Since hope isn't enough to solve these problems, you must be prepared with a definitive course of action as business conditions deteriorate. So what's your plan? What's your contingency plan if conditions get worse or stay unfavorable for all of 2009? Managing your costs and cash flow are more critical now than ever. Here are few ideas to consider.
- Your payment days outstanding are likely to increase. Monitor them closely, and be prepared to add collection efforts and/or incentives for faster payment.
- Most credit-granting companies are restricting credit. Now is the time to review your credit-granting policies. While you don’t want to inhibit sales, you don’t want to sell something that you won’t be paid for either.
- Stay close to your outbound calling folks. They're the front lines and can read the spending mood of your customers by segment.
- Provide incentives for your best customers to consolidate all their business with you.
- Reduce inventory levels, especially in higher-ticket items. Refine your “just-in-time” delivery from vendors. If you can take 10 percent of your inventory value down, you'll save a lot of needed cash.
- Manage your payroll expense in line with sales. Create flexibility in payroll by using temps or contract employees. Consider a salary freeze or even a salary cut as alternatives to laying off valuable employees. Your employees watch the news, too, and will likely understand even if they don’t agree.
- Look for lower-cost mailing pieces for those marginal segments of your prospecting universe. Test postcards or solo mailers vs. a more expensive catalog to your online buyers. Make sure you co-coordinate any pay-per-click advertising with your mail dates and the mail dates of your competitors.
- Make sure your inbound call-center reps have many upsell and cross-sell offers, and are training in consultative selling. There's no better time to sell than when a customer is ordering.
- Always remain confident, calm and purposeful in the face of adversity. Remember, your employees are counting on you to guide them through any business storm.
After you've done all the above, then be hopeful. History shows that neither bad times or good times last, and we'll come out the other side at some point.
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 firstname.lastname@example.org or (954) 383-5221 (direct line).
Comments or questions are welcome.