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:

1. Don't panic. A recession is exascerbated by fear. Avoid knee-jerk reactions that appear to be desparate measures.


2. Over-communicate to stakeholders. Silence can cause anxiety among the faithful.


3. 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.


4. 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.


5. 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.


6. 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.


7. 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.


8. 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.


9. Put people in charge, not committees.


10. Fund things that work and stop things that don't.

So, get going.

Why A Recession Is A Great Time To Increase Marketing Budgets

With A Smaller Pie, Brands Have To Insure A Bigger Piece Of The Action

By David Miranda

It is generally common practice that when a recession looms, companies have a knee jerk cost-cutting reaction, as is manifested with reduced headcounts and smaller budgets. This process, in itself, negatively affects morale and momentum of the marketing effort. The short term impact will indeed improve the P&L, but at what price? Typically, when the recession subsides, those companies that were fast to cut expenses are also typically slow to increase funding at the onset of a growth cycle.

Of course, it makes perfect sense to bean counters. We all have heard the mantras, "we must live within our means"; "we must be more productive and do more with less"; "we need to do the necessary belt-tightening", etc, etc. etc.

Here are the facts.

In a recession, people (and businesses) still spend, albeit less; creating a smaller demand "pie" to go around. If a company, therefore, wants to maintain or grow revenue; there is no other choice than to aggressively go after a bigger piece of the pie. Simply put, stealing share from others. Those that cut their marketing budgets during a recession are conceding business to more agressive competitors and, by the way, the best time to steal share is in a recession.

Coming out of a recession who would you guess is better positioned in an upturn - the company that cut its marketing ranks and budgets or the company that became more aggressive?

Spending during the boom times? No brainer.

Spending more during a recession? A bigger no brainer.

No Country For Old Marketing

If You're Pining For the "Good Ole Days", You're History In Today's Marketplace

By David Miranda

Pundits opine daily whether the country is in a recession or merely a "slowdown" as the President recently described the present economic malaise.

Whatever term one decides to use, the fact is that record foreclosures, credit card debt, trade and budget deficits, and gas prices; declining value of the dollar; 48 million uninsured citizens; soft housing market; a credit crunch and a volatile stock market set the stage make for a challenging time moving forward for marketers.

What companies will do is predictable - they will contract and adapt to survive or be added to the "endangered species list". In a slowdown or recession, there is a "culling of the herd".

In this environment, advertising and promotion will not solve their company's revenue problems. As a matter of fact, desperate measures by desperate competitors could exascerbate the problem.

This is no country for old marketing.

What to do?

1. Don't panic.


2. Recognize and protect your base (your most loyal and frequent customers) from being "poached" by competitors.


3. Improve your price/value offering to consumers, i.e. adding value rather than reducing price.


4. Manage "stratactically", i.e. although economic slowdowns are typically characterized by tactical warfare, always consider the strategic implications of your tactics. Example: reducing prices instead of adding value will have long term negative implications on revenue and margins.


5. Be proactive, not reactive. A "me-too" tactical approach, i.e. waiting to see what the other guys are doing, can be fatal in a hyper-competitive environment.


6. Amputate anything that is extraneous to success, i.e. products, services, people.


7. Get back to basics.

Now get on with it.