Don't take the ostrich approach

After my last column, one of my contacts rang me and told me that it sounded like I thought the world was going to end next year. As far as he's concerned, that's good news as his business is brokering unsold stock. But let me make it clear, I don't actually think 1999 is going to be such a horrid year for business - I just think it might be a very confusing and frustrating 12 months, particularly for the vendors. If there is going to be a recession, we are probably in it already, but it will be global vendors that struggle most if demand clogs up and they find themselves with too many systems.

And my contact will be quite happy with that. Meanwhile, business life will go on in the UK, there's no doubt about that and with the year 2000 and the euro approaching, resellers ought to find plenty of business out there. But no business can afford to rest on its laurels and I certainly don't recommend a cutback in activity for dealers. The quiet time is probably the time to make the most noise.

The signs are that people are being more cautious about how they proceed next year. But if they disappear during the lean times, they will not be as visible when the market picks up again.

According to research conducted by Profit Impact Marketing Strategy (PIMS), companies that increase their profile during a slump do much better when it ends than those who cut back.

PIMS talked to 1,000 companies and found that businesses which increased their spending on marketing during troubled times increased their return-on-capital (ROC) by and average of 4.3 per cent as they came out of the fallow period. Those who kept spending at the same level increased their ROC by only 0.6 per cent and those that cut back saw the return fall by 0.8 per cent.

The premise is that during difficult times the company that has the highest visibility will be the one that everyone turns to when they come out the other side. The others disappear from view or seem to have been less resistant to the pressures of a recession.

This is obvious stuff really. What would happen if a recession did bite and Hewlett Packard and Dell increased their advertising and marketing, while Compaq and IBM cut theirs back? How might users feel? I think they would feel more comfortable about the former companies than the latter ones.

If some companies are more prominent through advertising than others during the recession, the perception will grow that the first companies are doing better than the others. At the end of the slump, that perception will have taken root - it will be too late to change it before the market picks up again.

Resellers are notoriously bad at marketing, which is crazy because we are in an industry that is, generally, very good at it. It's also crazy that most dealers have Web sites that are simply awful, tell you next to nothing and don't sell the services on offer.

So perhaps it is time to smarten up the Website, revamp the image and get your name out in the press.