Raise the bridge or lower the river?
Raise your top line or lower your expenses? Both? 2/3 of one, half of the other?
The problem with raising the top line is that it’s expensive and risky. Lowering expenses makes sense – for a while — but it’s not a career. Even in Shanghai we now have enough confirmation of the go-slow economy to go straight to the Big Cuts and get it over with. After that, there is a limited return. CEOs shouldn’t be calling a senior staff meeting to discuss ways to save $6.50 a month on paperclips.
Cost cutting will only take you so far. If we were talking about a problem that we knew was ending soon, you could make it work. But it looks like we’ll be in lousy times for at least 6 months. Cost cutting shouldn’t take that long. If you want to still be in the game when this is all over, you have to find ways to reflate your top line.
Budget – Let’s do a little simple reality-based math. You’ve cut advertising; marketing & promotion budgets by 75 – 99%, and you expect sales to stay strong? Either you were doing some really poor marketing before this or you are blundering into a classic bear-market trap – pulling the fire alarm too early. You can ride your guys hard now – but after 6 months of listening to you rant your sales team is going to grow a tough shell that protects them from you.
Marketing – cheap is good, but don’t go crazy about the marketing budget. You need to stay visible — even if now can only afford a candle in the window instead of the spotlights you used to have. Are you devoting the time to Social Networking? Linkedin, Facebook and Xing are all great ways of reaching the people you care about – but doing it right takes a lot of time and the right kind of energy. Don’t start SN marketing unless you are serious about following through – otherwise it just looks like you don’t care.
Sales – Two great ways to demoralize your team are to expect failure or require impossible levels success. Times are tough and your guys need to know that they have your support. Remember – we’re still in the early days of the downturn, and in China we are entering the dreaded Holiday Dead Zone (from around December 15 to Feb 15). You can only threaten a guy’s job 3 times before losing credibility – so use that power wisely. Try a little encouragement – and look at the wide end of the sales pipeline a little more carefully. Your sales guys are probably all sweating the qualified leads that stand a chance of closing – but is your machine still feeding the pipeline with fresh leads? Run a sales contest that encourages your guys to prospect and network more – and let them win a little cash in the process. Especially good if commission and bonuses are going to be weak.
Promotion – Keep traffic high. People are on the lookout for business failures. Lower prices or change your offering enough to generate steady, predictable traffic. Even if it just breaks even, any special deal, informational seminar or give-away is worthwhile as long as it brings in fresh prospects and generates positive buzz.
Be an expert. Your top people have a little more time on their hands than they should? Write an article, a letter, or comment on someone else’s posts. Do you have an interesting take on managing in China? ChinaSolved.com is always looking for guest writers. Drop us a line for details at admin@chinasolved.com, or go to our Facebook group and get in touch that way.
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