Marketing in a recession
What many experts have known for months, if not last year, is that our country is officially in recession. In fact, the National Bureau of Economic Research announced in December that we’ve actually been in a recession since December 2007. Many business owners probably knew this long before the Bureau’s announcement, feeling the effects of client budget cuts, a higher level of anxiety within the industry, and just a pessimistic and fatal frame of mind, not thanks to the contribution of the media as well. But what exactly is a recession, and how will it affect your overall business strategy, and more specifically, your marketing plans for the next six to 12 months?
The Office defines an economic recession as “a significant decline in economic activity that spans the entire economy, lasting more than a few months, normally visible in real GDP. [gross domestic product] growth, real personal income, employment (non-farm payroll), industrial production, and wholesales retailing. “With the Big Three automakers seeking government intervention and Wall Street receiving its own government bailout, most We don’t need a definition textbook. We live in a recession on a daily basis.
When Wall Street began to spiral out of control in the summer of 2008, the natural instinct of most people was to withdraw from their investments, simply out of sheer panic or fear of the unknown. It’s a knee-jerk reaction, yet the response simply compounds the problem, which is exactly what you’ll do to your own business if you panic and back down from your marketing efforts during these tough economic times. Let’s look at some things to consider when readjusting your short-term marketing plans.
1. Avoid being reactive, which will cost you money. It’s a natural response to want to retire anything and everything you don’t consider a necessity during a recession, but doing so will literally knock you and your business off the map and possibly near extinction. It is critical that you show your clients a picture of being calm and clear-minded during these times. Remember, your clients will come to you for support and advice to keep your business afloat. You want to be a resource to them, as you have always been, not someone who is jumping ship and cutting back on all your marketing and promotion to save a few bucks. Reducing and reacting to every news that comes your way regarding the recession will only reinforce any panic that may exist among your customers. Stay the course and think before making any decisions.
2. Contact your customers to let them know that you are a stable VAR that will survive the crisis. This tactic is really a continuation of number one. Through clear and consistent communication, you must show and tell your clients what you are doing to avoid guesswork about your stability. Show why it is the VAR that will outlast the competition. What makes it unique? If you start cutting back on your marketing budget, you won’t have any point of difference to share with your customers as to why you do things differently and why they should trust you during these uncertain times. Creative communication can also position you as a resourceful VAR. For example, one of the most frequently cut areas during tough economic times is the travel budget. Let your customers know that you have solutions that will offset their need to travel less. Create webinars and teleclasses that allow you to communicate valuable information to your clients, positioning yourself as a leader in the industry. This small marketing expense for you will win praise from your customers. It’s easy to do and gives you an outlet to keep the lines of communication open.
3. Whatever you do, don’t cut your prices! Again, this is one of those knee-jerk reactions that turns into an epidemic and a very bad cycle to get into. It’s natural to want to cut your prices to encourage your customers to buy from you and not your lower priced competitors, but doing so simply exposes your desperation and also permanently lowers your street prices, ultimately devaluing your Mark. Instead, look for value-added extras so you don’t have to cut your prices, but your customers think they’re getting more for the price. Take advantage of your affiliates and partners. See how you can work together to create promotions and offers that show your customers that they are getting more for the same price they have always paid.
Marketing during a recession actually requires you to dig deep into your business and commit to the fact that you won’t cut programs and promotions, and you won’t cut prices. Now is the time to focus on your brand and what that brand says to your customers. What are your main products and points of difference that make you shine? Communicate these aspects to your customers and let them know that even during a time of constant change, you are stable with your products and ideas. Stay away from price cuts and don’t downgrade just to save a few dollars. If your reputation was based on good, quality products and services, the compromise will only devalue your brand, creating a costly rebuilding effort later on. There is an end to this recession and you want to come out shining on the other side.