Top 10 Marketing Basics For Surviving A Recession
The Time To Act Is Now
By David Miranda
To survive a recession (they historically last 10 to 12 months), marketers must be assertive, timely, and transparent. Assertiveness demonstrates confidence; timeliness demonstrates proactivity; and transparency demonstrates open and honest communication. This is not a time for the timid, the procrastinator, or the indecisive.
The following are 10 marketing basics for surviving a recession:
- Don't panic. A recession is exascerbated by fear. Avoid knee-jerk reactions that appear to be desparate measures.
- Over-communicate to stakeholders. Silence can cause anxiety among the faithful.
- Be and stay aggressive. More aggressive competitors will seek to take advantage in a down market by stealing customers and, ultimately, share if they see an opening.
- Focus on the basics - product/service quality, customer service, value pricing. During a recession, customers seek the optimum price/value for their money and trusted brands have a home field advantage over new entrants.
- Concentrate on your core customers first. It is easier and less costly to get your core customers to spend incrementally more than it is to derive business from new customers.
- Understand the difference and impact of both revenue displacement and revenue dilution before making price promotion decisions. Displacement means that your discounting displaces higher margin business to a competitor. Example: Coffee shop "A" decides to sell $1 cups of coffee to steal traffic from Coffee shop "B". The promotion is so successful that it creates long lines forcing many customers to get their coffee at Coffee Shop "B" at a higher price. This is displacement. Dilution is discounting the price on business you already would have achieved at a higher price. Example: Coffee Shop "A" normally sells coffee at $2 per cup, but decides to distribute coupons for $1 cups of coffee to boost traffic. Regular customers who were going to pay the $2 show up with the coupon. The result is that revenue is "diluted" with the coupons.
- Be flexible and be ready to call "audibles at the line of scrimmage". The marketplace in a recession is volatile requiring many course corrections along the way.
- Reduce the gap between thinking or talking about doing something and doing it. Cut through or eliminate unnecessary bureaucracy that can inhibit or delay timely actions.
- Put people in charge, not committees.
- Fund things that work and stop things that don't.
