Five ways your business can beat the downturn

Businesses determined to beat the current downturn should study the activities of companies during tough trading conditions in the 90's, says a PIMS* report. The research reveals that recession-proof businesses were those that increased market share. The difficult decade's big winners succeeded when others failed by investing-in rather than cutting-back on marketing spend.

Nike's profits rose nine-fold coming out of recession

In fact, a bold move by Nike to triple their investment in marketing resulted in profits that were nine times higher as recession receded than before it began. And Nike are not alone. Businesses that increased marketing spend averaged 4.3% return on capital employed, compared to 0.6% for those that maintained marketing spend and -0.8% for those that cut. Overall, serious marketeers performed better than the average business by more than 250%.

Communicate regularly with your customers

Fireband's Michael Dale says developing a new strategy is vital: "Make sure you continue to communicate regularly with your customers, this is a crucial time to build customer loyalty. When doing so, focus on brand differentials. This is the time to repackage offerings and use incentives - customers want to stay loyal to their preferred brands but will look to time their purchases. Maintain product launches as they'll receive greater visibility when your competitors are laying low. And, finally, don't forget to measure the effectiveness of your marketing by building response mechanisms in offline campaigns and analytics for online activity."

Five tips on how your business can beat the downturn

1. Build customer loyalty

Keep a dialogue going. Grow relationships with existing customers by sharing knowledge and providing relevant information, offers and news using e-newsletters or mail communications.

2. Use the strength in your brand

In times of recession customers take less risks and consequently revert to brands they trust. There is never a more important time to focus on your key brand differentials in all communications.

3. Measure the effectiveness of your marketing

Build response mechanisms in to offline campaigns and analytics in to your online campaigns. Analyse and compare the responses to determine your future strategy and achieve better returns.

4. Repackage offerings and incentivise your customers

Only 10% of customers are motivated exclusively by price**. Most want to remain loyal to their preferred brands but will look for offers or promotions to time their purchases. Give them the opportunity to do this.

5. Maintain product launch programmes

New products and services will receive greater visibility when there is less 'noise' in the marketplace, therefore raising their profile at a lower cost.

* Profit Impact of Marketing Strategies.
** WPP Brandz Database