Aplicación y resultados del Checklist Regulatorio

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hen sales are down, and cash flow is poor, companies natu- rally look to trim expenses. The first areas to be cut are train- ing and marketing. On the surface, this makes sense. After all, to stay in business, you have to pay the rent, the utilities, and the telephone bill. Employees will not work without a paycheck. To con- tinue making your product, you have to buy raw materials—you simply don’t have a choice. Marketing and training expenses seem easier to cut. You save a lot of money by not running your ads this month. And do your employees really need to attend that out-of-town seminar on stress reduction?

Your instinct is to view advertising as an expense and a luxury rather than a necessity—and, in tough times, to maintain profitability by cut- ting out this expense. Although this sounds sensible on the surface, this instinct is wrong. And when sales are soft, rather than cut marketing, you should actually shift it into high gear.

As marketing consultant Alf Nucifora says, “When times are tight, most small businesses tend to give up on self-promotion. Now, more than

ever, we should be telling the world how good we are. Seek out high-vis- ibility clients, take on select pro bono assignments, hit the speech cir- cuit. Chase publicity.”

The reason: You can only cut expenses so far, and no more. But even if expenses are zero, you can’t stay in business when sales become zero, too.

But while the potential to decrease operating costs is finite, the potential increase in revenues you can achieve has practically no upper limit. A big boost in revenue is the fastest way out of busi- ness doldrums, and marketing is one of the only ways to revitalize sagging sales.

Now that you’ve fine-tuned your communication and interpersonal skills and prepared yourself for taking massive action, it’s time to market your product aggressively and watch sales go up. By contrast, stop mar- keting, and watch leads, orders, and sales dry up.

Sounds logical in theory, but does it work in reality? Most assuredly. According to the American Business Press, companies that maintain or increase advertising during recession years do better in sales and profits in those and later years than do companies that do not advertise. Exam- ple: By 1985, the sales of companies that were aggressive advertisers dur- ing the 1981–1982 recession had risen 256 percent over those that didn’t advertise during the recession.

Companies that cut advertising during hard times jeopardize their future sales and profits, said Wesley Rosberg, president of Buchen Adver- tising, in an article in Industrial Marketing magazine. According to a re- search study from Yankelovich/Harris, companies that advertise in a down economy achieve greater top-of-mind awareness with customers when purchase decisions are being made, and create more positive im- pressions about their commitment to their products and services. Cahn- ers Research found that companies who increased their advertising expenditures 28 to 80 percent during a recession gained an average of 1.5 points of market share.

In his client newsletter Words from Woody, David Wood, a marketing consultant serving the construction industry, tells the story of an entre- preneur who found out what happens when you stop marketing in a down economy:

There once was a man who lived by the side of the road and sold hot dogs. In fact, he sold very good hot dogs.

He put up highway signs telling people how good his hot dogs tasted. He stood by the side of the road and called out, “Buy a hot dog, mister?”

And people bought his hot dogs. They bought so many hot dogs the man increased his meat and bun orders. He bought a bigger stove so he could meet his customers’ demands. And fi- nally, he brought his son home from college to help out in the family business.

But something happened. His son said, “Father, don’t you watch television or read the newspapers? Don’t you know we’re heading for a recession? The European situation is unstable and the domestic economy is getting worse?”

And the father thought, “My son’s a smart boy. He’s been to college. He ought to know what he’s talking about.”

So the man cut down his meat and bun orders, took down his highway signs, and no longer stood by the side of the road to sell his hot dogs.

His sales fell almost overnight. “You’re right, son,” said the father. “We certainly are in a serious recession.”

Marketing moral: If you stop selling your customers to- day, they may stop buying from you tomorrow.

As opposed to the father’s approach in the hot dog scenario, the smart marketing strategy for business success in a slow economy has two parts. The first part, which seems blatantly obvious, is that when

things are slow, you increase the percentage of your time spent on marketing and prospecting for new business. Ironically, most busi-

nesses do the opposite.

The second part of the strategy may not be so obvious. It’s this: To

prevent a lull in business from ever happening in the first place, you should market consistently and aggressively all year long, every week, not just when you need the business.

This chapter shows how to plan an ongoing marketing campaign that ensures a steady stream of new business leads, regardless of the econ- omy. It also examines what types of marketing work best in a recession— and urges readers to avoid costly “image-building” marketing such as large space ads, slick corporate brochures, expensive annual reports, and other marketing communications that drain your budget without pro- ducing measurable results.

In document Análisis Sectorial del Marco Regulatorio del estado de Baja California Sur (página 90-104)