Strategies for a Recession

B. Customer Contact

Customer contact is always important but increasingly so during a recession.  Surprises can really hurt.  Inventory mistakes can affect company survival.  Contact must be made by everyone and customer information collected and analyzed including casual comments to customer service, impressions from sales reps or distributors and comments to upper management in arranged meetings or conference call events.  Don’t let budget constraints isolate sales management from the market.   

Establish contact plans and hold to them.  In a recession, the call frequency should increase.  Everyone should accept that fact that more calls are demanded.  Sales performance will require more follow-up, more cold calls, more after sales surveys, more rep visits, more management calls, and better call reporting so everyone can see the details and use that information when making the next contact.  Your competitors will also try everything to capture your existing customers and take any new business that comes available.   

In a recession, customers will need reassurance that their suppliers will work with them.  Compounding our economic problems today is the credit crisis which is making every company nervous about cash.  When loans are called, lines of credit adjusted downward or eliminated and short term loans impossible to find, a company should first turn inward and review its credit terms, payment incentives and collection procedures to insure that AR is maximized.  Benchmarks should be reviewed daily such as AR Days Outstanding and AP payment performance.  The controller must work with the sales department to keep payment terms flexible while maintaining cash flow.  Delegating AR negotiations to an inexperienced clerk during a recession can be disastrous.  Deals for partial payment may be necessary and management calls to the customer should be made sooner rather than later in the process. 

Also see:

Strategies for a Recession - The Plan

Strategies for a Recession - The Sales Call

Strategies for a Recession - The Future