Market Growth During a Recession

Not getting this information sent to you directly? Sign up for your FREE monthly Smartmanager newsletter today.   Sign up now! 
---------------------------------------------------------------------------

Four Strategies for Market Growth During a Recession

Many Companies Downplay Market Growth in Down Economies

The executive mindset during recessions often focuses on survival techniques, not market growth. While a natural, understandable tendency, those organizations, which target growth, usually strongly disagree with this strategy.

They correctly point out that adopting a “bunker” mentality seldom generates exciting, positive results. There are many examples of companies succeeding with growth strategies during down economies. Conversely, there are few statistics displaying failed companies using this strategy.

Yet, the majority of senior executives find it challenging to discard the survival mode in favor of creative market growth action plans. This is not just a “comfort zone” problem. Few experienced C-level executives are comfortable functioning in a bunker, survival mode. Successful businesspersons are usually more comfortable exercising command and control in attack mode versus adopting a purely defensive posture.

However, the natural fear and uncertainty a recession generates causes many companies and senior management to suppress their natural marketing aggression and emphasize defensive protection activities. Those organizations that fight through this tendency and focus on market growth can often achieve extraordinary results.

The key factors: Outside the box thinking and high creativity. Even those senior executives that are not confident in their outside the box and creative thinking can find that they can pleasantly surprise themselves. Discarding the dire predictions of the economic “talking heads” in the media, C-level executives often generate some wonderful, successful ideas.

Here are some proven suggestions for market growth strategies during a severe down economy. Consider using one or more of these ideas to improve operations results during these difficult periods.

Effective Goals During Recessions

While always valuable, these goals become more significant during down economies.

• Retain key clients and customers. Many companies believe they must locate new customers during down economies. Recessions make this a difficult target to hit. The universe of potential customers has shrunk, as have discretionary dollars to spend on your products and services. Concentrate on retaining the key customers you already have first.
• Generate higher profit margins. While always a challenge, it’s difficult to achieve higher margins by raising prices during down economies. Often, increasing cost controls—not necessarily slashing operating expenses or people—achieves this goal.
• Create new income streams. Outside the box thinking can generate new income stream ideas. Think about complementary products and services, new ways to sell and promote current products, and/or creative pricing that opens new income possibilities.
• Increase and improve performance. Always a worthy goal, its importance becomes magnified during a recession. Even if senior management adopts survival mentality, improving performance is critical.

Four Strategies to Achieve Market Growth

1. Improve processes, particular solution-related answers. During recessions, many companies are reluctant to change from previously successful packaged or one-size-fits-all products and marketing. Understanding that perception equals reality, executive management should seek to design real or perceived individual customization to appeal to current and potential customers. Both processes and marketing focus may need changing, but the results may be wildly successful.
2. Change value targets and modify your message. During strong economies, marketing can focus on features and achieve success. As customers and income volume declines, changing targets to emphasize real benefits can achieve market growth. As the focus of your customer base moves to pessimism, targeting your message towards your products’ benefits typically registers much more strongly. Concentrating your message on benefits emphasizes reasons that customers should stick with or change to your products before selecting options from your competition.
3. Maximize customer communications and service. Establishing more customer intimacy will help retain key clients during recessions. Depending on your products or services, even C-level executives should consider establishing contact with the customer base. Creating as much “personalization” as possible is time and money well spent during these difficult periods.
4. Support the sales force to better sell solutions, not features. Whether your sales force maintains one-to-one relationships, is concentrated in a local or global call center, or markets through electronic communications, equip them with training to sell solutions, not features. Just as you should consider changing your targets and message, as noted in suggestion number 2, your sales force should adopt a benefits-first approach to current and potential customers. Recessions usually reduce customer and dollar volume, creating more intense competition. Success comes from stronger, more effective messaging with a better armed sales force.

Resist the temptation to head into the bunker; instead use your creativity. Try to achieve market growth, not mere survival. Consider these suggestions for goals and strategies as a base for encouraging your own executive creativity. You may conceive other, equally successful, ideas that your company can adopt to attain a market growth objective during the deepest of recessions.