Wednesday, June 25, 2008

Staying Up in Down Times

Here in the South, we're "fixin' to" (or preparing to) enter the Dog Days of Summer...a time when the heat goes up and everything slows down. This summer we face the Dog Days coupled with an economy that by all accounts is and has been in recession. What should we marketers do?

If you listen to management guru Ram Charan, you go on the offensive. In a recent Fortune magazine article, Charan lists his four imperatives for business in a slow economy. Good advice for marketers as well.

  1. Keep building -- excellent companies cut where they have to but don't touch new product development, innovation, and brand building.
  2. Communicate intensively -- your employees are stressed, your investors are stressed, your customers are stressed. Keep the lines of communication open. More importantly, keep listening to your customers to understand their needs. If you can profitably meet those needs now, you'll be in a great position to grow your relationship with them when things pick up.
  3. Evaluate your customers -- right now, cash flow is king. Do some of your customers view you as a bank for interest free loans by continually postponing payment? Maybe it's time to let them go or renegotiate. Either way, now is not the time to prolong unprofitable business.
  4. Just say no to across the board cuts -- make cuts with a scalpel, not a chainsaw. Slow times may be a good opportunity to sell or close unprofitable parts of the business, but across the board reductions rarely work.

If we take this advice, we can help our clients weather this Dog Days economy so that they are positioned to build market share when we get to better times.