Tuesday, February 5, 2019

Prepare for the Next Business Cycle

Recognizing what business cycle your company is in should influence your planning and management decisions. There are four distinct macro business cycle trends: slowdown, bottom, growth and peak. Each requires you to apply different tactics and strategies to confront economic conditions that exist in your market.

During good times, companies may look into investing in additional staff, buying new equipment to support and assist in more efficient production or look at adding new products and extending market reach. I have seen manufacturers keep a laser focus on issues regarding production, product procurement, staffing and backlogs. “Make hay while the sun shines” is an old adage that applies, but it is also important to strategically prepare for the future.

Ample order backlogs now are not guaranteed in the future. We all would like to believe that conditions will remain strong forever, but as we all know, they unfortunately will not. A smart company will make investments to better protect them in times of lower demand.
During the good times, many may question why they should invest in marketing. The most important and best time to invest in marketing is during the good times.
Marketing initiatives that you enact now will strengthen your market position later and put you into a competitive position for when economic times are less favorable.
Customers’ buying decisions are driven by many different factors, logical, emotional and some economic and marketing driven. We all know that a home is a major purchase and consumers’ buying cycle of a home is almost always slow, sometimes taking years before buyers make their final decision to purchase a home. This is why marketing tools to engage and build relationships with customers must begin early and be sustained.
There are no silver bullets in marketing. Marketing must be tested, applied and then measured for effectiveness. In many cases it can months or even longer to see the full effects and dividends of marketing initiatives, which is why marketing initiatives should begin before economic conditions change. The effectiveness of inbound and outbound marketing strategies are best tested in good times, when you are in a better position to invest and have the cash flow to implement and to measure cause and effect. Scrambling to acquire new business during economic contraction, when operational consolidation and preservation is in order, is difficult, if not impossible.
Reed Dillon is the owner of the company Creative Brand Content and is a marketing consultant to the housing, construction and system-built industry. He can be reached at reed@creativebrandcontent.com or at 540-488-2978.

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