Economists define recession in many technical ways, not all of which are easily understandable. Let me give you an example. If the growth of the gross domestic product in two successive quarters of a financial is negative, then it is supposed to signal a "recession" in the national economy. This is a "heavy" definition and doesn’t leave you any wiser, if you are not used to dealing with such stuff. A story once narrated to me by a dear colleague will probably help you visualize the concept much better.

Once upon a time, there were two friends who had tried their hand at many businesses but without success. They were on the lookout of a commercial opportunity where customer-demand was constant and strong. They applied their mind and hit on the idea of selling laddoos near temples. They reasoned that nothing could really slow down the demand for offering "prashad" to the Almighty. They hastened to put all their meagre capital into making these laddoos and soon had twenty pieces each for sale. While one of them had nothing in his pocket, the other had only one rupee left with him. After laboriously making rounds of the temple for about three hours, they realized that they had not been able to sell even one piece to any devotee. Sitting under the shade of a tree nearby, and comparing notes, they saw another business disaster, looking on the horizon. One of them was unable to bear his hunger, took out the rupee from his pocket and gave it to the other, buying one laddoo from him. The receiver of the rupee thought this to be an excellent idea and gave his recently earned rupee back to the other, and bought one laddoo, too. Soon, the rupee kept going from one pocket to the other, and the entire stock of laddoos was eaten.

During an economic recession, there is a shortage of money in the market place. There is also a shortage of demand and since organizations are forced to spend on their fixed overheads, balance sheets get painted red. Our purpose today is to find out how marketing activities could be done differently, to overcome the bad effects of an economic slowdown.

Never cut marketing efforts in a recession: Many organizations react to an economic slowdown by cutting personnel costs. It would be a dumb thing to do as far as your marketing department was concerned. When things become difficult (sales are harder to come by) the right would be to increase your efforts to sell; increased efforts means more sales persons. Do not therefore fall into the trap of that fashionable business concept of "downsizing". Simply put, you need to contact more customers during a recession, in order to get the same business and to do this, one requires more salesmen.

Focus more powerfully on what the customer wants:

We know that success of any business depends on its ability to identify and satisfy the customers' needs, both stated and implied. During a recession, an organization needs to do this even more strongly. This process of finding out what exactly the customer wants appears easier than it actually is. Don’t we all eat ice-cream? Will you be able to write down the particular need of the customers (us) that an ice-cream company satisfies? If you have followed the recent hype associated with the release of "Indica", can you write down on a piece of paper the need of the customer it satisfied and how different it is from that in case of a "Maruti"?

Pay 1000% more attention to customer complaints:

Research says that only loyal customers complain, so don’t get angry at complaints from customers. Complaints need to be looked upon as opportunities to improve oneself. Since you can never keep all your customers happy, it is safe to assume that if you are not receiving any complaints, you are probably not in the customers' mind. Research also says that a large proportion of unhappy customers do not complain at all--they just shift their business to your competitor. Did you know, for example, that the cost of getting a new customer is approximately five times that of retaining an old one? It makes a lot of sense, therefore, to retain your customers and the best way to do this is to heed to their complaints and use this opportunity to consolidate your place in their mind. During a recession, all this becomes even more important and should therefore, be followed with greater zeal.

Cut marketing administration costs:

Though we said downsizing in the marketing department was a no-no during a recession, it does not mean that we do not cut down to the bone, all administration costs associated with marketing. Tell your sales people to travel by train, instead of by the aero plane. Tell them to entertain clients in less expensive joints and constantly brainstorm for ideas to pinch pennies. Your customer is unlikely to believe that you are in dire financial straits (brought about him sitting at the most expensive eatery with an unlimited expense account).

Use less expensive but more effective ways to reach your customer:

Necessity is the mother of invention, they say. Many a marketing manager has had a tough time deciding how effective particular advertisement campaign has been. Results of a very interesting research say that in a metropolis, there are about 560 messages thrown at an average working person during a "day". These messages are, of course, the sales pitches made by various sellers to attract his attention and include the TV commercials, hoardings on his way to office, ads in the newspapers, all other such media. What is of greater is that out these 560, only 76 register on his brain. After about twelve hours, he retains only 12 of these messages, and the final nail the coffin is that out of these 12 that he retains, three have a negative connotation. Imagine your plight since you are fighting for your clients' memory with those nine out of the 560 who started the race. The intensity of all this is unbearable during a recession. One must find our better ways than the traditional means of reaching out to customers.

Though we do not have space to get into the details of modes or techniques of trying to reach our clients more cost-effectively, I would just like to mention that DIRECT MARKETING and TELE-MARKETING are two such means. A mind-boggling amount is presently being spent on refining and improving the customer response rates of these two techniques. Suffice it to say here that in the coming years we are going to see a quantum jump t the amounts that Indian corporate will be spending on these, as compared to the amounts they spend on the traditional media.

Innovate:

This is easier said than done. In a recession, one has to really devise newer and more innovative ways of doing the same old things. Let me share an incident which actually took place in Calcutta and was some months ago, reported in the Economic Times, to demonstrate what innovativeness means. In our urban centers, public facilities are generally stretched to the limits of their capacity due to large populations. The electric crematorium at Calcutta operates at its full capacity and generally, when a group reaches there, it has to suffer a waiting period (of about fifteen to twenty corpses awaiting incineration) during which there is just no alternative than to wait for one's turn. When one group was so waiting, it was approached by a person who offered to do their job faster, if the family was willing to shell out something extra. Curiosity aroused about what this chap could possibly do in such peculiar circumstances, a deal was indeed struck. As soon as money changed hands, the chap walked down the queue of dead bodies and shook the shoulders of a "corpse" lying on the stretcher at number two of the queue. The "corpse (a business partner) shook off the shroud and this family was then beckoned to avail of the place in the queue. This is innovativeness. In a recession, we must think of doing things more innovatively.

Most of the strategies that we have outlined are important during normal times also, and it is not my contention that they need to be followed only when there is an economic downturn--all that I would like to stress is that marketing managers need to address them with extra vigour during the bad times if they do not want to be like the two chaps who started off the day with laddoos and one rupee and ended with no laddoos and the same one rupee.

"Mr. Prakash Shesh, the author, has done his MBA from Indian Institute of Management, Ahmedabad after his Masters in Physics from I.I.T. New Delhi. You may send your feedback to him by choosing an option at the top right corner of this page."