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7 Ways to Grow Business During Recession
Survival of the fittest is the key to success during recession. Here are 7 strategies to endure the tough times.
Wed, 12/02/2009 - 10:35 by Ishita Sood
Recessionary time is not the best time to cut marketing spending. It is, in fact, advisable to focus on one’s brand to have a strong name in the market. Recession brings with it problems like high taxes, low profits, sharp and sustained losses, bankruptcies and suicides. There is a temptation to pretend that it is only a temporary phase--and will go--but it is not. So when the inevitable happens, one is advised to make business “recession proof”.
Recession and Guerrilla Marketing
During recession, it is advisable to go for “Guerrilla Marketing”.
The term "Guerrilla Marketing" was coined by Jay Conrad Levinson. It simply means promotion of business through imagination, time, and energy and not big marketing budgets. Business comes from referrals, publications, and other unconventional methods.
Guerilla marketing focuses on keeping a balanced marketing portfolio, and does not rely on just one strategy.
1. Maintain a Good Cash Flow
During times of recession it is very important to have a regular cash flow. There are various ways to improve the business' cash flow.
Firstly, it is important to push the sales to increase revenue. Collecting receivables on time and clearing out pending bills is an important way of increasing cash flows.
It is essential to avoid purchase of capital assets at such times as they require huge amount of capital.
One must also keep at least 3 months’ cash reserve to meet contingencies, since no one knows when the recession will end.
2. Increase Marketing Activities
Recessionary time is not the best time to cut marketing spending. It is, in fact, advisable to focus on one’s brand to have a strong name in the market.
Also, one should target the competitor's customers to gain market share. Sales promotion is a good marketing gimmick to attract customers.
3. Improve Distribution Channels
It is prudent to be open to possibilities of other business channels that are more receptive to the needs of the business.
Negotiation with current channels may not be as advantageous as that with newer channels. But maintaining the present channel is necessary at such stages for cost competence.
4. Build Employee Loyalty
Employees are an integral part of the organization. Having a good relationship with them is essential for the company's future. This will make the employees value and trust the organization.
For growth of the company, employees’ morale should be kept high. Providing them with adequate training, benefits, and development facilities is very essential.
5. Acquisition and Mergers
The recession brings with it a lot of scope and opportunity for expansion. Since the key element during these times is survival, the business must understand such needs and take decisions accordingly.
Mergers and acquisitions are a good option, as they not only help in expanding wisely but also reach out to competent advisors. But, a word of caution, business must take acquisition decisions according to available resources.
6. Understand Customers’ Values
The needs of customers and clients must be studied well. The customers appreciate tailor-made products and creativity. They also appraise out-of-the-box thinking for any product.
These will help in retaining existing customers and attract new ones.
7. Ask Referrals from Clients
Competitors often neglect clients during such times and give more importance on modifying business. Such golden chances must never be missed.
The best way to attract customers is to spend more time with existing customers. This is because in times of uncertainty, clients who believe in the services of a firm will always recommend it to others.
Doing the above can help a firm understand how to sustain during recessionary times.
