9 Recession Proof Business Strategies

April 11, 2008

Afraid the recession is here to stay?

If so, you’re not alone. What follows are several strategies that companies use to maintain and even increase-their sales, while their competitors struggle to stay afloat. Apply these techniques to your own marketing and selling efforts during a recession, and you will survive, even prosper while others struggle to get by.

1. Reactivate dormant accounts. Contact a past client, one you are not actively working for now and get them to do business with you again. Call them, say hello, and see what’s going on. Don’t make this a hard sell call. You don’t have to ask for work directly, but when you end the conversation, you might say something like, “Well, it’s been good talking with you. Keep in touch, and if there’s anything I can ever help you with, don’t hesitate to give me a call.” This lets them know you are interested in working with them, without putting the pressure on them to give you an order right then and there. What kind of results will you get? On average, expect one assignment for every 10 calls you make.

2. Reactivate old leads. A study by Thomas Publishing Company reveals that most salespeople, regardless of the industry, give up too early; 80 percent of sales to businesses are made on the fifth sales call, but only 10 percent of salespeople call beyond three times! The best way to reactivate these old sales leads is to call them. Ask whether they got your material, whether they have an immediate or future need, and what the status of that need is. The best prospects, however, would probably be those who contacted you within the past six months. One or two out of 10 will come through with an order.

3. Help existing clients create new assignments for you.Usually, my clients come to me with assignments. If they don’t, and I want to generate additional revenue, I will call them. I suggest ideas they can use then, if they go ahead with the idea, they will ask me to implement it. Toss out a few quick ideas, things which may be obvious to you, but ones you didn’t spend a lot of time coming up with, but which would be valuable to your client. Your approach is “Here is an idea that can help you, Mr. Client (and by the way, I’d be happy to implement it for you).”

4. Quote reasonable, affordable prices in bid situations. If times are tough, the cost of services or products will become more of a factor than it normally is; customers and prospects will be unusually price-sensitive. How should you price your products or services during a slow period? Don’t instantly lower your prices to rock-bottom. You may never be able to raise them again. Also, don’t necessarily reduce your prices, especially if your rate card or fee schedule presents a range of fees. As a rule, during a recession you probably want to adjust your bids so they are 15 to 20 percent lower than what you would normally charge in a healthy economy.

5. Use low-cost “add-ons” to generate additional revenue. One way to generate some extra profitable business is to encourage clients to add on to–or expand–existing assignments or purchases.

6. Postpone any planned fee increases. A business downturn or soft economy is not the time to increase your fees even if you feel you deserve it and that a raise is long overdue. During such a period, defer any planned fee increase announcements until later, and instead keep your fees at their current levels. Don’t announce, however, that you are “holding the line” on prices due to the recession.

7. Downgrade slightly your acceptable customer profile. You have guidelines to determine which clients are desirable and which are not. During a downturn, you may want to be more flexible in this area. For instance, if you normally do business with Fortune 500 companies only, consider taking on assignments from smaller firms provided the pay is decent and their credit rating is good. This doesn’t mean you abandon your standards and work for anyone who calls you. Far from it. Simply readjust your acceptable criteria during this lull to accommodate a wider range of prospects and projects.

8. Repackage your services to accommodate smaller clients and reduced budgets. When you’re busy, there’s a group of prospects you probably turn away without a second thought, companies that are too small (read: too under budgeted) to afford you. But when things are slow, it pays to look for ways to generate revenue from this overlooked segment. This is best done by repackaging your service or product to accommodate smaller clients and reduced budgets. For instance, the customer who cannot afford to pay you $5,000 to write his direct mail package can afford to pay you $400 to critique a package he writes himself. He can also afford to pay you $100 an hour for your consultation services or take your full day direct mail seminar for $200. Manufacturers and other product sellers can offer compact models, economy sizes, no frills versions, special discounts, payment plans, and smaller minimum orders. When big companies are not giving you big orders at big prices, sell these alternatives to the less affluent market segment to put extra dollars in your pocket.

9. Plan an aggressive new business marketing campaign. When things are slow, increase the percentage of your time spent on marketing and prospecting for new business. For instance, if you usually devote 10 percent of your time and energy to marketing and sales when things are fairly busy, increase this to 25 percent when things are slow. During a lull, make an extra effort to attract clients, follow up on leads, and close sales. In fact, to prevent a lull in business from ever happening in the first place, market consistently and aggressively all year long, every week not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now.