Business Marketing in a Recession

This year (2009) may be the toughest year for business for more than two generations. Most of the world is in recession and major corporations are failing. Past recessions have shown, however, that some businesses will continue to thrive. A key factor in their success will be marketing.

When times are hard, the temptation is to cut back on "avoidable" costs such as marketing. Such an approach will have an immediate positive impact on profits, but it may result in the business not surviving the recession. During a recession, marketing is vital, but it is important to use both time and money wisely; the approach should not necessarily be to market more but to market harder and smarter.

For most businesses, 80 per cent of profits come from 20 per cent of the customers. It is, therefore, important to identify the top customers and analyze how they became top customers. The priority then is to keep them and gain more just like them. Keeping them involves looking after them; there is always someone else ready to take them on. It is much easier to keep existing customers than to gain new ones.

During a recession, marketing needs to be focused; everyone is chasing a reduced volume of business. In addition, buyers tend to take fewer risks. This may mean that they opt for a "safer" tried and tested product or choose a larger established supplier. Younger businesses, therefore, need to do more to reassure buyers and build trust. Risk-averse buyers will take longer when considering a purchase and a sale may occur only after 5, 10 or even more contacts. Proper systems for managing sales leads are required.

Businesses should keep a close eye on their competitors. If a competitor cuts back on product development and / or marketing, their top customers should be identified to see if they are worth pursuing. Once a new potential new customer is identified, credit checks should be carried out before spending time and money; a buyer may be looking to change supplier because they have run out of credit.

There is no point in marketing unless it is successful. All marketing should be tested and results measured and used to improve future marketing. During a recession, such testing and measurement are especially important because money is scarce and action must be taken on a timely basis; if a marketing campaign is not working it needs to be changed quickly so that it does work.

Recessions bring out all sorts of "gurus" with new "schemes" to sell. In general, these schemes are either an existing method, reworked so that it is impossible to recognize or just crazy, but tried and tested marketing methods usually work best.

Some businesses choose to use a marketing consultant. Good consultants should pay for themselves after a relatively short while, but marketing is not rocket science; businesses that have more time than money can do it themselves. After all, the business owner should know much more than a consultant about the business, its customers and probably its competitors.

Whatever the approach to marketing, it should be planned. Recessions are usually quite short, perhaps a couple of years, so it is important that the plan includes post-recession marketing. The plan should be reviewed, and if necessary revised, on a regular basis. Planning should help to turn the recession into an opportunity rather than a threat.

Towards the end of a recession, businesses that have neglected their marketing will be weak and will have lost market share. Businesses that have continued to invest in marketing should be stronger with increased market share. Such businesses will also have gained a good number of sales leads during the recession that did not actually convert to sales, for whatever reason. After the end of the recession, these can be revisited more aggressively with a view to converting them to sales.

Businesses that view the current recession as an opportunity and plan their marketing accordingly will come out of the recession with a better customer list, an increased market share and a stronger more profitable and valuable business. They will also come to be recognized as one of the stars of their business sector and locality.