Three Recession Strategies for a Strong Business
by CSSP, Inc.
All around you, the air is filled with the sounds of despair as the economy limps forward. In the meantime, your strategy is sound, your business prospects still look good and you have decided that you refuse to participate in the current downturn. Here are three things that you should make part of your strategy in the months ahead:
1. Shop 'til you drop!
Scour the market for valuable assets. For every business like yours that is still on solid ground, there are probably five businesses that are struggling. If your balance sheet is strong and you have confidence in your business model, there is no better time to go looking for bargains in the marketplace. Based on the competitor evaluations that are part of your strategic planning process, you may suspect (or even know for certain) that a competitor is on the ropes. If there is anything about a particular player in the market that has made them an attractive acquisition target in the past, you may find that a once fiercely independent opponent is now willing to consider becoming part of the family. If your suspicions about their weakness are confirmed, you may find them to be very accommodating when it comes to terms of the deal.
Perhaps acquiring an entire business may not be the answer at this time. Be on the lookout for assets that may strengthen your hand. Prices for assets of any kind are better during hard times. This can include equipment, entire facilities and, best of all, professional talent. Executives looking for a job change during difficult times are more likely to choose the certainty and comfort of the industry they know rather than taking on a whole new business challenge. It is probably a great time to go looking for that experienced hand that you know you need to make big things happen.
2. Sell! Sell! Sell!
Re-double your efforts to find new customers. Do not let the slowing economy put a damper on the spirits of your sales team. They are likely to face a bigger challenge in hitting their numbers as customers react to the tepid business climate, but difficult times offer them an opportunity to apply their energies to building new accounts. Existing customers will be quick to tell them that orders may be slower than usual and your sales people should be equally quick to assure these customers that your company is available whenever they are ready to do business.
This should result in more time for your salespeople to visit every top prospect in their territory. Initiate contact and begin building sales relationships with these accounts. Even if your sales force has had limited success at specific accounts in the past, a prospect is most likely to consider changing suppliers when there is volatility or uncertainty in the market. Any prospect could be experiencing issues with their current supplier because of that supplier's financial difficulties. Your ability to cater to their critical needs (e.g., reliability, higher functionality, lower price, etc.) could provide the motivation to make you their new supplier.
During a recession, you should also revisit your definition of the ideal customer. It may be appropriate to consider doing business with accounts that, during a strong economy, you did not find attractive. Do not change your screening criteria for pre-qualifying accounts. Simply (and carefully) lower your threshold to expand the pool for consideration. Chances are that you will land some new accounts that will continue to be strong customers once the economy recovers.
3. Toot your horn!
Maintain your current marketing activities. If your business model is the right one for the needs and preferences of the market, then it is just as important to promote your company during business downturns. Especially if your industry position is built on real value -- delivering tangible performance to your customers -- the market may gravitate toward purchasing your kind of reliable products and services to reduce their risk of non-performance.
Resist the temptation to cut back on promotional expenditures during lean times. Typically, this is such an easy target if you are looking to reduce costs. Continuing to support your promotional and advertising efforts will help you build brand identity and support an image of strength in the market when times are tough. With any luck, you may also find bargain prices for your promotional activities as agencies and ad outlets scramble to keep their pipelines full.
Even during slow business cycles, the world does not come to a screeching halt. The wheels of commerce continue to turn and, eventually, the economy will recover. The strong business recognizes the opportunity to build share when their competition is stumbling and the market is even more acutely focused on the value that it can deliver. So shop, sell and toot during this market slowdown to enjoy long-term success when brighter times return.
Robert Bradford is President and CEO at the Center for Simplified Strategic Planning. He can be reached at