Why You Should Gear Up Your Marketing in a Slow Economy

By Anne Bailey Berman

You’re concerned. Revenues are down. Things had been going so well, but with the state of the economy, you’re now feeling the pressure. “The market is just not buying now, so let’s cut discretionary expenses until the market bounces back,” you think. Right decision? Probably not.

The marketplace has slowed, not died, and customers and prospects still need to buy products and services. The way to succeed in such an environment is by becoming finely attuned to the market’s requirements. Although costs are tied to gaining the market insights that can help optimize your effectiveness, the costs of inaction could prove much higher.

So what’s the prudent strategy? Here are some considerations:

1. Avoid giving up ground. Across-the-board cuts in marketing efforts may open doors for aggressive competitors. When they penetrate your market share, you will find yourself in the position of having to win back your own customers when the economy rebounds and you’re ready to ramp up again. A declining economy is the ideal time to aggressively capture new, desirable customers. The only question is the role you will play relative to your competitors: hunter or prey?

2. Zero in. To paraphrase a well-known axiom, a roaring economy can cover a multitude of sins. During the boom years, customers—both businesses and consumers—were willing to overlook many of those sins. As the economy declines, customers, affected as much by the change as you are, are significantly less inclined to overlook your shortcomings. They are much more likely to ensure that they get exactly what they need for the dollars they spend. Such elements as pricing, service, targeting and product configuration, if not totally attuned with your market, may direct sales to other suppliers. Therefore, issues of competitive differentiation, customer requirements and appropriate standards should be paramount.

3. Understand customer-perceived value. Value does not necessarily mean lowest price. In this context, the term “value” means the elements you offer that cause prospects and customers to accept your offerings. Consequently, you need to determine exactly what your customers value and then focus in on those customers for whom you can provide the necessary value most effectively. Essential elements of value for one segment will be different from those for others.

4. Focus resources on the niches you can serve well. When revenues start dropping, there is a tendency to try to be all things to all prospects—to significantly broaden your market focus. But this is actually a time to focus on market efficiency and effectiveness. Could your company provide effectively to the entire marketplace in a booming environment? It’s even more difficult in a downturn. Target those niches for which you know you can properly align your products and services.

5. Prepare for the recovery. When the market reemerges from its cave, be the first in your competitive set to greet it. Only through gaining market insights, now, can you be prepared to quickly take a leadership role when your customers and prospects are ready to take more aggressive stands in a revived marketplace.

6. Conduct innovation efforts with substantial market insights. Don’t assume that customers’ values today are the same as they were yesterday. Product-innovation efforts are expensive at any point, but in times like these the price of failure has a far greater impact. If you’re moving forward with product development in this environment, reducing your risk through accurate, credible market information is essential.

If you gear up your marketing in a slow economy, you’ll be well positioned for success when the next boom comes. But be smart about it. Before you move, get all the information you need to make informed decisions.

For additional information, consider these AMA seminars:

• Competitive Strategy: How to Develop Winning Marketing Plans and Breakthrough Strategies
  
• Fundamentals of Marketing: Your Action Plan for Success
  
• Customer Service Excellence: How to Win and Keep Customers
  

Author Bio: Anne Bailey Berman is co-founder and president of Chadwick Martin Bailey, Inc., a Boston-based market strategy firm. For more information, Ms. Berman can be reached by calling 617-350-8922 or by visiting www.ChadwickMartinBailey.com