Since before the Recession began, I’ve been trying to make sense of it from a marketing perspective.  It’s new to me.  And in fact it’s new to most people, as the last time we were in such a horrendous mess was in The Great Depression of the 1930s.  We know things aren’t good and we wish we could stick our heads in the sand.  But if you want to spot the opportunities and be ahead of the crowd, you need to understand the trends and what drives them.  And the economy is a major driver.

A significant chunk of the British economy is driven by consumer confidence.  When people feel happy, settled and confident, they spend money.  And that helps British (and other) businesses.  I’ve written plenty about the ‘science’ of understanding consumer confidence.  It can hinge on very simple, yet uncontrollable things, such as whether the sun in shining.

Business confidence is a slightly different animal.  And we sometimes forget that businesses are large spenders in our economy.  They create jobs, they buy products and services from other businesses and they have a large part to play in generating money.

Whether businessses spend money depends on things such as:

• Whether their customers are spending more or less
• Whether they think their customers will spend more or less in the future
• Whether they can borrow any money
• Whether they’re confident of the future
• Whether they can spot opportunities

I don’t need to tell you that funding is hard to come by for most businesses.  Which means they have to spend from their cashflow.  This is like you spending from your wages and not using your overdraft or credit card.  It limits how much you can do and how much you can grow or invest in the future.

And the perfect storm is that business owners have been reading negative news for the past three years.  Almost every ounce of positive energy has been tested and the European ‘crisis’ is exacerbating the problem.  Europe is a major trading area for British products.  If we can’t sell to Europe, some of our businesses can’t grow.  And if they can’t grow, they can’t spend.  And if they’re not growing, they’re not creating jobs.  As I said, the perfect storm.

But there is a HAPPY ENDING… There are many opportunities for marketers and businesses in the current economy.  As marketers we must understand what is happening and what is driving it, so we can spot those opportunities and help the businesses we work for.  As we improve our knowledge, we can better target customers who are spending and we can create better products and services for which there is a need.  Sales and Marketing have never been so necessary than right now…and we have a real part to play in the recovery.

It’s no wonder people are confused is it?  On the same day, we had news articles telling us about the country falling back into recession alongside apparently conflicting articles showing consumer confidence is rising.  So what is actually the case – and more importantly, what does it mean for your business?

The first thing to realise is that both articles are factually correct – based on the related research and statistics:

• A ‘recession’ is when the country shows negative growth for two three-month periods in a row.  (A piece of information we didn’t know until the recession happened and now it seems even our pets have a grasp of this concept.)
• Consumer confidence is much more difficult to measure.  And it’s based on a diverse range of factors including ‘perceived wealth’, the weather, an individual’s mood, people’s work situations, people’s family situations, the local high street and community activities, the local Council… the list is literally endless.

The word ‘perceived’ is one of the most important both in the context of the paragraph above and also in marketing as a whole.  Perception is a very powerful thing… if we perceive we are better off, then we act that way.  And the opposite is also true.  So you have a number of people who have benefited from the recession through decreased mortgage payments, but they perceive  the country to be at risk, so they save that extra money instead of spending it (as they would have done prior to the recession).

Unfortunately for the UK, the same thing is happening at a country level, caused by the knock-on effect of the so-called ‘European Debt Crisis’.  Countries outside Europe ‘perceive’ Europe to be a risk at the moment, so they may choose to do their investing elsewhere.  If they do invest here, they expect higher returns for the ‘perceived’ risk.  Simples!

But what does all this jargon and hyperbole mean for your business?

Well.. it depends how your customers perceive themselves and their position.  If they are busy / wealthy, they probably feel OK and are willing to spend and invest their money.  If they perceive they are doing poorly, they will be saving their money and cutting costs where possible.  If you don’t know how your customers are feeling right now, you should perhaps be trying to find out.

Good luck – and shout if you need assistance.

