Just a few thoughts about how to market in a recession.
Background – my belief is that marketing is actually a ‘Strategic Management Discipline’ and should be at the centre of everything an organisation does to do its business, now and for the future.
It is an ongoing, continuous, process that is part of the fabric of your business, day to day, not something you do as a one off project, or once a year when things are quiet, or only when the bank manager asks, “What you are doing?”.
Real Marketing™ encompasses at least 7 areas and how those areas interact. These are: –
- Sales – This is a subset of Marketing not the other way round – this is about sales processes and routes to engage with customers.
- Promotions – We do this as well as, not instead of – this is how we get the messages about and from our organisation, products and services out to clients and others.
- Finance – Is about: Pricing, yield, profit, revenue flow, payment terms, cash flow, ROI and ‘Will we make any money doing this?’
- Research and Development – What are we going to make money out of once the market for what we are doing now, declines or goes commodity on us? What else could we do? What are our competitors doing and how and what is their pricing?
- Distribution – What’s the point of making, promoting and selling something if the customers cannot get their hands on it in the right quantity, at the time that they want it, and where they want to buy it from?
- The Marketplace – What is your target and actual Marketplace? How big is it? Is it expanding or contracting? What is it like? What are its characteristics? What avatars occupy it?
- The Future – Marketplaces are in constant flux and change. It is thus necessary to have a plan for tracking your marketplace (and similar ones!) and anticipating those changes; ideally to your advantage. You need to do PEST, SWOT, Upside/Downside, Risk/Reward and other business analyses ideally on a regular basis and then compare performance with projections.
The trick, and indeed the vital necessity, is to keep all of them going, and in balance, to drive the business forward. They are of course all interrelated and you cannot change one without it affecting all the rest.
(Most of the major business schools support this model in stark contrast to the many who confuse promotions or even advertising with the whole of marketing. Increasingly and especially in a Web 2.0/3.0/IoT world, ‘push marketing’ is becoming less effective and ‘pull’ marketing increasingly important. Equally, the barriers to entry or survival are lower as a result but you do have to get it right)
This is particularly important in a recession, but some things that might need even more attention in a recession are: –
- Credit check before engaging – you should check the financial stability of those you wish to deal with, before you engage. What is the point of doing lots of work for someone who is unable or unwilling to pay you?
- Don’t take their risk for them – I’d also avoid payment terms where someone wants to pay you after they get paid. Why should you pay their banking charges and take their risk?
- Have very clear up front contracts for products and services – You must understand exactly what is expected, up front, anything else is a chargeable extra. Asking for more than was agreed after the event, with the threat of non-payment, is a common subterfuge as is using it as an excuse for late or refused payment.
- Farm much more than hunt – It costs many times more to find a new client than it does to get another order from an existing one. In a recession however, you will lose clients because they will cut back on their trading, or go bust. Equally, they will be under attack from your competitors who are losing their clients too. It is vital that your customer service and communication with clients is perfect n a recession – others will go the extra mile to capture them from you if you don’t.
- Protect customer expectations and base – You do this by ‘up front contracts’, and exemplary customer service and delivery, as above.
- Stay in touch and reassure – Make sure that you are in regular touch with your customers, give them offers, remind them of extra products or services they could have from you – above all keep them appraised of your situation and assure them of your continued attention and desire to do business with them.
- Check pricing strategy – In a Recession, there will be pressure on prices but if you drop yours, and volume falls as well, or you sell your limited resources too cheaply, it is easy to go bust. Your price is always what your clients are willing and able to pay. If they are unwilling to pay, what you need to have to survive, stop trading in that item. More trading in loss-makers just means you go bust faster. You’d last longer spending your money in the pub, watching TV!
- Seek opportunity from the failure of competitors – If a competitor goes bust, find out if you can approach their customers (after all, they now have to go somewhere else) or, even if you can buy their customer and supplier databases from the liquidators or administrators, – this represents an easy access, new market, for you, especially if you are able to honour their outstanding warranty claims.
