It's important to recognize that the economy affects everyone -- not just you, but your competitors as well. If a bear is chasing you and a friend through the woods, you don't necessarily have to be able to outrun the bear to survive, but you do have to outrun your friend.
The economy's cycles impact different customers (and companies) in different ways. In stormy economic times, it's vital for a company to have a good perspective on which customers are most likely to keep buying, even during the downturn, because this is what will allow them to be competitively successful. In a down economy, success will often boil down to being smarter than your competitor with respect to knowing which customers are your most valuable customers. Again, you're not outrunning the bad economy, you're simply outrunning your competitor.
When it comes to creating customer value, stormy economic times present a different set of challenges. In a downturn, many customers -- including the more valuable ones -- will be relatively more interested in straightforward savings. They won't want bells and whistles, two-for-ones, contests, sweepstakes and premiums. They will be (mostly) interested in price and value. This won't be true for all customers (because customers are all unique and different), but it will be generally true for most.
In a nutshell, to create value for customers in a weak economy you need to focus on the basics and do them very well. Don't waste your time with frills and add-ons. Be brutal with your cost cutting, and then pass whatever savings you can generate directly through to your customers in a straightforward, transparent way.
Hear more in Creating Customer Value, a SearchCRM.com monthly podcast series with Peppers and Rogers.
This was first published in September 2008