Surviving the downturn
Wow. Will things ever improve in tech? Everybody I talk to tells me sales are down, companies are going out of business, customers are postponing purchases, things are really bad.
What's the most common mistake companies make when times get tough? Cutting back on sales and marketing. Why is this bad? Everybody needs customers, and in a recession you're fighting for a piece of a smaller pie. But in a downturn you need to jack up the volume. It's possible competitors are scaling back or even going dark, so increasing your presence lets you buy market share at a discount. The downturn won't last forever, but how will you be positioned when things improve? Now is the time to plan ahead. Being poised for growth when the economy recovers takes planning and action now.
For example, a competitive analysis can help you set priorities for precious development dollars. Competitors strapped for cash might cut back on product development, creating an opportunity to leapfrog into top spot. If you're already number 1 in your category, you need to make sure you're still there when the market recovers.
Some tactics
This a good time to think about new campaigns to generate demand for your product. With resources tight, be sure to set clear objectives for each campaign and test test test. Whatever you do, be sure the audience you're reaching is the right one. Before committing to a trade show, find out detailed information about the kinds of people who attend. If your product is HR software, a trade show that is mainly attended by IT managers isn't likely to do you much good.
Direct mail—whether old fashioned snail mail or email—can be great in times like these. You can put campaigns together quickly, testing different ideas against each other fast and cheap. Direct mail to the right list coupled with a telemarketing campaign is a highly effective way to generate sales. If you use email be sure to use either your house list or a double opt-in list. Spamming is not cool.
I'm seeing more and more paid directory services (sort of like InfoSpace for a particular vertical market). In principle these are an excellent idea, but watch out for high prices to get listed with little guarantee of results. Check for references of companies in a similar space to yours. If they're getting good results it might work for you. Caveat emptor.
Trade shows can be lucrative, since the right show can put qualified prospects in front of your demo. They're important enough that I thought I'd spend some time on them in the Do's and Don'ts of Trade Shows.
Co-marketing programs can get you a lot of visibility with little or no cost. The trick is in getting creative when you design the program. One suggestion: create a direct mail piece with space for your VAR's to get listed. Have them share the costs of production and mailing, and you get a free campaign.
PR is getting harder and harder as magazines fold and everybody cuts back on editorial space and staff. Skip the expensive meet and greet press tours: editors hate them and the only one who profits is your agency. Focus instead on real news… if you don't have news see if you can become a resource for editors covering your area of expertise. You've got information for background, case studies, industry trends: all stuff they want and can't easily get. Treat them right and eventually it will pay off.
Prices are low in a recession. Take advertising: vertical market and IT magazines have lost huge revenues from shrinking ad buys. This is a great time to make a huge splash at a big discount by careful shopping.
Other special programs can provide a needed boost in sales. What about an academic edition for students? Even if you have a vertical market product, it might make sense to get it into universities and trade schools. Do you have a trial version? How about free downloads of demos or time-bombed versions? What about a stripped down SKU to sell at a reduced price, like Photoshop Elements? Not all these ideas will work for every product, but I hope it gives you some nuggets to think about. If you're stuck, or want something more tailored to your needs, send me some mail.
