When faced with challenging economic conditions many firms cease investment and cut back spending in an effort to survive, however cutting back in a challenging economy is the worst thing a business can do. To maintain profitability in the current environment, successful B2B marketing executives need to revitalise their strategy and develop new and innovative ways to initiate customer spending and new client relationships.
Developing the right approach should be relatively simple if you follow a few tried and tested principles:
Take an objective look at your business
It is often challenging to take an objective approach to your business but a downturn provides an opportunity to re-assess and prioritise which should not be missed. The first step to winning business is to look within and ensure your sales and marketing teams are equipped with the information they need and a strategy that works.
The key things to consider are:
Reassess your marketing goals and promotional strategies
Smart executives know that marketing goals need to be re-evaluated on a regular basis, however this activity becomes significantly more pertinent in a challenging environment. When the market slows, your business objectives will change so set realistic goals that will have maximum impact on the bottom line.
For instance, while brand building is important, short term sales objectives or market share growth may be more relevant. Determine what is most important for your business right now and adjust your marketing tactics accordingly. This may mean that short-term promotional strategies such as direct marketing, sales promotion or e-marketing may become your core focus and require the most significant portion of your budget.
Reprioritise B2B customer segments
The profitability of particular sectors and sub-groups will decline in a slowing economy. Therefore, it is important to reprioritise your prospect database to continue to target the right customer groups. Capturing and managing data on characteristics such as sector, country, size and profit is the best approach and will result in a much more effective sales and marketing focus.
Repriotising geographies is paramount in re-defining your customer segments. Businesses all around the globe are being affected by the latest bout of economic turmoil. As a result, firms that trade internationally and firms that trade locally need to reassess the profitability of geographic markets.
Keeping up-to-date with the latest market developments will ensure your business is well-equipped to make the right decisions and invest your valuable sales and marketing resources effectively.
Assess customer risk
The credit crisis and slowing economy has resulted in a sharp increase in customer risk for the B2B environment in 2009. The number of businesses in Australia rated a high risk of financial distress or failure is up 12 per cent on the previous year and 26 per cent on 2007 figures, according to the latest Dun & Bradstreet analysis.
Meanwhile, business payment terms have blown out to 56.5 days, the highest level recorded since 2001 (D&B Quarterly Trade Payments Analysis).
Many businesses make the mistake of overlooking the importance of risk mitigation in their sales and marketing strategy. Don't fall into this trap -_ without the appropriate risk mitigation practices in place, you risk chasing the wrong customers which will negatively impact the bottom line.
Maximising sales potential through better management of risk can be done in two ways:
- Stay on top of your key customer accounts - determine their financial health and their ability to pay on time. Being alerted to early warning signs such as declining sales and late payments, will allow you to act quickly to protect your business from cashflow troubles and bad debt.
- Target customers that are high value and low risk. There is no point chasing a prospect that is headed toward financial trouble. Closing the deal is one step, but getting paid is another.
Reconnect with your existing customers and chase the ones that got away
In challenging times many executives focus heavily on cost cutting and survival and risk neglecting their best customers. This provides an opportunity for your business up your efforts to demonstrate superior customer relationship management with your existing clients. Sticking by your customer in both the good times and bad will strengthen loyalty and create long term value for your business.
Now for the ones that got away - former customers and previous prospects who may have chosen an opposing product or service are ripe for the taking. If your competitors have battened down the hatches in an attempt to survive the downturn its highly likely they aren't giving their clients the attention they deserve. Take advantage of the situation, make your competitors clients feel loved. Winning them over could be as simple as a face-to-face visit.
Market smarter
Don't follow the pack! As businesses tighten their belts you have an opportunity to get your message heard while the market is less cluttered. By taking your marketing strategy a step forward when your competitors take a step back, opportunities skyrocket. To do this effectively, delve deeper into your customer data to understand consumer trends and purchase behaviour - this will put you in a good position to deliver a unique value proposition through multiple channels.
Tough economic times have caused smart marketing executives to adopt new and integrated marketing strategies that have a direct positive impact on the business. Opportunities will change, however smart marketers will look at ways of identifying these and reigning them in.
To discuss your sales and marketing needs contact Client Services 13 23 33
