You don't need a degree in economics to understand that
markets are sluggish around world. In general, companies are nervous. A level of investment paralysis has occurred. These are uncertain times. When will it change? When will good times come back? How can I maximize my organization's market position during this murky financial period?Don't be caught looking in-ward Clearly, today's business environment is recessionary and filled with challenges. Customers expect more and hold higher value expectations. Stakeholders look for increased returns on their investment. The competitive climate has moved to world stage and is more intense. Technology continues to compress product life cycles from years to months, and in some cases weeks. The world-manufacturing sector is in recession.
In a time of uncertainty (when is it not some form of uncertainty) it might be tempting to pull back. Under guise of ‘being prudent' senior managers begin to contract their thinking. The organizations focus bears down on plans to cut back while finding logic in not investing. Advertisement, creative marketing programs and seeking new business takes a back seat to cost cutting. Putting off new product ideas or delaying product introductions becomes appropriate behavior.
This thinking begins to pervade organization. Soon everyone is looking for ways to lower costs. People find ways to rationalize cuts in customer service, or prudent (there is that word again) ways to lower quality standards. Increasing discounts, or lowering your bid to ‘get-the-job' becomes norm. Generally organization begins to over-commit and under-deliver.
Your organization may now be in a prudent mode, but missed an opportunity to grow by taking market share from timid competitors assuming same ‘prudent' position.
Now's time to act Remember that economic black clouds also hold silver linings. Opportunities always exist, but you have to be looking. Companies that seek new business potential and muster courage to act now will gain competitive advantage, while propelling them to an increased level of market leadership as economic turn-around occurs.
What do winners do during turbulent times? Winners advertise, advertise and advertise some more
In funky financial times first cut is to advertising budget. Why? Because it appears to have no short-term business impact, while providing immediate cost reduction. Unless your company is in danger of going belly up, this is exactly wrong thing to do. Anyone can perform this short-term thinking.
Advertising during tough times holds tremendous value. It keeps alive connection between you and your customer. It let's them know you're doing fine and still in business. Don't under-estimate this point. Advertising at this time communicates a powerful message. It says you are strong, in it for long-term and re-enforces their decision that they made a good choice.
Advertising during tough times frightens competitors and will gain business. Customers look for better deals and don't seem fearful of moving to other companies that appear to be stronger during uncertain times. Give a potential customer visibility of your company through advertising. Usually, more individuals will see your ads because fewer people are advertising during these times. Besides, I usually find that periodicals and mediums are more than willing to reduce their rates. Some cutting them in half or more.
McGraw-Hill evaluated performance of 600 industrial companies following 1981-1982 recession. Their study found that business-to-business firms that maintained or increased their advertising, during recession grew their sales 275% from 1980-1985. Sales of those firms that cut their ad spending averaged only 19% growth during same period.
Another study in 1990 examined 339 consumer businesses to determine relationship between advertising spending and market share during a recession. The study found that those companies that aggressively increased their ad spending (20-100%) gained 0.9% share of market. Those that moderately increased ad spending (1-19%) gained an average of 0.5%. Those that reduced ad spending gained 0.2%.
An earlier study was conducted with industrial product and service companies. It yielded similar results. During recession, company market share increased with ad spending. Businesses increasing their ad spending "gained an average of 1.5% market share."
There is a correlation between advertising, market awareness, and business
Winners challenge sales Reps - put more "feet-on-the-street"
Nothing happens until a customer decides to purchase and that usually occurs when a salesman is involved. Get creative. Find ways to spark interest in your company and products. Make a list of customers that haven't purchased in 6 months. Have your sales reps call on them.
Who are your best customers? Make sure you protect these accounts during tough times by having your sales reps key in on them. You'll be amazed at how often added business occurs.
Make a list of all leads less than 6 months old. Everyone knows that leads aren't followed up properly. Have your sales people follow up on these leads again. Implement a pro-active telemarketing program for leads. Find out a few of your competitors key customers. Formulate an aggressive plan to ‘take-away' these accounts. Wrap all these plans around added incentive programs. Added incentives get sales reps attention motivating them to spend more time prospecting as well as keeping your accounts.
Put more "feet-on-the-street". Whether you're trying to win a war or gain market share. Those with superior forces usually win. Find ways to re-direct money to hire additional sales people. Review your present sales force. Now would be an excellent time to increase your minimum acceptance level for sales performance. Sadly, you may find that 80% of revenue is generated by 20% of your sales people. Do math. Get rid of non-performers and you'll have plenty of money to expand your sales force with fresh, motivated individuals.
