|Marketing in a Downturn
The numbers. Corporate leaders are worrying about them more than ever. When the
top line dips (or in the current environment, dives), the bottom line goes with
it, accompanied by disappearing cash flow and credit availability. Trying to
manage the crisis is keeping every company’s CEO, CFO and CMO up at night.
I have learned from managing my own business that staying on top of the numbers
is essential. But it’s also important to keep in mind that while a company can
cut its way to survival, it must grow its way to success. That
makes marketing more important than ever. As we all work our way through and
eventually out of this dismal economy, the spoils will go to those who keep
Here are five strategic suggestions company leaders can embrace to ensure their
organizations ride out the economic storm:
- Be prudent, not paranoid. Economic bubbles come and go, and while
this one is particularly challenging, it, too, will pass. Every corporation
needs to watch its cash, trim where it can, and when necessary, make drastic
cuts. But no company can be managed only by the numbers. If fear of failure
causes management to cut too deep, that fear can become a self-fulfilling
- Spend little; invest much. You can always tell how a corporation
views its activities by the prepositions its leaders use. There are many
things on which a company spends that can be cut back; there are a
few things in which a company invests that should be protected at all
costs; marketing and R&D are among them.
- Look down the road. Evidence from past downturns shows
companies that maintain their marketing investments may or may not
outperform their competition during a recession; however, they grow more
quickly when the economy picks up. By sustaining a consistent voice,
forward-looking companies continue to build equity, and at a faster clip
than their competitors that have cut back.
- Stay focused. Any company that has a track record in business has
been doing something right. Now is the time to deepen its core competencies,
not search for silver-bullet solutions outside of them. Even worse, is
chasing business through discounts. It’s hard for any company to go wrong if
it’s focused on two things:
1) Increasing the loyalty of its best customers; and 2) finding more
prospects that fit the same profile.
- Huddle up. Research my firm has conducted among more than 700
corporations across the nation shows that how a company thinks is
much more significant than what happens to it when growth stalls. When times
get tough, differing perspectives within the management team can get
magnified as each person copes in his or her own way with the crisis. That
can lead to challenging, and even, paralyzing disagreements. It’s important
to keep everybody on the same page.
Stalled growth is the rule, not the exception, even in the best of times.
There’s a great deal we can learn from companies that were once down but
returned to the growth curve. If your struggling counterparts seek your counsel
about where to go from here, share with them the lessons of those who’ve learned
the hard way. You’ll not only be helping them prosper, you’ll be helping your
own business as well.
About the Author
Steve McKee is president of McKee Wallwork Cleveland Advertising, a firm that
specializes in helping struggling companies rekindle growth. He is the author of
the recently published book, When Growth Stalls (published by Josey Bass). Steve
can be reached at email@example.com.