Bad economies do rebound. Don't do anything drastic. (cc AZ Rainman)
In a recent issue of Business Week, Steve McKee writes about Five Don’ts for Marketing in Tough Times that are worth repeating.
With all indicators pointing to tough sledding through the rest of 2008 and into 2009, if it hasn’t already, the impact of a slowing economy is sure to be felt in your business. Whether its smaller orders, smaller customer numbers or higher product costs, remember to stay focused and to keep your resolve. Don’t fall prey to the five common mistakes companies make when times get tough.
1. Don’t stop spending. Cut carefully.
Economies are cyclical, going through expansion (boom) and contraction (bust) cycles. If you’ve managed your finances wisely, your business should be able to weather slow periods. If you have to make cuts, be careful what you cut.
2. Don’t stop marketing.
While it may sound counterintuitive, marketing during down times is a smart move. Dollars generally go further, and there is often less message competiton in the marketplace. Viewed the other way, your company’s absence during tough times signals there may be trouble at your company; you may just be sending the wrong message by not sending any message at all.
3. Don’t pursue business you wouldn’t normally want.
While tempting to cast a wider net during lean times, the wise advise is to not do it. Stay focused on your core customers. Why? Because in the eyes of your target market your company loses prestige.
For example you are a high-end wedding photographer. During flush times you are booked a minimum of one year out. Times are lean and, well, you could use a few more engagements. So you start shooting high school seniors. Word gets out. Now you become known as a senior and wedding photographer. When times get flush again, will the high-end weddings return? Or will you now be a senior photographer? Think about it.
Smart money says do your best to enhance your value to your core clientele. Build client relationships that bring in referrals. Expand your circle, even your geographic draw, but stay in your niche.
4. Don’t discount.
It’s easy to rationalize discounting during a downturn. For your company’s sake, it drives business; for your customers, it helps their pocketbooks. But discounting your price discounts your product in your customers’ eyes. Worse it teaches your customers that your product can be had at a discount and they will come to expect that your products will always be on sale, or there will always be a special. It is the worst thing you can do. Do not get started in a discounting game. You will lose.
5. Don’t deny the economy is bad.
Optimism is a wonderful thing, but to deny that gas prices aren’t hurting everyone and food is expensive is unrealistic and unsympathetic. Even if your business is fine, your employees may be struggling. Make sure you communicate with employees that you are steering the company through the economic uncertainty.
There is no crystal ball to foretell how the economy will fare in the months and year ahead. But babies will be born, high school seniors will graduate, families will gather, couples will wed and photographers will be hired capture these memories. Avoid the above mistakes and chances are you’ll survive these rough economic spots and thrive.
