The Recession is Over – What did you learn? August 5, 2009

The Recession is Over    

This headline strikes me as really entertaining.  If, you, like me, storm through news readers, websites, twitter feeds and facebook updates looking for upbeat news, you are anxiously awaiting the day these words are trumpeted all over the news.  They are coming, but are you really ready for them?

Now, bits and pieces of the business world will come back and you could see benefits to this long before the general economy rebounds.  However, I bank on consumer confidence to make my world improve and this is a very difficult and stressful event.  Consumers need to “feel” they can go back to spending before they actually do.  And they need to see it, read it, experience it and live it before they believe it. 

If you go to restaurants and see lines and have to wait where last month you didn’t- you begin to see it.  If you go to your local stores and items you buy are in short supply, you begin to experience it.  If you open your favorite webpage or local newspapers and the headlines are touting the positive perspective you need, you begin to read it.  And if you talk to your friends and share all this WOM (word-of-mouth) experience and they tell their tales of positivism, you begin to believe it.  And that’s when the world turns for the better.

So let’s assume that happens in the next 6-12months.  What can you do to be ready?  How can you help your business process? What has this tough economy taught us that we can carry forward? I realize these are very “tall” questions with very long answers we can spend lots of time on.  However, I will share some short thoughts in hopes it will get you to think and be provoked into some preparation for the coming rebound:

1. Be nimble, be quick:  This economy happened in part because many facets of the business world were in denial about the future.  Unsustainable business models crumpled a bunch of industries- were you able to adjust quickly enough?  Clearly, many of us scaled our operations down in response.  Did we do it fast enough? Could we have reacted quicker if we had interpreted the signs correctly?  Were we looking at the right data points?  I closed a new expansion five months into 2008 when it was clear it was a money drain.  But I knew in the fall of 2007 it was money loser without looking at reports.  I just looked at the book.  It lacked the content to be sustainable.  We put it in CPR-mode but it did not survive.  I could have saved many of the costs had I acted quicker. 

Now that we have streamlined our operations, can we live with it this way going forward- even when our businesses improve? Your ability to adjust is based on being nimble and quick.  Don’t let an improving economy bog you down again;

1. Be an operator AGAIN:  Were you as close to your business model as you needed to be?  Did you really have line-item understanding of where the money was spent?  If you did, now take it a step up and become an ETP -evangelical thrifty person (my definition of people who help you not spend money) as the economy rebounds.  Become a zealot about not spending money, being cost conscious and saving money.  Also be an operator again when it comes to revenue performance (you can’t “save” your way to prosperity).  We spent time in my company, back in 2007, talking about the month’s revenue performance and how we would do and what we would sell.  For a weekly publication that’s too long a period for sales to focus their efforts. There was insufficient intensity if the first two weeks of the month were weak -we always thought we could make it up by the end of the month.  In today’s world, not so true.  We gradually changed the focus to weekly and I believe helped ourselves to adapt to a changing revenue climate quicker. 

If you were not dialed in and the business got away from you in tough times, remember the lesson.  If you were forced back to being an operator in bad times or have always managed to stay close to the business then stay there.  Don’t ever let the good economy fool you again.

1. New accounts:  This one is my favorite of late.  I have lost count of how many conversations I have had about the value of a new customer.  I will simplify it here: the day a customer starts advertising the customer will either stay an existing customer because they are consistently buying or they will become an inactive customer because they stopped advertising.  Seeing as no one advertises forever, all businesses will become inactive at some point.  Now given today’s economy, the failure rate of new businesses, the fact advertisers  probably spend less today when they buy than before, and advertisers buy less frequently than before, the ex-customer pool has less value than ever before.  You push your sales people for revenue in tough times.  So where do sales folks spend most of their time- ex-customers. Why? Because it’s the shortest selling cycle they have- they don’t have to go through a presentation on where and why to advertise, they just have to solve the “why aren’t you advertising now?”    If they can solve that, they have an ad. Simple enough.

Denial is not a river in Egypt.  Because the options are different today and for all the reasons above, we need more new customers for those exact reasons- they spend less and buy less frequently.  So if we want to grow revenue and  customers in our products, if we want to be engaging to readers because we have great content, if we want to be the product that works because readers bring results to our advertisers, if we want to prosper in tough times we need an aggressive customer acquisition strategy.  In my organization, we report on new customers (as defined as never have run with us ever- some folks call them “new new”) by salesperson every week and we give feedback.  We aren’t as good at it as we should be and need to get better, but at least we know the score and see what we are measuring.  I know we will win the day with more new customers.

1. Stop fighting the obvious:  I realize this could go in many directions but here is my pitch for the web component.  Whether you believe it or not, things are happening to your customers and readers without your participation.  Get over it.  Its call the web or social networking or mobile or iPhone apps.  It’s technology and it’s here to stay.  It’s real.  It has/wants your content. It wants your readers. You will adapt, restructure your content, defend your readers and join the technology parade. Get really engaged in this world- it is your/our future. 

Let’s assume you have a technology presence- here are three reasons to keep evolving:

• According to a 2009 study by the iab- Internet Advertising Bureau -mobile phone penetration is upwards of 4 of 5 people in the US and more people now have a mobile phone than have PC-based Internet access.  This especially true for older adults and lower-income people (1).  Figure out how to link your ads with a mobile channel;
• Social networking correlates to better financial performance.  A 2009 study prepared by wetpaint ™/Altimeter Group took the top 100 brands in the world and scored them on 40 attributes related to social media engagement. There study correlates not just social presence (“I have a twitter page!”) but engagement where you interact with others, instigate conversation, and respond during conversations(2).  Get your team engaged with facebook and twitter.  They understand it, you don’t have to;
• In a LinkedIn/Harris Interactive Poll in July 2009, 49% of advertisers said they are using print advertising less often and 74% said they are using internet advertising more often (3). Give them some electronic choices- quickly.

These four points cover a broad range of things I have learned and re-learned.  There are many more.  To be ready we must move forward and really participate in the future with the things we have learned.  I want to end this month’s column with a few words on perspective and moving forward.

A wise man once orchestrated a change in my perspective by painting a very solemn and very definitive picture.  He said that the world was teaching us to be and think differently and to survive we needed to move forward.  He cautioned me that ignoring this evolution had really dire consequences.  He took mentally took me to a bridge and walked me out part of the way.  He virtually pointed to the far side as the future.  He then virtually pointed to the side we had stepped away from and said that is the past, where you are standing is today.  He then told me to face towards the future and start moving.  You see the bridge between me and the bank I just stepped away from was on fire.  I could never go back that way.  And I couldn’t stand still either as I would be consumed by the approaching flames.

Albeit somewhat melodramatic, it does paint a real picture.  The recession will be over soon. Our lessons will give us direction -grab on to them and keep looking to the future.  Embrace your experience; pat yourself on the back for getting your team, your company, your readers and your customers through the worse economy since the depression and keep moving forward, it will never be the same or how it was or how it used to be- the bridge is on fire behind us.

All the best, Orestes

(1)  iab 2009, Mobile Buyer’s Guide;

(2)  wetpaint ™/Altimeter Group, “Engagement db”, 2009;

(3)  LinkedIn/Harris Interactive Poll, 7/21/2009.