How to Maintain Sales Revenue in the Great Recession - Effective Marketing Strategies (Part 2 of 3)

In part 1 we identified the key to maintaining your sales revenue and profitability during the economic downturn is understanding what your patrons are currently thinking, how their thinking changes their buying behavior, and then adjusting your marketing strategy accordingly to meet their new needs.

(A brief pause for a definition refresher: Marketing is everything you do to tell your target market how you can help them and how to contact you to get that help. We now return you to your regularly scheduled article.)

Now that you understand your patrons' current outlook, what should your marketing strategy response be?

Recession Busting Business Strategies

Generally speaking, it's best to focus on doing a few things very well, rather than many things poorly. When you expand or broaden your offerings, make sure that you offer everything associated with your new product in one stop under your roof. Dump fringe products that are slow sellers or can't be marked up to pay their way. Keep this principle in mind as you take the next steps.

First, maintain your pricing margins - don't engage in across-the-board discounting, which will result in your sales floor being festooned with "Sale" tags and could be perceived as the desperation strategy of a failing business. You certainly don't want to give that impression! Plus, marketing strategies based on widespread discounting are addictive to the customer and ruinous to the business. Don't go there if you can possibly avoid it. Then...

Get Creative

Create scarcity - stock and display only a small number of a particular size, color, or type of item, which encourages the customer to buy now to avoid it being out of stock when they return later. You've probably seen that some department stores have brought back layaway plans to encourage this behavior, a service that was discontinued a few years ago when customers could just charge the item to their credit cards.

Focus on quality - customers are carefully scrutinizing every purchase and want whatever they buy to last a long time. In most cases, luxury items are out, but consumers are still willing to shell out for durable, well designed and built stuff with fewer bells and whistles. As an example, well made tools are in, gadgets are out. Well-made basic handbags are in, high-end single purpose purses are out.

Focus on timeless stuff, not trendy stuff - again, in this economic environment consumers want what they buy to meet many needs, so timeless items are on their radar screen. Clothing in basic colors or styles that can be accessorized easily for a fresh look is the way to go; outfits that can't be mixed and matched are out. Khaki, denim, basic black in items such as shoes, and neutral colors will be on their mind. Remember, flip is out and practical is in.

In part 3 I'll expand this list of recession busting business strategies that will help you maintain, and even grow, your sales in the Great Recession.

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Medicare Part D - Life Changes and Marketing Changes

When the Medicare Part D program took effect in January 2006, it was with the best of intentions. Over two years later, the main question would be, has the Medicare Part D made substantial changes to the lives of seniors?

If we go by current statistics, it can be said that Medicare Part D has made some improvements in the lives of seniors, but there have been no revolutionary changes thus far. Over 50% of Medicare beneficiaries are enrolled in Medicare Part D. And since the program began, the number of Medicare beneficiaries who do not have drug coverage decreased, from 38% to 10%.

However, even with Medicare Part D coverage, there are still seniors who are skipping on medicines because of their high costs. In 2006, after the Medicare Part D program was set up, 11.5% of Medicare beneficiaries still skipped medicines because of the high cost. But this was a minimal decrease from 2005, when 14.1% of Medicare beneficiaries skipped on medicines. In 2006, 7.6% of Medicare beneficiaries scrimped on their basic needs so they could buy medicines. This is a slight decrease in 2005, when 11.1% of seniors also scrimped on basic necessities to pay for medicine. The sickest Medicare recipients skipped pills but did not forego their basic needs. Their numbers were the same prior to and after the enactment of Medicare Part D.

Studies also show that many Medicare beneficiaries do not understand the Medicare Part D program.

CMS Guidelines On Marketing

On May 8, the Centers for Medicare & Medicaid Services (CMS) proposed a new rule requiring Medicare Part D plan providers to intensify their marketing efforts on their Part D plans: stand-alone Prescription Drug Plans (PDPs) and Medicare Advantage (MA) plans. The proposed new ruling also targets the tightening of MA Special Needs Plans (SNPs). Hopefully, this new rule takes effect in time for the marketing period of Medicare Part D 2009

With the new ruling, the CMS would be more flexible at determining the penalties against prescription drug plans that violate Medicare rules, which adversely affect Medicare beneficiaries. The new rule gives the CMS the author to impose a penalty of $25,000 for every enrollee who is adversely affected by the violation.

The proposed new rule also set a limit to the sales and marketing activities of plan providers, including:

* Prohibition of cold calls and expanding the existing prohibition on door-to-door marketing. Part D plan providers would have to set an appointment with Medicare beneficiaries in advance.

* Prohibition of cross-selling products unrelated to healthcare to a Part D enrollee.

* Prohibition of active sales activities at information fairs, community meetings and waiting rooms of health clinics.

* Medicare Advantage organizations using independent agents for their marketing must employ only state-licensed agents.

* Medicare Advantage organizations should set up level commission structures for their brokers and sales agents across all Medicare advantage products.

* Medicare Advantage organizations need to make sure that 90% of all new SNPs enrollees must be individuals with special needs. The proposed new rule of CMS will also outline the standards for delivery of services.