Learning From the Past

 

 

Learning From The Past

Today, (December 2008) there is little doubt that we are in a recessionary period.  Some observers are suggesting that this recession will be second only to the Great Depression in severity and economic impact.

Everyone in America felt the Great Depression.  At its depths, over 25% of the labor force was unemployed, resulting in lost homes, widespread hunger, significant government intervention and social change.  Many companies failed.  However, some companies were able to carry on and, as a result, prospered when the economy turned around.  What strategies did these companies employ and are they applicable in today’s climate?

Reviewing the literature relating to this question suggests that customer-focusing companies survived and prospered.  As one observer noted,

“Consumers didn’t stop spending during the Depression, most just looked for better deals, and the companies producing those better deals came out stronger after the Depression ended.”

He goes on to say:

“Both anecdotal and empirical evidence support the case that advertising was the main factor in the growth or downfall of companies during the Great Depression.”

Other writers have come to the same conclusion, i.e., that those companies who ignored their customers, or became invisible to their customers, and who did not offer a perceived value-add, failed. 

Three strategies for today, drawn from the Great Depression, are:

1.      Focus on existing and potential customers

2.      Provide perceived, differentiated value

3.      Keep your name in front of customers….don’t allow them to forget you

A classic Business-to-Business ad for McGraw-Hill publications, written by David Ogilvy, poses the following:

“I don’t know who you are

I don’t know your company

I don’t know your company’s product

I don’t know what your company stands for

I don’t know your company’s customers

I don’t know your company’s record

I don’t know your company’s reputation

Now – what was it you wanted to sell to me?”

 

This ad is as relevant now as it was then.  It touches on the need to maintain customer contact and the need to use customers to spread the word about your products or services, a theme that is especially true in today’s recessionary environment.

Companies who forget to position themselves in the market, or who lose touch with their customer base, risk being forgotten.

 


“How Brands Thrive During the Great Depression”  Dave Chase, October 17, 2008,  http://www.imediaconnection.com/content/20821.asp

 

 

 

 

See also “Business Lessons from The Great Depression,, October 8, 2008,  Stacy Perman, Business Week,  http://images.businessweek.com/ss/08/10/1017_depression_lessons/index.htm

Google Answers,  Re: Successful companies and industries during the Great Depression

http://answers.google.com/answers/threadview?id=178334, especially the answer from digsalot-ga

Wiki Answers: What Business thrived during the Great Depression  http://wiki.answers.com/Q/What_businesses_thrived_during_the_Great_Depression

 

 

RHM – 3/31/09

 

 

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