Those of you who read my weekly column regularly know that I’m forever the optimist. That being said, I’m also a realist. I’m also old enough to have lived through several recessions and know that the business cycle we’re now in is a recession — and it’s shaping up to be a bad one. I also know that, just like before, most of us will come out of it. Recessions are to businesses what forest fires are to forests: necessary, evolutionary cycles that are painful, cleansing and, ultimately, beneficial.
During such cycles, the weak fold or merge, and the survivors “retool” to become more productive and effective. The first step is to decide, realistically, which group you’re in. Then, plan accordingly.
The next several months, possibly all of next year, are going to be very difficult. Even though I have all the faith and confidence in our industry, my sense is now is the time to be brutally honest and realistic with yourself. Gather your trusted team, and deal with the facts at hand. The numbers don’t lie.
I suspect most of you have had a very challenging October, with November not looking much better. You find yourselves wondering how bad will it get, how long will it continue and how long can you last? All are good questions. Like any good businessperson, you must be prepared for the worst and hope for the best.
I’m sure you and your fellow managers have been thinking about some of these issues, but if not, now is certainly the time. Action’s required now. Take a look at the following areas to address.
* Circulation is our lifeblood, so drastically cutting it is always a bad move. Trimming the fat from your mail plans, reducing the cost of your mail pieces and other cost-reduction moves that don’t impact circulation are needed now.
* Staff reductions are inevitable. Now is the time when performance counts. Your marginal contributors must be given a chance to be successful somewhere else. Next to mailing costs, payroll is usually the second largest expense of a catalog company, and the only place where meaningful cost reductions can be made quickly.
* Apply technology. When you look back over the past 30 years of cataloging, the big productivity improvements have been made when new technologies have been applied. Don’t be afraid to invest in productivity-boosting operating software, database modeling, Internet marketing technologies and other places where new technology has changed the game. Remember this: The definition of insanity is continuing to do the same thing and expecting a different result. Adapt now.
* Outsource to save money. It may be time to finally give up control of some function you do in-house that could be performed better and cheaper by a third party. Are you still really the best person to run your call center, HR department, IT department, warehouse?
* Focus on your core strengths and what’s working. Sometimes, by maximizing your successes, you can do greater good than cutting the things that are going poorly. Focus on the best two or three things that are going to make the big difference.
* Communicate. Communicate. Communicate. Your employees are worried, too, and need reassurance, confidence and, most importantly, direction. Never leave the helm in a storm.
* Have faith. Those who remain positive and focused in the face of adversity or insurmountable odds are true leaders. If your sales have dropped 20 percent in one month, the challenge may look daunting, just as it did immediately after Sept. 11. At the same time, remember that “this too shall pass,” and you’ll, hopefully, emerge leaner, meaner and stronger than before. Just like the forest after the fire.
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at email@example.com or (954) 383-5221 (direct line).
Terence Jukes is president of B2B Direct Marketing Intelligence LLC, a strategic B2B direct marketing consultancy based in Fort Lauderdale, Fla., that services B2B catalog company clients in the U.S., Canada, France, the U.K. and Germany. You can reach him at tjukes @ b2bdmi.com or (954) 383-5221
Comments or questions are welcome.