I have spoken throughout this blog about the problems of the goals-driven enterprise, as opposed to the customer-driven enterprise. The goals-driven enterprise has one mandate: to leverage its assets to achieve maximum wealth. The fastest way to do this is to tender shares publicly. This is how the shareholder becomes more important to the enterprise than the customer.

In an economic downturn, in order to maximize shareholder value the enterprise cuts prices to stimulate demand and cuts costs to maintain a margin. Marketing investment becomes highly expendable. What the enterprise is effectively saying is, “My products and my customers are now worth less to me so I am going to invest less in them so that my shareholders don’t complain about achieving a lower rate of return on my customer investment.”

This is perfectly reasonable accounting view of the marketing cycle. The Corporate Treasury says “When I am profitable I don’t mind risking some of that money in marketing as as long as I can see growth. When there is no growth then marketing is futile and it will be erased from the bottom line as long as I can prove in the books of accounts that it does not fuel growth.”

Let’s look at the possible consequences of this strategy:

– When you stop communicating with your customer and lower the price of your product, what does that do to the perceived value of the product, service or business? It creates a ‘new normal’. The value of the relationship with the customer flies out of the window and the product becomes a commodity item, indistinguishable from other low-cost solutions available.

– What happens when the economy comes back? The compelling reason customers bought your product/service in the past has been lost as the relationship linked through COMMUNICATION was severed by the Treasury. You find that your competitors have caught you up, or overtaken, and you realize that your name no longer carries weight. So what do you do? You hire an expensive branding or rebranding consultant and revamp all of your marketing literature and advertising to overcome the inertia caused by the vacuum that you created.

This gamble might pay off. But if it doesn’t the shareholders will excoriate you for failure and try to eject the Board. Or another competitor that did not cut of communication with its customers steamroller you into being bought. If you don’t believe this happens then you aren’t looking.

So how to get out of the vicious cycle? Be a customer-centric enterprise. When there is an economic downturn adapt to your customers new realities without divorcing the relationship and cutting off communication. Work with your marketing partners to find more cost-effective solutions that keep the customer dialog and relationship going. Find ways to add value better than cutting your price.

Those who say it can’t be done do not deserve the title of Marketing. Marketing is the meeting point of customer need and product supply. There is always a way to communicate value that supports this relationship connectivity. You may have to be more creative and give up on some of your personal goals achievement in the short term. But, customer-centric marketing establishes loyalty, frequency and continuity as its scale of success. If you cannot align your business to a customer’s values in an economic downturn then you are a goals-driven enterprise and you will be punished by your shareholders at some point for failing to engage customers over the long haul.

That’s when the vicious cycle comes and bites you where it really hurts – at the peak of your career development.