Even when the economy slows, there are practical steps that every company should take to bolster its path to renewed or continued profitability. Don’t abandon your e-business initiatives. Don’t lay off your most valuable people–your technologists and your customer support people. Do scale back on advertising and marketing spending. But substitute creativity for cash. Think guerilla marketing, referral marketing, and viral marketing.
Most of all, concentrate on the branded experience that you offer your customers. What can you do with little or no additional outlay of funds to improve your prospects’ and customers’ experience of doing business with you? How can you save them time?
How can you make it easier for them to select and buy your products and services? And what kinds of technology investments should you be making with your limited funds? Perhaps now’s the time to try out some application service provider (ASP) services that will let you innovate without a lot of upfront investment and disruption.
Even if your organization is one of the lucky ones–the e-business group in an otherwise solvent company, for example–you’ll still need to scale back. Your internal backers aren’t going to be very generous at a time when the Internet economy is in a nose dive. Where do you cut? Try not to cut your technical staff. These folks are very hard to come by! Also, don’t cut your customer service operation.
That will lead to sure death. You’ll need to cut your advertising and marketing expenditures and rely on guerilla PR and viral marketing tactics. Switch to pay-for-performance deals wherever you can for all marketing and advertising outlays.
If yours is a technology or services company that counts on revenues from e-businesses, you have to get very creative about finding the pockets of pain where customers will be happy to invest in your solutions to reduce costs and/or increase sales. But you’ll have to be able to show a very rapid return on investment or be willing to accept a pay-for-performance kind of arrangement.
If you have an independent dot-com venture, a clicks-and-bricks initiative, or any aggressive New Economy venture that’s dependent on outside funding, hoard whatever cash you have on hand and don’t expect to find more from investors. Instead, you’ll need to lower your burn rate, increase your sales and profits, and figure out how to survive the downturn by living on your own cash flow from operations. It’s back to basics time.