What Credit Crunch?
Since the middle of 2007 fears have been growing about the effects of rising interest rates and the impact of the ‘credit crunch’ on corporate and personal insolvencies. Stories from the USA tell of problems in the sub-prime mortgage market leading to record numbers of home repossessions, an increase in bad debts and an upsurge in bankruptcies.
The financial press has been predicting that, as a consequence of the crisis in the USA, the UK must expect a period of recession and a tightening of the credit belt. The credit crunch, market turmoil and national/global recession, terms all too frequently heard today -if not a full brown recession then a definite down turn in the market.
A survey of Institute of Director Members in Yorkshire, by DPA Marketing, shows that although none of them have experienced any signs of a downturn at first hand (Reduced sales, cash flow problems etc) apart from on the news, they all expect to be affected by the down turn in some way.
In the 1980’s the knee jerk reaction was of cancelling all advertising, sacking the sales staff and returning the water cooler. We have learnt a lot since these times. Advice to concerned business owners can be simple and to many experienced directors, in some ways common sense:
1. Make sure you have a strong and protected cash flow. As a professional business manager you should be doing this already!
2. Increase your sales efforts, carry out more marketing. If there is going to be a smaller pond you want as many fish as you can get out of it. Better still, focus on the fish you have already and get more sales out of them.
3. Be positive. Doom and gloom can actually bring downturns about. If you are positive your customers will be too.
4. Don’t lower prices without very careful thought. Price is the main determinant of your profit. By all means be cost effective for your clients but don’t lower your prices just ‘because there might be a downturn’.
To date enquiries year on year have actually increased for sectors of the marketing fraternity. 1 Stop Telemarketing services has more like for like business starts and enquiries than at the same time last year, with more long term projects being started.
Darryl Gould is a chartered Marketer, Guest Lecturer in Direct Marketing at Huddersfield University and Vice Chair of the Institute of Directors South Yorkshire.
He is also Managing Director of Yorkshire based 1 Stop Telemarketing Services Ltd.
