Recession Cures: What & What Not to Do

Posted on | August 27, 2009 | 2 Comments

Keystone Cop What’s the recession fighting strategy of choice for most business owners? Why, it’s none other than: tell the sales force they have to try harder!

That unexpected finding is just one of many coming from a recently completed survey commissioned by Red Wheel Marketing of Toronto, the outsourced marketing management firm. Their July 2009 survey polled 25 small and medium sized business owners located across Canada about what if any different approaches these owners had or were taking to sales and marketing in response to the on-going Great Recession. Other important findings included:

- 76% of businesses have been affected by the economic downturn
- 50% addressed the market downturn by dropping prices
- Business owners expected the same or better results from sales reps
despite the economic downturn, and
- None of the companies surveyed provided sales staff with any new
or different sales supports such as selling tools, lead generation or incentives

Carolyn Reid, President of Red Wheel Marketing characterizes what she found above as the ‘just sell harder’ strategy. She says it really doesn’t do much to grow a business because all it represents is just doing more of the same but expecting different results. Now Rick Spence who wrote about these survey results for the National Post on Tuesday August 25th [link] said this survey “makes Canadian entrepreneurs look like the Keystone Cops of business: too busy panicking to sit still and develop strategic responses” If that wasn’t damning enough, he went on to point out that “insanity, they say, is doing the same thing you’ve always done and expecting the results to be different.”

So, there you have it: what not to do is stated above.

As to what you should do, Ms. Reid advises business owners they should do a ‘recession marketing re-think’, which she outlined as:

1. First Priority: reconfirm what your customers’ needs are now
- ask them directly how the recession is affecting their business; how
their challenges and opportunities are changing; what their current
business issues are?

2. Revisit your company’s mission statement
- make sure it commits your team to focus everything they have on
  serving the newly rearticulated needs of your current and future customers
- then make sure everyone in your organization knows what your
  mission statement is and why it is what it is because that way
  everyone will pull together as they should
- remind everyone how the only reason your company exists is to
  serve your customers’ needs, and when your organization does
  that well, your company will be rewarded with more profits, but if you
  do it poorly, you will be fighting for your company’s very survival

3. Revise marketing strategies so they meet the times &
    customer changing needs
– do address pricing strategy, but don’t drop prices (should
  you really serve your customers’ vital needs well, maybe you
  should consider raising your prices!)
– consider developing a ‘recession buster’ offering that customers
  just can’t ignore
– re-examine key marketing strategy areas: target customers
  and sectors, your product or service offering, its pricing,
  positioning and sales promotions
– tempting as it may seem, don’t jump right to that high profile
  tactic, promotions – do promotions last as the other marketing
  strategy initiatives will inform and amplify it
- develop fresh perspectives and new creative, positive approaches

4. Align sales effort with new strategies
– revise structure, tactics, and processes to meet your and your
  customers’ business needs
– equip sales team with the offerings, support, tools and training
  they need to do the job you want done
- importantly, "do not hang sales reps out to dry," Reid stays for
  "the tendency is to freeze all expenditures in a recession, but history
  has proven businesses that can invest in marketing in tough
  times stand out, fill the void, and make great traction".

As to other recommendations, I offer these:

A) Make sure you are doing cashflow forecasting
– this is the way to insure your business doesn’t run out of cash,
  even temporarily
- you do this by projecting out what cash inflows you expect and
  when and what cash out flows you have to make and when,
  with any difference either coming from drawing down on your bank
  line or paying it down

B) Maximize & speed up your cash inflows as much as possible
– make sure the customers you’re selling to don’t owe you more than
  they can pay and try to make sure they pay you sooner, hopefully much
  sooner, than later
- actively try to increase your sales by making sure no customer needs
  get over looked and that your sales staff is working in a focused and
  efficient way to grow your customer base

C) Minimize & slow down your cash outflows to whatever
     practical degree you can
– try to minimize your inventory levels and carefully rethink business
   spending to eliminate those things that have delayed payoffs (maybe
   you could trim back staff levels or hours, maybe you could redirect
   money that might have been paid out as bonuses to developing new
   sales materials, campaigns or incentives, etc).
- if cash is really tight, talk to your creditors about stretching out or
   slowing down payments until business picks up once again

Remember, if you are feeling challenged about marketing issues or finance or more general business matters, help is just a phone call away:

> Carolyn Reid, President, Red Wheel Marketing
(647) 388-7171

> Tony Johnston, President, Compass North Inc
(416) 346-4140

– by Tony Johnston
Compass North Inc.

Comments

2 Responses to “Recession Cures: What & What Not to Do”

bizsugar.com
August 27th, 2009 @ 3:54 pm

Recession Cures: What & What Not to Do | Biz Money Matters |…

Do you know what the majority of business owners have as their preferred recession fighting response? Learn what it is along with what and what not to do. Businesses will be much better off for it…….
Fundamentally Better Way to Sell More | Biz Money Matters
February 25th, 2010 @ 11:58 pm

[...] Wheel Marketing survey results that I reported back in August 2009 in my Biz Money Matters article Recession Cures: What & What Not to Do. Unfortunately, despite how seeming appropriate this type of brutish approach is for these tough [...]

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Tony Johnston
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Tony provides executive management and advisory services that help companies get MORE !!

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Tony delivers the leadership or leadership support needed that can make remarkably outstanding results happen operationally, economically, financially and in the eyes of customers, lenders & transaction counterparties.

If you are a decision maker in a company that wants MORE, give him a call at 416-342-5652 or check out the Compass North Inc website [click here].

Tony's ability to help companies achieve important/challenging goals is well demonstrated by his long record of success, which includes:
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