Downturn

The stock market has correctly predicted 12 of the last seven recessions.

Should we have more faith in Goldman Sachs, Gartner, IDC, Regent, MGI Research, the Financial Times and others in forecasting financial apocalypse? No, we shouldn’t.

But fail to put the two together and you’d be dumber than my cousin Earl, a man with an IQ so low he can only find employment as a congressman.

Businesses and consumers alike change their spending priorities when times are good and when they are not. The world economy is still absorbing the effects of high oil prices (driven as best as I can tell by pure speculative fervor). These inflationary pressures are just beginning to leak their way into the free economy maelstrom as the market bottoms out from a sub-prime induced credit crunch. The net effect is that everyone is beginning to rein-in their spending, with the glaring exception being holiday shoppers who seem to be spending money faster than Larry Elison on an acquisition spree.

What happens next in technology marketing is as predictable as a Russian election. As revenue growth drops into low single digits or even goes negative, and as calls for market budget cuts are issued from the corner office, technology marketing folks start the review their fundamental strategy. I have seen it before — my best year as a marketing strategy consultant was in the dot-bomb era.

The reasons are fairly obvious: when times are good, when buyers are abundant, when cash is flowing, everyone assumes their strategy is good. When the economic river runs dry, they assume their strategy is faulty. The truth is that when times are good, the motives of customers tend blur and your external communications become muddled as you chase trends, fads, and even your own hype.

Technology marketing in troubled times, when spending on tangent differentiation is not an investment priority, requires reviewing what really drives your core customers. Customers in each segment tend to have very similar motivations, and these are based primarily on how they make money. Refocusing your efforts on helping them make money in ways in which they are already competent is a “back to basics” system that works and cushions economic downturns.

I hear there is going to be a recession. I decided to not participate.


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