What many experts have known for months, if not the past year, is that our country is officially in a recession. In fact, the National Bureau of Economic Research announced in December that we have actually been in a recession since December 2007. Many business owners probably knew this long before the Bureau’s announcement, feeling the effects of customers’ budget cuts, a higher level of anxiety within the industry, and simply an overall gloom and doom mood, no thanks to the media’s contribution 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 Bureau defines an economic recession as “a significant decline in the economic activity spread across the economy, lasting more than a few months, normally visible in real GDP [gross domestic product] growth, real personal income, employment (non-farm payrolls), industrial production, and wholesale retail sales.” With the Big Three automakers looking for government intervention and Wall Street receiving its own government bailout, most of us don’t need a textbook definition. We’re living 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 pull out of their investments- simply out of sheer panic or the scariness of the unknown. It’s a knee-jerk reaction however the response simply compounds the problem – which is exactly what you will do to your own business if you panic and pull back on your marketing efforts during these tough economic times. Let’s look at some things to consider as you re-adjust your marketing plans for the short term.
1. Avoid being reactive, which will cost you money. It’s a natural response to want to pull back on anything and everything that you don’t deem a necessity during a recession, but doing so will literally take you and your business off of the map, and possibly close to extinction. It is critical for you to portray an image to your customers that you are remaining calm and keeping a clear head during these times. Remember, your customers will look to you for support and advice in order to keep their business afloat. You want to be a resource for them, as you’ve always been, not someone who’s jumping ship and reducing all of your marketing and promotion to save a few bucks. Cutting back and reacting to every bit of news that comes your way regarding the recession will only reinforce the panic that may exist with your customers. Stay the course and think before making any decisions.
2. Communicate with your customers to let them know you’re a stable VAR that will outlast the crunch. This tactic is really a follow-up to number one. Through constant, clear communication, you need to show and tell your customers what you are doing in order to avoid conjecture as to your stability. Demonstrate why you are the VAR that will outlast the competition. What makes you unique? If you start slashing your marketing budget, you will have no 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 areas most typically cut during tough financial times is the travel budget. Let your customers know you have solutions that will offset their need to travel less. Create webinars and teleclasses that allow you to communicate valuable information to your customers, positioning yourself as a leader in the industry. This small marketing expense for you will win accolades with your customers. It’s simple to do and gives you an outlet to keep the lines of communication open.
3. Whatever you do, don’t slash prices! Again, this is one of those knee-jerk reactions that becomes an epidemic and a very bad cycle to get in to. 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 brand. Instead, look for value-added extras, so that you don’t have to cut your prices but your customers believe they’re getting more for the price. Leverage your affiliates and partners. See how you can work together to create promotions and deals that give show your customers that they’re getting more for the same price they’ve always paid.
Marketing during a recession actually calls for you to dig deep into your business and commit to the fact that you are not going to cut back on programs and promotions – and will not cut pricing. Now is the time to focus on your brand and what that brand says to your customers. What are your core 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 flux, you are stable with your products and ideas. Steer clear of price cuts, and don’t cut quality just to save a few dollars. If your reputation was built on good, quality products and services, compromise will only devalue your brand, creating a costly rebuilding effort later. There is an end to this recession and you want to come out shining on the other side.