Navigating the Financial Crisis

Lately I’ve been flooded with questions on where the communications market stands in light of macroeconomic conditions. I do believe there is risk to all sectors of the global economy. But for us, the immediate question we must ask is — how do we benefit from such a scenario or, at best, how do we tread water so our sales, revenue and income does not decrease?

Most importantly, you must focus on areas which save your customers money and make them more productive. UC, telepresence, workforce automation, FMC and other technologies pay for themselves quickly. Also, SIP trunking is a natural in this market, since its saves your customers money and you get a recurring revenue source if you are a service provider or reseller. Mobile banking and WiMAX (News - Alert) are on fire, and emerging markets and rural America are ripe for wireless broadband. Moreover, the continuing explosion in mobile devices and web browsing increases wireless services opportunities. Given the booming mobile application market, you need to have an application which works on the iPhone, RIM devices and eventually the Gphone — and don’t forget about Windows Mobile or Nokia (News - Alert).

That said, here’s my strategy for making sure you come out the other end of a slowing economy in a better position than you are in today:

Conserve Cash: Obvious, but how you do it is crucial. Don’t cut your PR, marketing or R&D by more than a few percent. If you must cut a bit more, do it incrementally to R&D. That’s because “feature wars” among vendors are less important than explaining to customers why they need to buy your products. Also, keep in mind that every company to which you sell now must engage in more internal scrutiny before they buy. You need to reinforce sales with more marketing and sales efforts. To survive in a slowing market you need to keep selling. If you’re too heavily R&D-focused and don’t do marketing and PR effectively, immediately hire an agency to help you.

Become More Productive: Operate at 100 percent efficiency. Cut off your dead wood. Do it today. Let the complainers and high maintenance people go. Believe me; it will work out better for you and for them.

Rally the Troops: Explain to them why they need to work smarter, harder and faster. Customer service is key. Don’t lose customers because of bad service.

Hire PR/Marketing People: If you aren’t strong in these areas, you have to hire an agency or top people who can help you market more effectively in slow times. Spending a marketing budget and spending it wisely are totally different things. A million dollar marketing budget can be blown stupidly with 10 newspaper ads or used much more effectively in focused media vehicles where your potential customers are actually looking for your products.

Market Analysis: Companies founded by engineers are typically the worst run from a marketing perspective. (Remember — I am an engineer myself so no insult intended — we aren’t sugar coating here). Companies where an engineer runs marketing will likely have trouble selling products in a slowdown (or any other time for that matter). Keep your eyes open for acquisitions or weakness in the markets you serve. Keep your ear to the ground. One of these small companies about to go under may have good ideas for products but just no clue how to sell them. You may determine that developing a competitive product/service to one of these small companies makes sense.

Speed: It is better to be fast than right. After all, you can’t be right every time but if you are fast, you can adjust and become right faster than the other guy.

Optimism: Be optimistic. If you are smart and run things well and your entire team works together to support you, your company can come out of any downturn stronger than it went in. Sure, be cautious — but in the end, business is cyclical. It just is. That is the nature of the beast. Work harder, faster and smarter and you will be rewarded.

Remember, things are still generally good in the communications and technology markets and if you follow these rules you should make it out the other side of any slowdown in better condition than you are in today. IT

» Internet Telephony Magazine Table of Contents