Building a strong and positive brand image is vital to business success in any economic climate. During an economic downturn, a good brand reputation could be a matter of your company survival. When times are hard, people prefer to do business with others whom they know and trust, even more than when the economy is strong. What people think of your brand and its promise are essential to that trust.

When money is in short supply, your customers become more reluctant to spend their limited cash. As a result, they will be much more careful about who receives their business. In the Great Depression of the 1930's, people were so short of cash, they often were dependent on credit at certain stores. That hard earned trust was considered a two way arrangement. In return for the credit during cash shortages, customer loyalty was nurtured that continued even when the economy improved.



Depression survivors were very loyal to certain businesses and reliable products that delivered on their brand promise. There was no margin for error, as a bad brand represented a major cash loss. It became a commonplace for those who lived through the Great Depression, to retain loyalty for their entire lives, to brands that kept their word on quality and reliability.

It's not enough to expand marketing efforts and to increase advertising and sales staff to gain market share. Those contrarian activities are important in recessions to retain and expand your company's customer list. At the same time, it's crucial that your products and services meet the promises made in those marketing materials. A customer who feels as if their needs were ignored, or taken for granted, will take their potential for long term loyalty to your competitors. Your brand promise must be kept, or your customers will disappear. As in the Great Depression, that perceived loyalty remains a two way street.



Modern customers may revive that long term brand support even outside of a recession. A promise kept on brand performance can still build lifetime loyalty, as well as creating customer evangelists who will spread the word about your products and services. Brand loyalty becomes even more crucial to business survival when money is tight. As a result of an economic slow down, wise business owners and managers would be well served to ensure that all their brand promises were kept, and also improved upon for success.

With slower economic conditions, loyalty to proven brand winners will be the order of the day. It's vital to your business success that your brand delivers on its word. When the economy rebounds, your superior products and services will win a loyal customer base for life.

Tags: recession management, branding, customer loyalty, delivering on promises.

READ MORE - Recession management: Positive brand image

Recession is one of the major themes, in the mainstream media, when discussing the economy. With the fall out from subprime mortgages, increasing numbers of housing foreclosures, and balance sheet write downs among the financial corporations, many business people are becoming worried about the future of the economy. Instead of tearing out your hair, it is always best to take the initiative and a proactive approach with your company.

Making your company recession proof, or at least able to survive an economic downturn, requires some planning and creative decision making. It is all too easy to simply say cut back on expenses and lay off staff. In fact, these rather simplistic steps may be counterproductive and do more harm than good. Along with the short term benefits, the longer term picture must be considered carefully. It is of little value to an organization to leave a recession unable to capitalize on the return of better times.



A recession proof company is a creative company. One of the hallmarks of a creative company is a willingness to listen to everyone within the organization and pay close attention to their ideas and suggestions. Front line employees in customer service, delivery, purchasing, operations, and sales often have powerful money saving ideas at their fingertips. There is no better time to employ cost cutting measures that do not harm the company's revenue than during an economic slowdown. Note that the cuts must be ones that do not impact revenue in a negative way. Think of them as eliminating unnecessary waste instead.

A recession proof company listens to its customers. That statement is often used by business, but is sadly often ignored as well. In recessionary times, many of your customers will be feeling the pinch. They may suggest different sizes of shipments, and even new product formats. Don't take their suggestions lightly. They may be offering you an entirely new and profitable product and service line. Simply changing your offer size, or something similar, can pay huge dividends. A recession is no time for take it or leave it marketing practices.



A recession proof business values its employees. Other companies will follow the traditional approach of laying off staff. It is time to go against the tide, and perhaps consider adding employees. Some very talented people will be let go by your competitors. There is no better time to add their skills and experience to your organization. They may bring some much needed fresh thinking and ideas to your company. At the same time, your current staff morale will remain high as they won't feel threatened by impending layoffs. Leave those concerns to your competitors.

A recession proof company understands its costs of providing its products and services. Knowing your cost of production, and cost of goods sold, helps to keep profits flowing in the face of possible price reductions. Be sure to understand all of the costs, including staff time, that go into providing your goods and services. This cost knowledge is especially important for service based companies where some services provided may be much more profitable than others. Let your competitors have the low profit margin business, while you take the highly profitable projects for yourself.



A recession proof company lowers its debt levels. A recession is no time to have high overhead costs associated with servicing high debt loads. This is even more true if the debt incurred was for non-productive purposes. Those company limos, new designer furniture, and extravagant gala parties won't provide much long term value. Their repayment may cause some severe cash flow headaches though. Keep only productive debt on the books, and if you must expand, try do so organically from company cash flow. Being paid off means lasting through tough times.

A recession proof company is flexible and seeks opportunities where other companies see only doom and gloom. An economic downturn brings with it new product and service demands. Be sure to be ready to seize the day and your business will be safe from any threats a recession might bring.

Tags: recession management, creative thinking, tags, debt.

READ MORE - Recession proof your business