Recession Survival: Find a way to Paint the Grass Green

by Matthew Kennard

Do you see the glass half empty or half full? How you answer that question may impact your success in a tight economy.

Readiness isn’t just about disaster preparedness; it’s also about being ready for opportunity as well as adversity. If you can anticipate or plan for a downturn in the economy, yours just may be the business that not only survives but thrives. 'Every cloud', goes the proverb, 'has a silver lining.'

Be Reactive

We recently heard the story of a lawn-painting business in Sacramento that turned the flood of repossessed homes into a sizeable business opportunity. The growing number of these homes on the market due to the subprime mortgage fallout has presented banks with the challenge of maintaining the lawns during the processes of repossession and resale in an already depressed economy. This lawn-painting business saw an opportunity to market its services to the banks and paint the lawns green so maintenance was kept to a minimum, and the green lawns increased the curb appeal of the homes and spurred interest among buyers.

Consider too another example of how one business took advantage of the competition’s lack of service. With the economic slowdown hitting the retail sector especially hard, many retailers are filing for bankruptcy protection or going out of business. The Sharper Image recently declared Chapter 11 bankruptcy and announced that it would stop accepting gift cards (which is typical of businesses that reorganize and treat gift cards as loans to the company and not as cash).  The company’s rival, Brookstone Inc, immediately capitalized on the situation by offering to exchange any of The Sharper Image gift cards for 25% off any Brookstone purchase no matter the amount of the gift card or the cost of the item. Said Brookstone spokesman Robert Padgett, “We are here for the long haul, and thought it would be good to let them (The Sharper Image customers) know.” Brookstone pounced on the opportunity to earn the appreciation and loyalty of frustrated customers of The Sharper Image, sell merchandise during a recession, and enjoy the positive press from their decision.

Be Proactive

Creating an opportunity from adversity is one way of weathering an economic downturn; proactive strategic planning is another. Despite the slowdown in construction in housing and other projects, Chris Turner, president of Northern Nevada Excavating, says that 2008 will be his busiest on record because of smart positioning. Turner says that he purposely pursued contracts in commercial and industrial construction when he launched his company five years ago rather than the new subdivision work that was easy money and steady work for several years. Now, as the subdivision game has slowed, he is entrenched and made a name for himself in the commercial, industrial and multi-tenant market. 

Controlled growth during the construction boom also helped his company stay solvent. Rather than buy a lot of equipment to meet a short-term demand, Turner’s company purchased some new machinery as well as some used to be diversified and keep expenses low. Now he has been able to purchase several pieces of heavy equipment from area companies that have been forced to liquidate due to the construction slowdown. Says Turner, “I watch fuel prices, pipe, aggregate, cement; I watch everything and am looking six months to a year from now. You have to strategize the economy.”

Looking for more ways to optimize your efforts during an economic slowdown? Consider these tips from MarketingProfs.com:

• Spend smarter: Make sure you can create a compelling business case for every expenditure.
• Double down on your current customers:  In a downturn, it is often more practical to provide more value (and get more in return) from your current customers than trying to land new customers.
• Outsmart your competitors:  If you want to win market share from your competition, pay close attention to what’s happening with your target markets to see how customers are reacting to the recession so you can act early and often with changes in product, pricing, and positioning.
• Invest in growing marketing segments: There are always market segments that grow faster than others in a downturn; it’s up to you to determine whether you can win the business. You should also reduce your investments in those segments that will get hit the most in a downturn.