How to Grow Your Business in a Recession: The 3 Key Areas to Invest

January 20, 2009
How to Grow Your Business in a Recession: The 3 Key Areas to Invest

By Victor Mataraso, M.B.A.

Amidst the gloom and doom, savvy business owners are positioning themselves for the inevitable economic recovery.  As clients cut back, sales cycles get longer, and revenues fall the temptation is great to scale back dramatically on your marketing, sales and customer service efforts.  After all, the phone may be ringing less, clients are spending less and it’s tough to absorb the ongoing costs of marketing, sales and service.  And that’s exactly why now is the time to hold firm and even expand.

Time and again studies have shown that business who maintain or expand their marketing and customer service during an economic slowdown gain market share and emerge stronger when a recession ends.  That’s not to say you should necessarily spend willy nilly.  However, there are three key areas of your business in which you can invest now to catapult yourself to the next level during the recovery.


1. Marketing - For many businesses, the marketing budget is the first to be cut during tough times.  The reality, however, is that such a move only exacerbates the pain.  The dollars you invest in marketing and advertising today are what is going to drive your success in a few months.  During a slowdown, demand does not necessarily disappear, but sales cycles lengthen as gratification is postponed.  As your competitors cut their budget, just holding steady will gain you a larger share of voice in your chosen medium and in the mind of your customers.  To really push the envelope, use this opportunity to snap up premium ad positions previously held by competitors, or to test out new marketing concepts you’ve had on the back burner.  You probably have a little more time to devote to them now.  For more tips on marketing during a recession visit this Business Week article (http://www.businessweek.com/managing/content/feb2008/ca20080219_060846.htm).

2. Customer Service - Another powerful strategy for capitalizing on an economic downturn is to step-up your customer service.  You may be doing less business, but that makes each potential and existing client that much more valuable.  Leaving your customers to navigate a maze of touch-tone options, or greeting them with your voicemail box may save a few dollars in the short-run, but could be costly down the road.  Think twice before laying off the receptionist, or at least look into a company that provides live telephone answering, or better yet, local, off-site receptionist services where your calls are answered live, customers are assisted and calls can be privately announced and seamlessly connected to you in real-time.  With some receptionist firms appointments can also be scheduled for you on the spot.

3. Systems - One additional area to focus on during a downturn are your sales and service systems.  If you don’t have a system for assisting customers in-person or by phone, now is the time to create one.  If you have been using a sales and service system, you may want to reevaluate and improve upon it.  Giving customers a consistent, polished, professional experience when they contact your business inspires confidence.  The more confident customers feel about your business (especially during hard times), the more likely they are to spend their hard-earned dollars with your firm.  Appearing confident when not many others do lends credibility to your company.

While it can be difficult and frustrating to weather an economic slowdown, investing in the right areas of your business is likely to produce good returns as the economy recovers and the pent up demand for goods and services is unleashed.