How To Gain Market Advantage In An Economic Downturn

Like a pebble in a pond, the ripple effect of a slowing economy can reach deep within a company. Typically, worries over sales lead to a halt in recruitment, a squeeze on travel budgets, tightening of inventory and slashing marketing budgets. Can your company avoid belt tightening?

More importantly, can your firm actually take advantage of others’ overreaction and gain valuable ground? The smartest companies will stay in touch with their target market, retain the most talented employees, and work with the most agile and innovative vendors.

Follow these five simple rules to stay ahead of the competition and ready your company for growth now and in the future:

Strategic Marketing Rule No. 1
Break Away From the Herd

One common error made in a volatile market is to panic and follow the herd’s direction rather than the strategies that are best for your organization. Companies that cut their marketing back to the bone when times get tough, may be pursuing the wrong strategy and providing opportunity for their competition.

Smart organizations recognize a downturn as a chance to gain market share and actually increase spending in recessionary periods. Companies who continue to implement targeted communication plans while their competitors cut back build very strong brands that they can then capitalize on when the market inevitably picks up.

For example, after the September 11th terrorist attacks, airlines and the travel industry were hit especially hard. Nearly all carriers drastically cut staff, routes and amenities. Southwest Airlines was a notable exception and looked beyond the slowdown to position themselves advantageously once the economy picked up.

Strategic Marketing Rule No. 2
Tighten Up on Targeting

Rediscover the most basic marketing concept—targeting. Read How to Identify Your Target Market—then read it again. During an economic downturn, you simply cannot afford to blanket multiple target markets with your message. Narrowly focus on only your best prospects and consistently communicate with them. Don’t forget clients need to be marketed to as well.

Strategic Marketing Rule No. 3
Be Adaptable

Successful companies are the ones that adapt well and develop an agility that allows them to respond more quickly to market challenges. Lorraine Johnson, Certified Financial Planner and Principal of Triangle Financial Advisors, says that during any economic slowdown you can count on consumers’ basic needs to continue. Food and medicine will still be in demand. Buying that new car? Maybe not. Unless, of course, it is a hybrid—an investment that will pay off in lower gas expenditures.

What do you sell that can be adapted to become an essential rather than nice-to-have? Back to the Southwest Airlines example—currently they are cutting 57 existing routes while adding 40 new flights as they focus on faster growing markets and building their business around flights that are in high demand.

Strategic Marketing Rule No. 4
Manage Your Message

Shift your marketing message to reflect the new customer mindset. Stress quality, efficiency and value and avoid luxury and status messages. An example from the past: A-1 Steak Sauce’s message that “A-1 Steak Sauce isn’t just for sirloin anymore.”

Manage marketing return on investment by building specific message measurement tactics into your marketing plan. For example, drive prospects to your web site for a special offer and measure traffic. Promote a specific line of product or set of services and measure sales results in that category. Measure phone volume, web visitors, coupon redemption, incentive use, etc. to gain quantifiable results that track back to your marketing.

Strategic Marketing Rule No. 5
Take Advantage of What You Already Own

Do you have an investment in a website that isn’t delivering a return? Focus marketing dollars on turning it into a vehicle to drive sales. Relying on search engines alone to find, crawl, index and rank your content in a way that will drive sales and improve brand visibility isn’t enough. Make the investment to promote your site in new and novel ways.

For example, a jewelry retailer promoted photos of their unique holiday stock on image sharing sites. Not only did this drive additional traffic to their site, it also provided valuable back links that helped raise their web site rank on search engines. The result was measurably higher sales overall.

Gain higher visibility for your site through blogging, email campaigns, joining in forums and discussion threads and social networking. Learn more in the article How Social Networking Will Impact Your Business.

In summary, the greatest challenge in a down economy is how to use all available resources in the most efficient manner to mitigate the impact on your business. The typical knee-jerk reaction of cutting budgets indiscriminately may not be the best answer, and in fact may have a much greater cost to your business over time. As experts in marketing strategy aimed at delivering solid results, Strategic Guru can help you make the right choices for effective marketing.

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