As Brexit adds another level of uncertainty for the economy—and for marketers—navigating uncertain times can be a challenge for any company. At the MeritDirect Co-op last week, executives from three companies addressed how they manage tough times, including how they survived the 2008 economic collapse. Let’s take a look at some of the lessons learned.
Steve Bosio, president, MarketLab, a supplier of unique and hard-to-find medical and laboratory supplies and equipment.
2008 was a time of uncertainly for us. Even though people were struggling with the economy, we were seeing the opposite. We were up 35%, but then in September 2008 Lehman Brothers collapsed and one of our customers lost access to credit—our business flat-lined and it was a time when I was most uncertain about what would happen. We hadn’t seen an effect quite that instant before. I learned—boy we’re really good at looking back, but not forward.
To manage that challenge we took a real good look at our customers and trying to get new customers. We tried to get deeper into segmentation and closer to our customers, which forced us deeper into analytics and understanding our customers better
In hindsight, that was a big win: our segmentation is definitely a lot better. We’ve gotten better at listening to our customers. We got in tune with where our customers had money and where they didn’t. We really focused our product team and analytics on how to get more product specific; what grows our business is new products.
Brad Darooge, president CEO Baudville, a catalog marketer of employee recognition and motivation products.
The most uncertain times have born the biggest changes; a lot of them painful. We starting mailing a catalog and that brought us into a whole new business. 2008 forced us to take a hard look at understanding the marketplace, strategic postal rate increases, the dynamics in Washington and to change the philosophy of our sales and marketing team. What we thought was our strength—marketing—wasn’t, so we made a lot of investments in sales. That process took eight years. We’re driving a lot more new business, changed our product strategy and went after some new products. In hard times you look at those weakness with a little more focus and that can tend to inform a motivator bigger than fear. Those things can drive significant and positive change.
The process of looking at strengths and weakness is a mindset of the people in the process changes. We involve a lot of the staff and then senior leadership gets out of the building for a while and writes what the future of the company looks like and a lot of times it’s wrong. The planning process was the value, not necessarily the plan. We’re moving more towards being consumers of the new trends and the ones that work for us, but doing it with discipline and regularity I think is the most important.
Bob Runke, resident general manager Barco Products, a marketer of products for outdoor spaces.
Nine years ago, I was on a business trip seeing suppliers. We were feeling pretty good when I got a call from MeritDirect saying that our 9% postal increase now would mostly be 30% up to 40%. It was a factor we didn’t count on that came out of the blue. We started hunkering down—people, process and technology—we had to mange those successfully. We brought our partners together and asked: What do we do with this? We get this postal moment and then within six months we get the recession.
Based on tests, we needed to look at two things: What to do with the catalog and the offers. We decided to change the whole catalog format to a Slim Jim format. By doing that we could reduce our costs by 30% and keep prospecting. The preliminary response was dead wrong. We saved 30% but lost 50% of revenue. We almost killed the creative team and had to go back and say this isn’t working, go back to where we were. We almost killed them again.
This really underscored that you need to pay attention to the data and you can’t ignore it if you don’t like it. The second thing we did in the crisis was to get back on analytics and get back on numbers. We slashed our prospecting by 50% and then went to nothing in the fourth quarter. That stopped the red ink from hemorrhaging.
We had to downsize our company a lot. We cut staff by 25% and downsized more in 2009. You have this core of your business and you know you can succeed but you have to make some tough decisions. We cut circulation by 44% and that’s about where we’re sitting today.
We helped our people create a resume. I added an endorsement letter in each package saying the only reason we can’t employ them is the postal rates and the economy is threatening to close us. We mailed that package to 1,900 businesses in a close radius to the office. Nineteen months later, all the employees had jobs.
We’ve rebuilt ourselves since then. Stick with your markets. Know your competition. We’re on the brink of having our 4th best year ever in a row. If you have the courage to do the right thing at the right time, you will not only survive you will thrive.
In the middle of all that chaos, when we were hemorrhaging red ink, one of our suppliers was going to go under. They just couldn’t do it. We took our own personal money and acquired that company. Today, what they produce is generating $10 million.