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Selling Your Services

Recession Marketing: The Rules Change

by John Quelch (adapted for power sweeping by Ranger Kidwell-Ross)
Posted in March, 2008.

The signs of an imminent recession are all around us. The spillover from the subprime mortgage crisis is weakening both consumer confidence and the consumer spending -- much of it on credit -- that has been buoying the U.S. economy.

John Quelch

In a recession, consumers become value oriented, distributors are concerned about cash, and employees worry about their jobs. But a downturn is no time to stop spending on marketing. The key, says professor John Quelch, is to understand how the needs of your customers and partners change, and adapt your strategies to the new reality. Key concepts include:

  • Brands that increase advertising during a downturn can improve market share and return on investment.
  • In tough times, price cuts attract more consumer support than promotions.
  • Company heads must spend more time with customers and employees.

Companies should bear eight factors in mind when making their marketing plans for 2008 and 2009:

1. Research the customer. Market research becomes more critical: you need to know more than ever how your customers are redefining the value they see in your sweeping services as they respond to the recession. Price elasticity curves (how many customers make a different decision for any given change in prices) are changing. Consumers take more time searching for a good value and negotiate harder at the point of sale. They are more willing to postpone purchases, trade down, or buy less.

Must-have features of yesterday become today's can-live-withouts. Trusted brands are especially valued; however, because of the higher level of uncertainty, interest in new brands and new categories fades. Conspicuous consumption becomes less prevalent.

2. Focus on family values. When economic hard times loom, we tend to retreat to our village. Look for cozy hearth-and-home family scenes in advertising to replace images of extreme sports, adventure, and rugged individualism. Zany humor and appeals on the basis of fear are out. Emphasize to customers such concepts as slip-and-fall liability reduction, keeping up the value of their pavement, and keeping their market share as consumers start shopping harder for value. Now may also be the time to upgrade your sales force if it is weak.

3. Maintain marketing spending. This is not the time to cut advertising. It is well documented that brands that increase advertising during a recession, when competitors are cutting back, can improve market share and return on investment at lower cost than during good economic times.

Uncertain consumers need the reassurance of known brands. Direct marketing, which gives more immediate sales impact, becomes a better value in hard times.

4. Adjust product offerings. Marketers must reforecast demand for each item in their product lines as consumers trade down to models that stress good value, such as having fewer options. Industrial customers prefer to see products and services unbundled and priced separately.

Gimmicks are out; reliability, durability, safety, and performance are in. New products, especially those that address the new consumer reality and thereby put pressure on competitors, should still be introduced, but advertising should stress superior price performance, not corporate image.

5. Adjust pricing tactics. Customers will be shopping around for the best deals. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts, extend credit to long-standing customers, and price smaller groups of bundled products more aggressively. In tough times, price cuts attract more consumer support than in good times.

6. Stress market share. In all but a few technology categories where growth prospects are strong, companies are in a battle for market share and, in some cases, survival. Knowing your cost structure can ensure that any cuts or consolidation initiatives will save the most money with minimum customer impact.

Large contractors in a given market area, with strong positions and the most productive cost structures in their industries, can expect to gain market share. Other companies with healthy balance sheets can become more dominant by acquiring weak competitors.

7. Emphasize core values. Although tempting to cut the workforce in order to save costs, company leaders can cement the loyalty of those who remain by assuring employees that the company has survived difficult times before. Experienced employees are needed for maintaining quality rather than cutting corners, and servicing existing customers better than ever before rather than trying to be all things to all people.

8. Company heads must spend more time with customers and employees. When money is tight, managing working capital can easily dominate managing customer relationships. The people at the top must counter this. Successful companies do not abandon their marketing strategies in a recession; they adapt them.

Invest more time in strengthening your relationships with employees, making sure they realize how valuable a part they play in keeping your company moving in the recessionary times. It's ever more important that they make every effort to provide an even higher level of customer service and work quality, since the marketplace becomes more price sensitive in hard times.

At the same time, invest more time in staying close to your customers. Make sure you understand any special needs they have and any weaknesses they perceive in the service you're currently providing. As the current provider, you're in a better position to provide exactly what they want (and can pay for) than another contractor. Don't let them switch on you because you weren't listening to what they told you, or they didn't have a close enough relationship with you to bother letting you know their new desires.

The author where the nucleus of this information was taken is John Quelch, Senior Associate Dean and Lincoln Filene Professor of Business Administration at Harvard Business School. Because Dr. Quelch's article was keyed to big business,'s editor, Ranger Kidwell-Ross, adapted the information to fit power sweeping contractors.

You may also want to take a look at a related article entitled 'Selling in a Recession: 5 Strategies for Selling in Tough Markets.'

If you have comments on this article, or new information to provide on this topic, let us know and we can add it in as an addendum to this article. (Be sure to note the web URL address for the article you're referencing.)

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