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Friday, November 20, 2009

Getting Ready for 2010: Planning in a Recession - Guest Post by Barrett Sydnor

Today's guest post addressing preparing for 2010 comes from Barrett Sydnor, one of the first guest authors ever on Brainzooming back in early 2008. I've worked with Barrett on various strategic planning projects over the past 15 years, including quite a bit of quantitative industry analysis and supply/demand forecasting.

Today, he's addressing the right marketing stance to have during and coming out of a recession:

Fortune Favors the Bold.

The Roman playwright Terence wrote that in the 2nd century BC, though Virgil often gets credit because a similar line later appears in the Aeneid. Terence was probably talking about the military strategy of some emperor, but it turns out that the sentiment applies to businesses—small and large—as they face figuring out how to plan for 2010.

A natural tendency when looking at bad or uncertain times is to hunker down, keep spending to a minimum, and stay with what you have done in the past. Natural, but maybe not smart.

A Hurwitz & Associates report found that 65% of small businesses that expected increased revenues during 2009 had raised or planned to increase marketing spending. Increased revenues were expected by only 30% of those who were keeping marketing spend flat, and almost half (41%) of those who were cutting marketing spend were expecting a decrease in revenue.

This correlates with a study done at Penn State after the 2000 recession. The authors say that using what they call “proactive marketing” can allow firms to improve both capital market and business performance during a recession. They cite increased marketing spending by P&G, Kellogg, Intel, and Wal-Mart during recessions—and depressions—as a way to grab or consolidate dominant market shares.

For sports fans, one way to restate “Fortune Favors the Bold,” is “The Best Defense is a Good Offense.” You might ask, "How did that work out for Bill Belichick and the Patriots against the Colts?" While the execution lacked, he had the science—and the odds on his side (discussion here, here, and here).

In planning, as in coaching football, getting the odds on your side is really is what you are trying to do. Being more aggressive with your 2010 plan may be the way to tilt those odds in your favor. - Barrett Sydnor



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