Recession? Refuse to participate!
With all signals insisting on an industrial sector recession, I am reminded of a comment made to me during my very first interview at my first newspaper job. I was doing one of those “pulse of the community” things, where the reporter asks various business owners how they feel about the economy. The George HW Bush recession was just spooling up, retirement savings were being wiped out as high-interest CDs were rolling over at pennies on the dollar, and “Read My Lips” was only months away from “It’s the economy, Stupid.”
I walked into a shop on Main Street, introduced myself as the new reporter in town, and posed my silly-sounding question. The shop’s owner, a grizzled old fella who made it clear this was not his first rodeo, told me he wasn’t concerned about the prospects of recession at all.
“You want to beat a recession” he asked me. “Easy. Just refuse to participate.”
I wanted to argue with him, explain that his refusal to acknowledge outside forces does not in any way negate said forces. But there was something about his insistence, something about his self assurance that screamed “trust me, I’ve seen this more than a few times.” And today, with decades and a few recessions under MY belt, I finally get it.
Recession is just a way to measure state of mind.
This isn’t to suggest that economies, or industries, or market segments, don’t contract. Fact is, while some manufacturers and distributors are insulated from economic downturns to some degree, they all face the challenge of positioning their products for the marketplace. And when your products are seen as commodities… well, let’s leave the low-margin talk for a different blog post.
The bottom line is that even relatively well-insulated organizations are subject to supply chain disruption, cash flow issues and poor public perception – and none of those require some economist to declare a sector-wide slowdown.
“Refusing to participate” sounds great. But how do you simply not participate in the world around you? How do you navigate economic downturns in a business-as-usual manner when all around you it is clear that nothing is “as usual”?
Maybe it’s too simplistic to say “refuse to participate.” Maybe I should rephrase and say “participate differently.” Or, better still, “participate smarter.”
Look, doing what everybody else does will get you exactly the same results everyone else gets. Doing the same thing over and over while expecting a different result is, well, let’s just say that isn’t a road to success, either.
So, how do you “refuse to participate” in a recession?
Step One. Make sure your customers KNOW you’re not participating in a recession.
Marketing is often the first casualty in tough times when, ironically, it can be the thing that makes the most difference during tough times. But if you don’t invite your customers to the party, how will they even know there IS a party?
Step Two. Get smarter about HOW you participate.
Social marketing, pay-per-click, email, a mobile-friendly website with great SEO and compelling content – these are just a few lower-cost high-visibility force multipliers that can drive your marketing message to your exact audience while saving your company time and money – both resources you cannot afford to squander during tougher times. Developing an inbound marketing strategy is key to keeping the workflow going.
Step Three. Don’t manage to the margin.
I know some folks will disagree with me here – and that’s fine. But I’ve seen factories fall apart over a penny or two per pound. If you’re operating at 80 percent capacity and the machinery is running more or less full time, sure, hold the line on price. But furloughing the workforce to maintain margin could cost you much more in the long run. Replacing well-trained employees costs a lot. Spinning up closed lines costs a lot. Making customers wait while you get things re-organized costs, well, you get it.
Step Four. Tell the world about your Next Big Thing. If there isn’t one, come up with one.
Just because you don’t have a new secret sauce to advertise doesn’t mean you don’t have a new secret sauce to advertise. Change the wrapper. Change the way you phrase your tag line. Focus on a different benefit. Find an off-diagonal benefit to your product that might, with a different label, appeal to a whole new customer segment.
Step Five. Go back and re-read steps One and Two.
And feel free to give me a call if you’re still not sure.