I attended a fabulous conference last week with the Institute of Director,s and their Chief Economist suggested that 2012 could very much swing one way, or the other.  The single most important aspect of the direction of ‘swing’ will be what happens in Europe, but the single most important element of what happens in the UK will be consumer confidence.  And how that will develop this Spring is anyone’s guess.

In my professional opinion (for what it’s worth), I believe people in the UK are sick of the recession.  The media and the Government have been banging on about it for years now and we’ve all heard enough and want to get back to ‘business as usual’.  But what will it take for that to happen?

Sunshine is a great start.  People feel better when it’s warm and sunny.  They’re happier, they see a better outlook and, crucially, they spend money. The Lake District was buzzing with tourists this weekend and it’s fantastic to see – people visiting will generally spend money, often with small, local companies.  Many of those companies were recruiting seasonal staff – who spend their wages in the local economy.  And so it continues.

What can we do as businesses to aid the recovery?

Stop being negative.  It’s easier said than done, but we have to play our part and talk the country up.  Confidence really can make the difference and the IODs Chief Economist, Graeme Leache, intimated that what happens in 2012 is likely to set the tone for the next decade.  I don’t know about you, but I want the next decade to be awesome… so let’s do our bit and give confidence the push and support it needs.

The sun in the sky really could make a difference to your bottom line, but we’ve got to back it up!

It’s the time of year when we typically start thinking about our business plans for 2012.  We have a good 90 days left prior to the Christmas break, which is a great period of time to finish the year with a flourish and plan for growth in 2012.

And I hope we’ll be planning for growth in 2012, rather than survival.  It’s that mindset that will help us pull free from the recession.

So what can the history books teach us and what trends should we look out for?

I’ve always said that the 2007 Crash has more in common with the Great Depression of the 1930s than with subsequent recessions, so I’ve looked back at things that happened post-depression to get a feel for what some of the top trends could be in the next 6 months.

1. People are looking for escape, so books, games and films are all popular.  As are gambling and drugs / alcohol (sadly).  We want a few minutes to relax and forget our troubles and it’s likely this will continue through the winter months and at least into Spring 2012
2. Health became increasingly important after the Depression, perhaps because of the subsistence diets which led to increased cases of scurvy, rickets and TB.  I suspect the same will be the case next year, as people witness more friends becoming ill through stress and worry; meaning they start to look after themselves better
3. People are already questioning their beliefs in democracy and the use of endless credit, with some looking for a simpler life where they live within their means and have a smaller impact on the environment.  Whilst there will be smaller numbers who take this to extremes, their influence on society as a whole shouldn’t be overlooked
4. Allotments and home-grown produce have boomed this year and I suspect this will continue.  As people begin to learn about the seasons and the higher nutritional values (and taste) of local produce, this trend may well continue into supporting local growers and a resurgence of the local markets that had lost ground to the convenience of the supermarkets
5. Make-do and mend and second-hand markets are likely to continue to thrive, as people realise they don’t have to buy new to get a great product and an even better deal.  Charity shops now compete on our high streets and no longer give clothes and goods away cheaply.  They now offer value and a feel-good factor in that you can save money and donate to a good cause at the same time.

If you can tap into these trends in your business, there should be plenty of opportunities for you.

The one trend I’m hoping isn’t repeated based on the 1930′s history is the Second World War; the reamament for which pulled us out of the Great Depression.  Let’s hope the government come up with a better plan than that one!

About six months ago I started telling people that the Royal Wedding would be the official end of the recession in the UK…and now it’s here.  So am I right?  (I’d love your comments!)

I must admit that for a time I wasn’t convinced myself, but I knew that if I told enough people who told enough people, it would become a self-fulfilling prophecy.  So I stuck to my guns and kept passing on the story.

And a few weeks ago, what do you know, I started to see the green shoots.  The sun started shining, people started spending money and my clients started reporting increased forward-order books.  We’ve even started spending ourselves – so we’re doing our bit (and I hope you are too).

