So recession goes on and everybody wonders when the things will become normal again. Nothing seems to work anymore, the sales go down, business confidence goes down, even prices go down (at least here in Japan) and you reach new bottoms every day (just when you thought yesterday was just as deep as you could possibly go). Double dip recession is not a thing of the past anymore, all of sudden becomes a looming reality.
recession
People and businesses must find new ways to go through this, survive and make sure the sales will grow bigger in the years to come. What to do?

1. Deliver value.
Past years of growth have made people lazy. Because business was good we did not have to think of new ways to attract customers and increase sales. You were almost guaranteed growth just by being in the industry and clients would come to you and ask for business. Would a client go away? No worry, three new ones would take his place immediately. High maintenance clients were not cared properly, because it was counterproductive and time consuming.

This has all changed now, companies must upgrade their products and services. The clients have become reluctant to spending and unless they get the bang for the buck (or for the yen), they will look elsewhere. Persuading the clients to buy our product because its better than others' must become already a full time job.

2. Differentiate
When people have less money, they don't stop spending altogether. They become picky and discerning. They think twice before spending and will choose a product that brings them most satisfaction. If everybody sells the same product, which one will the client choose? You need to differentiate enough from the competition, so that the client will pick your product. The old slogan "Our company produces t-shirts, so we will sell t-shirts" is not working anymore. What about the size, color, design, age target, material, quality? These are all areas where we can differentiate.

3. Don't trade on price
The easiest trap is to say "I'll drop the prices, then the clients will come because my product it's cheaper than my competition's." This is the natural way to think, because we tend to believe that because budgets are more tight, dropping the prices will bring us more clients or increase our sales.
This is wrong. The recession will not make people stop spending. We will become aware of the quality and we will spend on those products we really think are worth of. We want to make sure that the products we buy are worth of, have good quality and will last. If dropping the prices can increase sales, then the companies selling cheap would find the way out of recession much faster than the rest, but i never heard of any company that increased sales by dumping the prices. To increase the cost/performance, the firms don't have to drop the prices, but rather to improve the performance. If necessary, drop your costs, find other channels and vendors and manage your spending better but you should always maintain your price levels.

Besides, once a company reduces the prices, it is very difficult to bring the prices back up where they were before the recession. There is no definite point or moment of time when you say "from now, recession is over so my prices are back up." It is very difficult to justify these high prices again.

4. Be innovative
It is very important during a recession to find new ways, new systems and new channels. Old ways don't work anymore, so you have to go around this and find new ways to attract customers. Firms should not be shy to try new things, new sales methods, offer their clients new products and services that will make them loyal. The clients will appreciate what you do for them during difficult times and will stick with you ever after. Recession is often a time of change for businesses, just like for relationships. When things are happy and rosy, there is little reason for a relationship to go bad, but its during hard times when it is tested and tried.

Conclusion? The recession is as much a time of change as it is of reflection. It is what we do now that will define us in the future and our future shape will be decided by our actions now. There is a not one-size-fits-all solution, we should look at the current economic situation as a chance to change ourselves rather than bury our heads in the sand and wait for the storm to pass.

radu