Friday, May 29, 2009

Recession: The Age of Change -Acknowledge and succeed!

We all have a reason good reason to panic during those though times. Even if we started year 2009 with encouraging news, the balloon just blew in our face with the recent drop in real estate market, but STOP. As dramatic as it is, a recession is simply a revolution. You may choose to go with the flow and choose to succeed, or be up against a tsunami. Those situations aren't new for mankind, just think about the fall of Rome. It's a time of profound changes and the first step is acknowledgement, so you can find ways to make it work for you.

While a recession can mean death for a resistant to change type of management, it is probably the greatest news for an entrepreneurial mind since the bid is open, and the old conventions are no longer.

According to Thomas Nagle, partner in the Cambridge, Mass., office of Monitor Group. in a recent article published in AdAge's CMO Strategy column "Times like these, when margins are down and the cost of raising new capital is high, are relatively unfavorable to new investments. Even fast-payback investments in trade shows or new ad campaigns look less promising when customers are buying less and expecting lower prices anyway. Still, some companies do mitigate sales declines with innovative marketing, often putting themselves in a stronger position for recovery as well. The key is to make the most out of capabilities the company already has to generate incremental revenue.

What makes recessions such good times to leverage existing advantages is that cash-strapped, or at least saving-motivated, customers are open to making changes they would not have made before. Millions of previously loyal Starbucks drinkers are now willing to forgo a custom-made beverage for a good-quality, standardized substitute at a lower price. Dunkin' Donuts and McDonald's are using that newfound price sensitivity to offer cut-price lattes and cappuccinos, at what are probably very good margins for those chains. And the customers they attract may also discover that the bagels at Dunkin' and the salads at McDonald's are an equally good value.

The key to success is to be open to some inside-out marketing. Look at what you're already capable of doing, probably in excess because of the recession, and figure out how that capacity could enable you to offer a new service or enter a new segment quickly, with relatively minimal investment. At least you can generate incremental contribution during the recession, and at best you may capture some new customers for future growth."

Remember your customers are more open than ever to change; it's just a matter of being creative. Brand what makes you different and don't be afraid of revisit your business model and products offering. Opportunities are out there for creative minds... Remember how Steve Jobs saved a dying music industry from pirates with his iTune store.

David Morin B.V.A
Principal/Brand Artist

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