You see…many people are better off than they were before the recession started, but they haven’t been spending.  The media have been drowning us in bad news for the past two years and we’ve started to believe them (heaven forbid).  All we need to continue the fight back from recession is confidence.  The money’s there – we just need to believe it as business owners.  And start chasing it again.  We need to stop discounting so heavily and bemoaning the financial situation – if you act like you’re out of recession, guess what, you will be!

There’s one caveat to this…don’t tell the banks.  They don’t deserve to know after what they did anyway, but we don’t want them scuppering us and putting interest rates back up and taking people’s spending money instead of it filtering into the business community.

Although we’re being told the country is coming out of recession, businesses in the North have noticed a tightening this year in terms of what consumers are spending and it seems the recession has finally reached our shores.  That said, there is an optimism that the worst is over and things are beginning to improve; albeit slowly.  So where are customers spending their money right now?

Both Next and John Lewis posted great results a couple of months ago but, more recently, Poundland has also returned an increase in their annual profits.  Whilst this paints a confused picture, it seems there may be some patterns:

• Consumers are looking for value, but they only want to buy once.  So, they’re turning to brands such as Next and John Lewis and buying fewer, quality items that they know will last.
• For everyday staple items, such as cleaning products and toiletries, they are seeking out value.  Interestingly, the spokesman for Poundland said they’d seen the largest increase in sales of branded items – so people are still looking for the brands they trust – just at the best prices.
• Whilst people are spending less on meals out, the cinemas have been thriving.  The supermarkets have also been able to adapt to this trend with their ‘Eat in for £10′ offers and sales of the ‘Finest’ ranges within the larger food retailers have been strong.  It seems people are happy to spend a little more and treat themselves at home if they aren’t going out as often.
• There’s also an argument that customers feel slightly guilty for spending money when they perhaps should be saving, or for buying something frivolous when others are struggling.  As a result, it’s expected that promotions may shift to emphasising the ‘deserved treats’.

The key thing to remember is that customers are buying.  Many are better off as a result of the drop in interest rates, so they are spending – it’s just a case of where they’re spending.  And, if they’re not spending with you, perhaps now’s the time to look for some marketing advice.

The ripple effect of the credit crunch appears to be lapping at our shores so, first things first… if you’re finding it tough to be in business at the moment and people are taking longer to say ‘yes’ (and even longer to pay,) rest assured – you are not alone.

Opportunities are out there for companies offering high quality products and services, but they might be slightly harder to reach – and you might have to be patient.  Donald Trump warns of the dangers of losing momentum, so what can you do to keep busy and ensure the income keeps flowing?

Our top ten sales & marketing tips are:

1. Spend your time on income-generating activities – sales / marketing / chasing bad debts etc. are all examples of jobs that bring in money.
2. Boost your sales and marketing activity. Now is the time to invest – especially if you’re still busy.  Autumn and winter will be upon us soon, so ensure you have sales and marketing programmed into your schedule, every day.
3. Put a system in place to chase bad debts.  Sending statements and calling people may mean you’re paid before others.  If it gets beyond that, we know a solicitor who’ll send a letter of claim for just £5 – this can be a very cost-effective way of ensuring you recover any outstanding debts.
4. Get busy.  If you’re quiet – but you’re still working 9-5, you need to work a bit harder.  Get out of your office and speak to people. Visit networking events and meet new contacts.  You can visit many of them for free – and you’ll be surprised who you may meet – and how willing people are to help.
5. Call old and nearly customers.  People who haven’t bought for a while can be a valuable source of sales.  How long is it since you spoke to your old customers?
6. Beware cutting your prices – this doesn’t usually work and just serves to cut your profits.  This means you have to sell many more products to just stand still and you probably won’t be able to increase your prices again for years.  It also devalues your whole industry, so do this only as a last resort.  (If you want to learn ways to maintain your prices, come along to one of our free marketing seminars.)
7. Offer good customer service.  This is often overlooked, but it’s incredibly important to your customers.  How could you add a ‘wow’ factor to your service and give people a reason to buy from you again?
8. Ensure you have an answerphone – with a great message.  You can’t afford to be missing any calls, at any time.  You’d be surprised how many businesses we speak to who want more customers but never answer their telephone.
9. Get back to people quickly.  If someone calls, makes and enquiry, requests a quote… you need to respond faster than your competitors.  If people want something, they generally want it yesterday, so keep on top of your paperwork.
10. Say thank you.  If someone gives you a piece of business, or recommends you, or does a great job for you, say ‘thank you’.  They’re two very tiny words, but they’re probably the most powerful two words in the English language.

