Bottom line thinking may not be the quickest path to profitability.
When companies become cash starved and projections for future revenue seem bleak, the average company makes moves to protect their bottom line by making expense cuts. It’s a self-fulfilling prophecy…we expect sales to decline so we decrease the marketing budget and sales decline.
In downturn scenarios, I submit that the absolute best strategy is to increase expenses to add top-line sales.
While competitors cut customer service (labor) to save expense dollars, contrarian thinking would suggest that we increase efforts to improve customer service. The best time to carve-out a niche is when everyone is sleeping.
4 Tips To Zig While They Lag
- Media Concentration Strategy—Pick one medium. Dominate it. Cut all other spending and focus all media dollars in one day-part (broadcast). It’s costly to “own” a medium, all day, every day but it can be very affordable to dominate a certain time of day (morning news roadblock.)
- Re-write all copy. Design an irresistible offer (read Joyner’s book of that title) and deliver the offer with the highest quality performance your company has ever mustered. Best offer. Best execution.
- Don’t cut service. Use marketing dollars if necessary but hire more service staff if necessary. If your company has a truly irresistible offer in the marketplace, hire star performers to deliver the goods.
- Get help from current customers. Increase marketing efforts to current fans and reward referrals as never before. The quickest path to more cash is through current customers.
On the surface, it may seem foolish to spend MORE money when the market is soft. The best strategy may seem to be cost cutting. It almost seems logical .
At least consider contrarian thinking. If the industry is cutting costs, increase spending. Market share can be won while scaredy-cats curl-up and shiver.
Buy market share while it’s on sale.