Should you hibernate in a bear market?

Sustained downturn … bear market … economic slowdown … No matter what you call it, one thing is clear: Americans are no longer enjoying the booming economy of years past. And the question on every marketer’s mind is, “How will this affect my budget?”

Weather the storm

The good news is that it may not affect it at all. Many companies — IBM, Microsoft, H&R; Block and Nestle among them — are actually increasing their marketing allotments.

Market leaders view this financial climate as an opportunity to separate themselves from the pack. While their competitors are drastically reducing marketing dollars, these companies understand the importance of maintaining a strong presence — in both bull and bear markets. After all, the competitive marketplace doesn’t stop shifting in a downturn. And, if you’re the only one getting your message out, you can increase your market share while your opponents are in hibernation.

Market smarter

Of course, other companies won’t heed this advice and will instead slash budgets in the most vulnerable place: marketing. And, unfortunately, fewer dollars doesn’t equal ower expectations. More than ever, marketers will be expected to meet revenue goals. How can you make the most of diminished resources if you’re handed a revised budget?

• Focus on your current customers: In a bear market, you should shift from an acquisition stance to one of retention. Everyone knows you pay a lot more money to attract a new customer than to keep a current one. Consequently, moving budget dollars from mass-media advertising into efforts to target and retain customers is a smart move.
• Maintain a dialogue: Frequent communication with your best customers is critical. Thank them for their business. Reward them with special offers. Do everything you can to keep your company top-of-mind and the competition at bay.
• Enhance customer value: Use your communication to cross-sell and up-sell. You’ve already established the relationship, now enhance customer value by cross-promoting products and services.