Good Luck.  Work Hard.  And shout if you need any specific advice to generate more customers for your company.

Are things really getting back to ‘normal’?

According to a report by research analysts, Nielsen, champagne sales are up by 14% on 2009.  On the face of it, this appears to be great news for business – consumers are spending again and we can look forward to a recovery.  But when you look behind the numbers, there may be a slightly different story…

Whilst sales are up, the number of bottles sold are down slightly on 2009; reflecting the offers retailers have introduced.  Some supermarkets have been selling champagne for as little as £10 per bottle.  So, are consumers simply hunting for a bargain?

The marketing industry is watching customer behaviour very closely at the moment – it appears that consumers are being driven by quality and value for money, which may explain the champagne figures.  So what does this mean for your company?

• If customers are looking for quality, that’s what you need to offer
• People are hunting around and searching for bargains – but they want a quality offer too.  So you need to be competitive, but you should also sell the longevity of your product / service
• It seems people still want to party – the top selling champagne is Moet & Chandon, so people aren’t all buying the cheapest brand they can find.  They still want to impress their mates – so branding will continue to be important in 2010 as well

We’re not out of the woods yet, but stories like this hitting the major news headlines will help people feel they can maybe spend a little bit more.

As Tesco posts a 10% increase in pre-tax profits this year, Sir Terry Leahy was interviewed on the BBC this morning and told viewers confidently that he believed the country was coming out of recession and that the recovery was underway.  Which is great news for everyone; not least Gordon Brown.

But what does it mean for your business?

Tesco posted profits of £3.17 billion for 2009, but for the vast majority of British businesses, profits will be well below that level and many have sustained heavy losses in the last year; in terms of redundancies and customer / supplier losses.  So what can most businesses look forward to?

Recent information from the Chartered Institute of Marketing has been looking at how customers have changed with the recession.  They give trends to look out for, as follows…

• People are still wary of spending.  In spite of some customers being better off due to falls in interest rates, they are still watching their cash.
• That said, credit card borrowing is rising again, as we find the credit habit hard to beat (despite the fact that living beyond our means helped create the recession).
• DIY and ‘Make Do & Mend’ Trends are still popular
  
• Consumers seem to be hunting for value for money – both Next and John Lewis recently posted rising sales figures, although some other high street retailers are struggling.  It seems people are buying fewer items, but looking for quality and items that will last.  The question is whether this will be a long-term change in buying habits.

With these trends high in the minds of many consumers, your business needs to review its sales messages, as the country starts to recover.  Are you selling what people want?  Are you giving people the best value for money that you can?

There will be plenty of opportunities – you just to ensure you position your business to take advantage…

Almost one in three public sector employers plan to shed jobs this quarter, according to a report by the Chartered Institute of Personnel and Development (CIPD).

The industries most severely hit are expected to be public sector, defence and public administration, but it isn’t all bad news…

As is often the case, when public sector dips the private sector picks up, and the report also found employers in this sector expect to see staff numbers grow for the first time since the start of the recession.

The message behind this story is more about your marketing and your audience – who are your targets, and do you need to alter your approach (if you can) in 2010?