Why Recession is Good: Perspective from the Pros
By now, most people understand we’re in the midst of a recession, and some executives have begun reducing their recognition efforts and/or trimming their sales incentive investment as way to weather the anticipated dip in earnings. But is that a smart business strategy? Does it make economic sense? A recent Performance Improvement Council Perspective shares the views of two industry experts
Jim Dittman, President, Dittman Incentive Marketing
We’ve ridden the crest of an economic wave for several years. But the fast and easy ride is over for now.
We’re in a recession, and we’ll all be the better for it.
We’re supposed to be in the business of finding solutions...the business of motivating salespeople to sell, customers to buy and people to work harder, smarter, more productively. It’s up to us to look around and find ways to deal with the tougher times, reasons to celebrate our business spirit…to electrify ourselves and arm ourselves and our people to deal with the days ahead.
Tougher times, like any crisis faced squarely, are healthy. Great ideas flourish in prosperous times, but they are born in tougher times. Creative solutions multiply in direct proportion to the difficulty of the problem. And when do we have more problems than when the economy is in the state we’re in now?
When the nation’s on a roll, the living gets easy. People do things from habit because no more is called for. We can make a living by just doing things well...not differently, not imaginatively...just well.
But “just well” won’t do when we’re in an economic valley. And anyone who doubts that notion need simply read the business press to see the mental agility being exercised to deal with our current environment.
Tougher times get flabby minds back in shape...make thinkers out of people who haven’t been or haven’t had to be.
The most enduring benefit of any economic convulsion is this: If we remember the extraordinary success we had when we applied heaping doses of imagination and creativity, and then continue to recognize the edge that intense, non-linear thinking gives us, we will carve out a special place for ourselves that lasts through the good and the bad.
“When are we going to get back to normal?” How many times have you heard that line uttered lately?
Well, my friend, we’re never getting back to normal. This is normal. One crisis after another. Rapidly accelerating change. Recession, inflation, prosperity. New markets being born...others dying. The only constant on which we can rely is that when the tough times abate, they’ll be followed by another problem that some will view as disaster and others will see as a challenge.
How well we deal with these tough times is a matter of attitude. They give each of us an opportunity to reach deep down inside ourselves to fulfill our own true, full, human potential.
Recessions start and end with attitude. You know how to predict them. Recessions occur when enough people believe they will occur. And if you know how they start, then you know how they end...when enough people believe they will end.
We are marketers. And we now have a marketing task at hand. We have an idea to market to our clients, our associates, our employees, our peers, ourselves.
The recession is over.
Mike Ryan, Senior Vice President of Marketing and Client Strategy, MADISON Performance Group
An economic slowdown should prompt a collective belt tightening across the corporate midsection, right? Think again. Smart businesses approach forecasted soft patches as an opportunity to get aggressive. The objective: swoop in and seize market share, strengthen customer equity and ignite employee innovation.
During a recession, customers hold the power. While they still have needs, they are also more cautious, risk averse and cost sensitive. Progressive firms are recalibrating their selling propositions constantly, but during a recession the smartest ones make an extra effort to applaud consultative selling behaviors that satisfy the buyer’s desire for added value.
Want meaningful incentive measures that protect share and drive incremental revenue during down periods? Try rewarding for increased sales penetration across key accounts. You may also SPIFF the strategic bundling of products or services across key customer segments. Consider adding a customer satisfaction qualifier and/or an internal peer nomination element to the program. Why? During down times you want to stress steps-to-success as much as the outcome itself. “Doing it right” counterbalances any lost momentum that may occur with longer sales cycles brought on by cautious customers.
Short on funds? Explain the behavioral component to your marketing team and sell the notion that your program actually reinforces the behaviors that set the brand apart. They may see your program as a cost effective complement to their customer acquisition and retention initiatives.
Speaking of employee behaviors, remember this: Recessions affect employee confidence too. Left unchecked, restlessness, ambivalence and a yearning to try something different can percolate. Businesses run the risk of losing employee mindshare at a time when they can least afford it. Companies that recognize innovation, promote best practices and nurture front line leadership are aligning employee values even during the toughest of times. They are literally leveraging the most important source of competitive advantage – their people.
No one wants a recession, of course. They can be long and difficult drains on wealth. But challenges also present opportunities. Properly designed reward and incentive programs can protect your standing in the category, chip away at a competitor’s weakness and put you in the position to ramp up quickly once the economy begins to hum again.
To read Dittman’s and Ryan’s complete comments, go to PIC Perspective – June 2008 at: http://www.peopleperformance.org/displaycommon.cfm?an=4#Recession
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