In February’s edition of Harvard Business Review, there is a wonderful article titled, “Seize Advantage in a Downturn” by David Rhodes and Daniel Stelter. They outline a number of activities to do during a recession…The top actions listed under “Aggressively Manage the Top Line” include:
1. Revitalize Customer Retention Initiatives
2. Reallocate marketing spending toward immediate revenue generation
I find many organizations don’t tie these two together like they could. Under any market conditions, this should be the priority, but in recessionary or perilous times, it is a must. The way to hold the line on top line and profits is to identify ways to retain your current customers (3-5 times less expensive than acquiring new customers) and sell them more. Additional sales to current customers are typically much more profitable. This is due to many factors, including: usually less competitive, faster to revenue recognition: and the more you sell to any customer, the more difficult it is for them to discontinue your services.
Check out the article and see how other firm’s are applying these principles effectively.