance, automobile etc, and then determine where you can cut the non fixed items, the luxuries, dining out, the morning latte etc. Working families generally have a fixed income, so budgeting is easier but no less painful than for businesses.

For businesses it is more difficult as all expenditures are tightly budgeted to income projections. When revenue targets are not met, expenses have to be cut. The big question is where to cut expenses, advertising, and customer service or layoff employees. Careful consideration is crucial and the top priority has to be to save and grow your customer base. “Service is the lifeblood of every business, everything flows from it and is fed by it”. Peter E. Smith As I have said many times, without customers we have no business!

During difficult times businesses generally classify employees into two groups, the ones who generate income and the others who are administrators or managers. It is almost the chicken or the egg theory. The pressure on employees, when the revenues decline, is evenly split as everyone’s job is vulnerable. When sales decline; do you add more sales people, replace the ones you now have or advertise more? Do you cut advertising, sales incentives and expense accounts or do you spend more on sales incentives and your customers?

History will always show us how companies operated in past recessionary times. Valuable lessons can be learned by studying similar business to yours during those difficult times. “Learning is not compulsory….neither is survival”. W. Ewards Deming There are always causalities and success stories; sometimes you do not have to reinvent the wheel. “Before we build a better mouse trap, we need to find out if there are any mice out there”. Yogi Berra New and old ideas can be added to your business plan at any time.

Employees will always determine which businesses will survive whether times are good or bad.