Best Course for Marketing & PR: Point Into the Wind
“There’s little doubt that businesses are holding back. Right now they are sitting on more cash than they know what to do with, thanks to strong profits, depreciation that exceeds new investment and meager spending on researching, developing and marketing new products.” – Steven Pearlstein, Washington Post, 7/7/10.
Fear can breed strange behavior. Consumer confidence dips, then companies decide to become invisible.
Some enterprises that crawl into a shell when markets turn tough go one better — or rather, worse: Sending out a negative message that undermines sales and growth. One recent example. . .
A company leader delivered a presentation at a popular telecom trade show, usually a venue for raising awareness and wooing prospects. Instead, almost the first words out of the exec’s mouth were: Times are tough, customers aren’t buying, and in response, companies aren’t making much effort to pursue their business. I waited in vain to hear some nugget promoting his companies’ wares and how they could help their clients win market share even during an economic downturn — because that’s exactly his outfit excels at. Nada. I suspect many in the audience shared this thought: “Well, I came here to explore the possibility of investing in a new product, but if things are that bad I guess I’ll wait.”
Those with a warped sense of humor might find this exec’s twist on customer messaging mildly amusing. “Hey, I see you’re in a hole,” he seems to say. “If we weren’t on such a tight budget I’d get a rope to pull you out.” What the hapless CEO doesn’t realize is that he’s already hanging by one.
As the Post’s Pearlstein points out, companies that invest in growth even during a recession, such as Google and Apple, do grow. They aggressively develop and market products to win the business of customers, filling the void left when competitors decide to pull back. The wisdom of such confidence is no anomaly peculiar to the tech sector or our own era. In past recessions, Kraft pulled ahead of Post in the cereal business and Radio Shack took the lead in the transistor radio sector by leveraging the downturn to invest in building market share. Because their competitors chose to hunker down, Kraft and Radio Shack were well ahead when the tough times ended.
We’ve seen identical results in the BSS/OSS arena. During the telecom meltdown of 2001, the UK’s Cramer Systems approached us to launch their company and inventory management product in the U.S. Cramer’s investors said that investing in growth at that time was crazy. Cramer’s management charged straight ahead. Because competitors had turned off the spigot on product development, marketing and promotion, Cramer soon had a higher public profile and was winning new accounts faster than the U.S. market leader — a company with 50 times their revenue. Cramer held that lead through the recession and into the recovery. A few years later, the tiny British upstart that entered the U.S. with just $12 million in revenue at “the worst possible time” was acquired by an eager suitor for $370 million.
It may be an old truism, but I’m repeating it here for those who may have forgotten. Corporate leaders, like all highly-compensated professionals, are paid to pilot the ship in storms, not just calm seas. Good captains avoid the temptation of returning to port — they know that coming about in a high sea is an open invitation to a broadside wave. The best set their bow to the wind.
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