Tuesday, December 9, 2008

Three Keys to a Recession-Proof Business

We are all concerned about the economy, of course. There are some common sense steps you can take to continue your business success. My friend, Marcia Yudkin, presents three ideas here:

Three Keys to a Recession-Proof Business

by Marcia Yudkin

“It’s the economy.” Are you putting up with a drop in
revenues because of the economic downturn? In fact, a
worldwide financial crisis does not have to send your own
business into a discouraging spiral. Smart business owners
and managers minimize the damage from a business slowdown
with three crucial strategies.

1. Diversify. Beware of depending too much on one, two or
three clients. Never allow your prosperity to get tied too
closely to the fortunes of a very few others – no matter
how stable and healthy these organizations seem. If they
suddenly hit the skids or if they just get sold and their
leadership or direction changes, you could be in deep
trouble. Protect yourself by keeping at least four active
clients at all times.

The same goes for your product line and promotions, where
an overly narrow focus also puts you at risk. Some years
ago, I had a financial planning expert whose whole
marketing funnel depended on beating the estate tax. When
Congress suddenly changed the estate tax, he had to
recreate his business.

If you sell services, you can hedge your bets for a bad
economy by developing information products, which offer a
low-risk, low-commitment way for new customers to get to
know, then trust your company. If you sell expensive
products, you can hedge your bets by offering services as
well, such as consulting and seminars, so interested
prospects can get value from your firm in more than one

2. Stay in touch. Don’t let your customer database lapse or
go out of date! (Some businesses just toss paperwork into a
shoebox.) Former clients may not need your services right
now, but don’t let them forget about you. Send something
meaningful and relevant to previous customers twice a year.
Postcards are perfect for this – they have just enough
space for a tip, a tool or an inspirational case study.
Keep in mind that it costs five times as much to obtain a
new customer as it does to sell more to an existing one.

3. Never shut down the marketing pipeline. Create regular
marketing activities that reach out to new customers and
keep these going, regardless of whether you’re so busy you
can’t stand it or waiting for the phone to ring. That way,
you’ll never have to try to get traction from a dead stop.

According to a study by the American Business Press, in
past recessions companies that maintained their advertising
had increased their sales four times more two years later
than companies that had cut their advertising because of
the economic downturn.

I once asked a client of mine who closed down her business
to retire how long it took after she halted all of her
marketing before the calls stopped. Six months, she said.
Too often I’ve seen business owners become complacent about
how well word of mouth was working for them. One day they’d
wake up and realize referrals had dried up, and they’d have
to begin creating a marketing pipeline, which might not
start yielding new clients for months. In both good times
and bad, you must therefore market to keep sales humming.

Master marketer Marcia Yudkin, author of 6 Steps to Free
Publicity and 10 other books, has been selling information
in one form or another since 1981. This article is
excerpted from her report, “33 Keys to Thriving During a
Recession,” which is available as a free download from
www.yudkin.com/recess.htm .

Greg Cryns

Wahm Search Engine

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