I was happy to see yesterday that TheStreet.com has picked up my Entrepreneur.com column Economic Crises Calls for Better Marketing Plans, from this month. Here’s the link to the original on Entrepreneur.com, although I think they’re the same.
For the record, I think I wrote that column with the title “better business plans” but it became “better marketing plans” in edit, because I do emphasize the marketing plan first. That edit is fine with me, though, because the article cites John Jantsch and his views on the marketing plan.
Here’s what was happening as I wrote that column a few weeks ago:
As I write this, uncertainty crashes all around us like a violent hurricane. Now is the time to bolster your sales and marketing plans and get ready for disaster business planning. Lehman Brothers went under, Merrill Lynch was picked up in a fire sale by Bank of America and AIG needed government assistance to stay afloat.
Also, we’re worried about the Chinese pulling their money out of our economy, sending us spiraling further downward. And nobody has figured out what to do about huge federal spending deficits. Then there’s trade deficits (although the plunging dollar will help curb that problem), the subprime crisis, plunging real estate values, a crashing stock market, not much hope for venture capitalists getting money out of their investments for a while, and, wow, take a breath, what else?
Oh, yes … I know … do you plan during this kind of chaos, or just duck and cover? Is business planning out of the question? Is it useful?
Let me answer that question with another question: Who do you want to be when the hurricane is coming? Do you want to be one who carefully boards the windows and lashes everything down, closes up and then evacuates with time to spare and a basic plan? Or would you rather be the one that does nothing and ends up drowning or gets rescued by brave people risking their own lives to do it?
And here’s what I recommend, even more today than when I first wrote it:
Using that analogy, I’d suggest that what you ought to do as the storm comes–or preferably before the storm–is review and revise your plan to include everything and anything your business or startup needs during a crisis.
Go first to your sales and marketing plans. Review them conceptually. What are you selling, and how will your business offering fare during hard times? Take a step back from the business and give that some real thinking. Some shifts in demand are predictable; some changes in customer base are predictable, too.
When I was doing economic analysis many years ago, I discovered that some markets reacted in strange ways. For example, when there was a big economic crash, the luxury car markets would hold up better than the economy car markets. On the other hand, during the current real estate crash, sales in California are up over last year, but they’re driven by the low end, particularly transactions on foreclosures. Similarly, you should think about your own sales when watching for the signs. Think: What’s changing that might affect my business’ sales?
John Jantsch, founder of Duct Tape Marketing, recently suggested that the best thing to do in hard times is focus more and focus better. By narrowing your focus, you can concentrate on your best customers, your key market segments and the parts of your business that are most important to you. That seems like very good advice.
Don’t settle for just a conceptual review. Dig into your numbers. Open up your sales forecast and expense budgets and take a long, deep look into what parts of your numbers are most likely to fall off and why. Review and revise. Look at your expenses, and cut where you can. Then look back at your sales and imagine which of your customers, including how many, are doing the same as they plan for their business, therefore reducing their orders from yours.
Unfortunately, during the weeks that passed since I wrote that, the need is more, not less.
The hurricane is a great analogy, Tim, but I think it differs from a typical business crisis in terms of advance notice. In today’s world the arrival of a hurricane is well publicized, providing some time for people to formulate some type of response even if they haven’t planned in advance. In contrast, the most serious business crises tend to be complete surprises forcing owners/managers to choose the right reactions under stress and on the fly – a difficult thing to do.
I think the answer is to actively manage the biggest risks as part of the overall business planning process.. identify them, evaluate them and then plan for those that are biggest and/or most probable. The big question is: How do you convince people to care about (and plan for) potential ‘surprises’ that may not occur?