Last year, the bearish stock market, lower consumer spending, mounting layoffs, and the aftermath of September 11 forced many companies on the Hispanic Business 500® to reassess their sales and marketing strategies.
Some companies maintained or increased budgets to gain market share. But others cut spending, laid off employees, and pushed remaining staffers to work harder.
Sales and marketing are often among the first casualties of a tough economy because they are areas in which it is tough to measure return on investment, experts say. Even branding campaigns, whose value is hard to quantify in the short run, are not immune to cost cutting. But strategists advise slashing marketing and advertising budgets only as a last resort.
It’s important to develop long-term relationships with customers, says Bennie Romero, CEO of Standard Glass & Mirror (number 202 on this year’s Hispanic Business 500), a Houston installation firm. Last year, he benefited from longtime associations with several general contractors.
“They know our reputation for quality and finishing jobs on time [even if] we weren’t always the lowest bidder,” says Mr. Romero. As a result, company revenues rose 337 percent in 2001.
A series of strategy shifts may be necessary for a company to survive an economic downturn. San Antonio–based Alamo Travel Group (number 158), which derives most of its revenue from government and defense agencies, lost up to 75 percent of its bookings immediately following September 11. The company quickly laid off 7 of 35 salespeople, increased bonuses and incentives, and stepped up marketing efforts.
Alamo CEO Patricia Pliego Stout pushed her sales staff to book more corporate incentive trips and business meetings. She also attended workshops sponsored by the defense and transportation departments, the SBA, and minority and women’s groups.
Ms. Stout told her sales staff, “We have to work harder for the same money to keep the company alive. We have to help each other.” Meanwhile, she increased Christmas bonuses, awarded free trips to top performers, and raised Alamo’s matching 401(k) contributions.
The strategy worked. Alamo landed a few new Fortune 500 clients and nearly doubled the number of defense installations that book with the company. Sales will grow from $25 million in 2001 to about $40 million in 2002, says Ms. Stout, and she has increased her staff to more than 50 employees.
Spectrum Communications Cabling (number 125) took a different route to reorganizing its sales efforts last year. Spectrum, based in Corona, California, is a provider of voice and data cabling services, with about 65 percent of its revenues coming from public school systems. In an effort to land more contracts from the federal government and private industry, Spectrum nearly doubled its sales staff to 13 people. Most of the new hires took over existing accounts of longer-term sales staffers, who received a portion of the proceeds from their former accounts while pursuing additional business.
Even during the recession, Spectrum didn’t skimp on rewards. Last year, the company rented a racing track and allowed customers and top salespeople to zoom around the speedway in stock cars.
“We wanted to maintain service for current customers and diversify into other markets, while rewarding our best people,” says Spectrum CEO Robert Rivera, who was Hispanic Business magazine’s 2000 Entrepreneur of the Year.
Most Popular Stories
- New Hershey's Logo Revealed
- Americans Still Pessimistic Despite Economic Growth
- Obama's Delay on Immigration Creates Uncertainty
- Startups Offer Smartphone Banking Apps
- Illinois Issues Fracking Rules
- Mexico's Pemex Forecasts 6.7% Drop in 2014 Crude Production
- 'Longmire' Cancelled, Looks for New Network
- Hip-Hop Takes Up Ferguson Cause
- Clippers Deal Started With 2 Numbers
- Echeveste Steps Down, Perez Steps Up at VPE