- Cooperate – Seek strategic alliances – Go seek these out, find those whose products or services are complementary to yours, or who are happy to exchange promotional links, or address your market place, with a different proposition, even if you pay introductory or affiliate payments. If there are common purchases, find out if there are group purchases possible for better discounts.
- Nurture your networks – Now more than ever you need your networks, find ways to help your network and make sure they know that you need referrals as well – to do this well they have to have a very good idea of what you do so make sure that you have communicated it clearly and often.
- Promote like crazy – now, more than ever, you need to increase your promotional efforts to the maximum that you can manage – and to get smart with it. If you don’t know how to do Viral for example, learn! (or of course hire someone who does). Do contras of what you do in exchange for advertising (or indeed other services such as web design, SEO or blogging), and make sure your web site and SEO are as effective as they can be.
- Don’t be tempted to cut back – Cutting back on marketing such as promotions, sales effort, distribution scope and R&D will simply leave you silent and blind in the marketplace when you most need to be seen and heard, and to be able to respond to market change fast and accurately.
- Automate – Automate as many back office and other processes as you can. If you can sell straight from the web site 24×7 via Paypal, or take advance orders and payment, then do so. If order taking and processing, and even payment receipts, can be automated, then do it. You need all the time you have for delivery and sales. Go find things to automate and if you can afford it, outsource those things you are no good at, or don’t do well, so that you can be most effective at what you do.
- Delegate – Don’t be tempted to believe that you are the only competent person in your organization, just because things are tough, – you are no use to your organization if you collapse from overwork or stress.
- Bail out early if necessary! Find an alternative – If your market really has died (and check very thoroughly that it really has), either stop trading as soon as you know, or find something else (possibly a variant or close cousin of what you were doing) to do instead, where there is a market.
- Preserve reputation – Whatever you do, do consider the impact on reputation – it becomes increasingly important in a recession as trust evaporates everywhere.
- Communicate – With Customers, Staff, Suppliers, Bankers and the media. Try to make it relevant and interesting even if the only message is “We are still here and still going for growth and success” – silence is often seen as having gone bust!
- Use suppliers to find business for you – Make sure that they are aware of what you do, who your target audiences are, what business you are looking for and ask them for referrals. After all the more you do the more you buy from them, no?
- Ask for referrals – Everywhere! Your clients, your customers, your bank, your network(s) (you do still network don’t you?), your suppliers, your relatives, your friends (but be very gentle with them, you’ll really need them if it does all go pear shaped).
- Continue learning and training – About marketing of course, after all you need to be up to speed on the latest techniques especially in SEO, but also about your business and your marketplace.
March 2020 Update
- Sell Knowledge – Increasingly, in recent years, and as some of us, perhaps near the age of retirement, need to step back from day to day to day engagement, there is a drive to provide knowledge and content via online automated delivery and billing. How best can you get what you do or know online?
- Sales Ladder – Create your Sales Ladder, at each stage deliver value ideally exceeding expected value to the recipient each time with an introduction to the next level.
Items Priced: –
- £10 – £15
- £100 – £150
- £1,000 – £1,500
- Content – use the slack trading periods to invent and generate online or email able content. This might be:
- Knowledge – What do know that others might value or pay for?
- How to do things – What do you know how to do or do better?
- Art – Music, Poetry, Literature, Images, Photographs
- FAQs – Choose your topics
- What else can you think of? Now is your time to be free to be creative
- Delivery/Charging Models – What models of charging or delivery will work for you? These might be: – Subscription, One off, Introductory, consultancy Mentoring, or Group Membership and I am sure that there are others!
- Tribes/Loyalty – Now is the time to build your tribe online. Let’s face it: your target audience will not be going out or be away from their homes very much and will be looking for things to fill their time and keep their spirits and skills up. How can you best help with that and build a loyal tribe for the future
Maurice T Watts – Marketing Troubleshooter Melville Marketing www.melvillemarketing.com
©Copyright Maurice T Watts and Melville Marketing, February 2012 and March 2020 all reserved