Economy coming out of recession… are you?

There are indications that the world is slowly coming out of recession and companies globally are hoping to regain lost momentum. India, in fact, has outperformed predictions and is looking at a robust growth in 2010-11. While some may not, most companies will manage to survive this slowdown and some may actually come out stronger!

This does not sound very surprising if you look at some fundamental stuff that companies do, or should do, in a slowdown. Any company that engages in consolidating its market share and focuses on long term goals during a slowdown, is actually taking a step forward rather than cutting back.

So what type of companies will come out stronger? What do you need to do so that your business too improves with improving market conditions? Here’s my list;

Value proposition – Additional value offered to customers, rather than discounting price, will not only keep them motivated to be loyal but also help in retaining your margins and increasing your goodwill.

Costs vs. efficiency – Most of the focus is obviously on cutting costs, but there is a real danger of losing your competitive edge if you stop or marginalize activities that affect your customers’ overall experience. Many companies that stop marketing completely are at a risk of losing their ground; the focus should rather be on improving marketing efficiency.

Engagement with customers – Only your customers can tell you if they are, and how much they are likely to use your product or service. Market conditions for you will improve only when your customers’ confidence improves, so discuss these broader issues with them.

Efficiency analysis – Review various business functions and run marketing analytics to fill holes that may be causing leaks in your resource pool.

Manage relationships – It is very important that your vendors do not run out of business and your employees don’t lose motivation during trying times. You will need them to gain momentum once the markets are looking up.

R&D and innovation – Some amount of resources can be moved to research and innovation. For instance, you may not spend so much on sales and promotion and instead channel some of these resources to develop new capabilities or improve on existing ones.

Marketing in recession?… or just smart marketing

Read many articles and saw some presentations on ‘marketing in recession’. The essence of it all is that marketers have to be smarter while spending and use innovative and cost effective ways to reach out to their customers. There are many suggestions on how that is to be done and I wont get into that. Most of these blogs and slideshare ppts are right, the focus should be on innovation, creativity and cost efficiency. My question is this… why should that be during a recession only???

Even in a booming economy start ups fail and market shares change. Better product delivery, creative & cost effective communication and innovation in business management by competitors will create an improved overall customer experience… and customer loyalties will shift.

The key is to have strong business fundamentals, clear business vision and an enduring focus on achieving the goals outlined. A well defined long term business vision inspires efficient business management and complete costumer care, regardless the market conditions and creates an environment that is insulated from externalities such as the current recession. To think, this recession is also an outcome of consistent, systematic pursuit of short term goals by some of the largest institutions in the world.

Although, the impact of recession affects all businesses no matter how they are managed, it is minimal on businesses who have been doing smart things in innovative ways, even in good market conditions.

Continuous creation of real value, regardless of short term impact, is the only real sustainable business model.

Saurabh Shroff