Recessions create opportunity – will you take advantage?

Posted by Jeremy L. Knauff | February 27th, 2009

In a capitalist economy, the markets will rise and fall, and it’s not a zero sum game, meaning that there is not a finite amount of opportunity to go around. In fact, the opposite is true because the products or services that company provides create additional opportunities for others.

During the lean times like those that we’re facing now, most markets experience major changes. Many companies will see their revenue drop to levels that force them out of business. Some will button up and do everything they can think of to conserve their existing cash. Others, in an attempt to increase their revenue, will try to be all things to all people in hopes of being able to serve more prospects.

These strategies are based on fear and almost never work. On the other hand, the companies that do succeed during challenging times are the ones that take a totally different approach and create opportunities that their competitors overlook.

When your revenue drops dramatically, it’s critical to stop the hemorrhaging as quickly and effectively as possible, but that shouldn’t be the end all answer. Simply ceasing spending is a bad idea, especially since one of the first things that people cut is their marketing. You can’t stop your marketing with the intent on starting it back up when revenue starts coming in again. Think about it like this; would you wait for a campfire to get hot before you added wood to it? Of course not because until it had the wood to burn for fuel, there would be no fire. If you’re not marketing your company, your revenue simply will not increase. You should use the time that your competitors are hiding their head in the sand as an opportunity to increase your marketing, allowing you to increase your market share and when the economy picks back up, increase your marketing leverage exponentially.

Trying to be all things to all people is another fatal flaw. On the surface it seems like a good way to increase revenue because while a prospect may not want or need your Elvis Bobble head dolls, they may be interested in an electric guitar, a smoke machine or even sequin covered pants, but what do you tell people when they ask about your company? We sell this and this and this and this and this? People get confused and frustrated when faced with a company like this. You will waste a tremendous amount of manpower and marketing efforts in this situation, however if you focus just on Elvis memorabilia, you can explain your company in a sentence or two and you’ll know that your prospects are looking for exactly what you offer, giving you the opportunity to reach a very targeted market.

What you should be doing in times like this is taking a close look at your company, your industry and your competitors. Look at how everyone is reacting to the economic challenges, and as a result, what consumer needs are they overlooking or ignoring? What products or services are they offering that consumers don’t value? Position your company to fill the needs that aren’t being met and omit the services or products that aren’t necessary. Find ways to increase your marketing while keeping your costs as low as possible. Your progress will come in baby steps while times are tough, but that progress will almost explode when the economy gets back on track and you’ll be well ahead of your competitors.

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1 Comment »

One Response to “Recessions create opportunity – will you take advantage?”

OrangePoint.net
February 28th, 2009 at 9:19 pm
I agree with your statement about taking a close look at your company, your industry and your competitors to see what they’re doing. This the only way business owners are going to survive in this tough economy.