Ten working days into the New Year and there appears to be little sign of the recessionary storm clouds disappearing over the horizon. Newspapers full of job losses, house for sale signs gathering cobwebs, the strength of the pound becoming something of a joke, end of year pension statements causing wrinkles.

All of it gives business strategists, marketing managers and even financial directors food for thought at a time of year normally reserved for vibrant optimism and renewed energy. But what level of optimism do you plan for?

“This time next year Rodney, we’ll be millionaires”

The vibe out there at the moment is one of cost-cutting, downsizing, outsourcing and at best consolidating. But is this the way to steer even the most unsteady ship through these rather murky waters. It might keep you afloat in the short term but is it the right long term recipe. For a minute, let’s look at the positives of the situation most of us outside Abu Dhabi are in.

Though companies are dropping like Audley Harrison, it’s generally the weaker performing ones in most sectors who are feeling the pinch. Woolworths and MFI were sitting ducks in any economic climate. Clearly there are some sectors just struggling across the board but you show me someone who has any sympathy for greedy bankers and I’ll show you a Brazilian who wants to play at Man City for anything other than money.

Closer to home, the couple of agencies we’ve heard have closed doors or run into difficult times weren’t really upto that much anyway. Wheat and chaff situation in other words. Clearly they had ‘positional’ issues as has been much cited in Woolworth’s case.  In essence, poor performers are being squeezed out, opening up market share for more efficient operators. So when the good times roll again and the total market spend increases, the companies at the top of the tree should actually be better off than pre-recession.

Secondly, it’s an appropriate reminder to all business managers who’ve been complacent about people, performance, rising overheads and so on, for far too long, hiding behind a falsely inflated economy.  If you’re only waking up to obvious deficiencies in your business model now, you’ve really only yourself to blame. It may be too late but if it’s not, you’ll probably learn a lesson or two along the way and resolve to improve in the future, whether or not you’ve had a kick up the backside.

Back to the word ‘positional’ and this is my key point. If you are going to react now by cutting costs, squeezing margins and readily entering charge out negotiation with either consumer or client…I think it’s a slippery slope to be on.

“He who dares wins Rodney…that’s my boy”

Try this. Hold your prices, review your own costs (without putting your whole supply chain out of business). Those suppliers that agree to cut costs were never really that good in the first place anyway, so find someone better. Those that say no will inspire you to do the same. Then look at your market share. If the market is dwindling clearly you need to increase share. How? Entering price wars with everyone else, offering service levels you can barely maintain when quiet, throwing in a cuddly toy. Nope. Try ‘brand differentiation’. Something that works on all levels. Elevate your offer, position yourself away from the crowd, do something different, enter deeper more meaningful relationships with your audience, start a new dialogue.

Then play safe with the most targeted and effective communications your marketing budget will allow. This is not time for wishful thinking but measurable campaign activity and brand building exercises. Those companies that differentiate themselves now and work hard at getting the right message in front of the right audience will be left standing, holding all the trophies when those rays of economic sunshine start to beam down again. Those that are intent on hiding under the nearest rock while it rains, unfortunately won’t even know when to come back out. They’ll still be there while the rest of us are slapping on the lotion.

“Lovely Jubbly”

Tags: brand building, differentiation, effective, linked in, marketing budget, planning, recession

This entry was posted on Saturday, January 17th, 2009 at 1:45 AM and is filed under Opinion. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.