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  • Writer's pictureVigor Media


Updated: Dec 11, 2019

When times get complicated, it helps to go back to the basics. Many companies are exploring how to motivate and engage staff as well as attract customers and maintain their satisfaction with limited resources.  

What can a business do during a slow time that makes work lives meaningful and increases customer satisfaction while not upsetting the budge?

First, there is a strategy and a need for understanding the tactic to obtain market share, especially during downtimes or slow periods of the year(seasonal business markets/recessions).

Market Share of Four Businesses During "Normal Times"

The graph to the left represents four separate companies. In a robust market, the assumption, there are enough customers for all four businesses in the market.  

Businesses that maintained their marketing expenditures in the last recession and/or season achieved an average return on capital employed of 0.6%* 

Here Are the Same Businesses After a Seasonal Downturn

As the market contracts, the pool of customers decreases. Each of the four businesses experienced decreases cash flow.

Businesses that decreased their marketing expenditures in the last recession achieved an average return on capital employed of -.8%*

Effect of Advertising Choices

Business "A" Chooses to aggressively advertise to attract a larger market share. Business "D" chooses to make across-the-board-cuts, including advertising, losing market share. Business "B" & "C" make no changes in their marketing Business "A"'s expanded share provides the cash necessary to return profitability to pre-recession (seasonal) levels.  

Business "B" & "C" continue to struggle but manage to survive. Business "D" continues to lose share and to lose money. 

*According to the 1998 PIMS study, businesses that increased their marketing expenditures in the last recession (season) achieved an average return on capital employed by 43%.

The Seasonal and/or Economic Revival

 When the season returns and/or economy revives, each business retains its market share.

Business "A" emerges from the downturn with a larger market share and in a stronger

financial position.  Businesses "B" & "C" managed to survive, but have lost share to Business "A".  

Business "D" became a "victim" of the recession (seasonal change) and was forced into bankruptcy by a lack of customers.  

What Marketing Strategy is Recommended

 Going back to the basics, focusing on Lifetime Value Management, enhancing core product, and most importantly building customer relationships.  

It is remarkably simple, does not cost much money, and pays off in many ways: especially strengthening relationships. Here are some ideas on how to do just that: