You may have heard recent speculation of an anticipated downturn over 2008 for UK business, and are possibly concerned about how to keep your head above the water this year.
BBC News have reported this month that according to Merrill Lynch, one of the worlds leading financial management and advisory companies, the US have already hit their recession, however this has been disputed by NBER (National Bureau of Economic Research) president Martin Feldstein.
In the UK only 44% of business leaders said they were ‘very confident’ about expected business performance in 2008 compared to 2007, when 50% reported confidence according to a report by Price Waterhouse Coopers.
I’m not personally one to take great stock of what one hears in the news as they so frequently get it wrong, however what will you do this year if you find your business struggling to perform?
Customer Reaction: If there is a recession how do you think your customers are likely to react in terms of their spending behaviour? If you have an idea of their reaction, or even better than that you know what their reaction will be (from your research), you can have plans in place to work with that behaviour.
Value: Work on your value proposition. This has been covered in ‘Avoid Competing On Price‘
Manpower: How does your skillset compare to your competitors? Are you falling down in areas that make your competitors a more attractive proposition? How flexible is your workforce in terms of your ability to increase or decrease it as demand fluctuates. Ideally you don’t want to waste money on workers sitting twiddling their thumbs when sales are lean.
Marketing: It’s a common error to reduce marketing efforts in an attempt to cut costs at the onset of a recession, but it is wise to avoid wasting money on marketing efforts which may not be fruitful. A recession is a time to assess your strengths and use them to leverage more market share, and also to address any weaknesses that will render your marketing efforts less effective.
One way to get more out of your marketing is to improve your conversion rate by ensuring your marketing is firstly very targeted – i.e. using your brain rather than your brawn (money), tap into your existing customer base, and improve your cross selling techiques to increase the value of each sale.
Spending For Success
Rather than cutting marketing costs during a recession one could consider that a recession may be the ideal time to spend more on your marketing.
Whilst your hapless competitors are slashing their marketing budgets in a hare trigger reaction, what better time to grab a bigger share of the market by being prominent by comparison.
What are your plans if 2008 is a lean year for business? Do you have any specific plans in place to combate a recession? I know I don’t! However in a recession the last thing I’m going to do is let up on marketing time/spend.