Though it wasn’t dominating the news as it is today, Dick Buell could see signs starting in the fourth quarter of 2007 that the economy would be taking a turn for the worse. Crude oil prices sharply increased and Buell knew that fact, coupled with other negative turns in his industry, would greatly influence consumer spending, which, in turn, would hurt the company’s clients.
“We concluded that we needed to prepare for a downturn even though our company had not yet seen that downturn,” says Buell, chairman and CEO of Catalina Marketing Corp., which posted more than $500 million in 2008 revenue. “My philosophy is customers dictate what your business is going to be like. If the people I sell products to, which are the consumer packaged goods industry and the pharmaceutical companies, who ultimately, in turn, sell to consumers — those both are people that can impact my business.
“If their businesses are doing well, my company will do well. If their businesses are not doing well, my company will not do well.”
Buell was also not naive enough to think that his clients would continue to spend money on marketing, which is often considered discretionary spending, if they were being hurt by the economy.
“As business managers, the economic facts in front of us, the industry trends, the customers’ actual performance and consumers, sort of dictated by retail spending and layoff factors, told us that there is a consistent message here that our business environment is not good, and it’s going to get worse in 2009,” he says.
So, in December 2008, the company’s top 75 executives gathered at the Hilton Hotel in St. Petersburg, Fla., to devise a plan to stay afloat in the rough waters Catalina could have to face in the future.
Here are a couple of ideas from Catalina’s plan on how to survive in this economy.
