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Apr. 24, 2009
Volume 6, No. 4
 
In this issue...
 -  Managing Sales Compensation in Excel Doesn’t Make “Cents”
 -  Marketing in a Downturn
 -  Why Performance Appraisals Are So Painful
 -  Run Will Robinson, Run: Danger Signs That You’re About to Select the Wrong Agency
 -  Disrupted by IT
 -  Now…More Than Ever Retain Your CPA License
Marketing in a Downturn

By Steve McKee

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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 their heads.

Here are five strategic suggestions company leaders can embrace to ensure their organizations ride out the economic storm:
  1. 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 prophecy.
     
  2. 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.
     
  3. 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.
     
  4. 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.
     
  5. 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 smckee@mwcmail.com.

 

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