Drop in Confidence for U.S. Executives

According to a McKinsey survey, American business executives are much less confident about the national economy than they were six months ago. To boot, their confidence is the lowest that it has been during the past 18 months.

Knowing this, how might you shape or rethink your marketing plan? How might this affect your business development efforts? Your customers may be thinking that they will have to tighten the purse strings.

First of all, understand that this survey is only one data point--alone, it is not compelling. Also take into consideration that this survey was adminstered on the heels of a major disaster, Hurricane Katrina. Those considerations in mind, however, do not be surprised to encounter the following in the near future:

1- Expect longer sales cycles (i.e., takes you longer to close deals)
2- Be ready for flat or reduced budgets for contracts, services and consulting fees
3- Look for existing clients electing to rebid contracts (which spells opportunity if you're not getting the buiness, tough news if you are)
4- Be ready for previously planned projects to become postponed or tabled
5- Increased focus on productivity and ROI should be well received.
6- Marketing messages focused on the "saving you money ~ making you wealthy" benefits should play well with clients.
7- Decision makers may have an initial inclination to slash advertising and marketing expenditures, so it might take more justification and extra measures of service and support to preserve such items (again, think about ROI and sales productivity).

According to the McKinsey Quarterly newsletter article:

US-based executives have generally been among the more optimistic in our surveys. When asked in March of 2005 how they felt about the [U.S.] economy 6 months hence, a majority (an index of 59) were very confident. For this survey, when asked about current conditions versus those six months ago, this same group registered a confidence level of 44, the lowest since we began measuring it 18 months ago and the lowest of any group of executives in the world. US executives, however, are much more upbeat about their own industries; their confidence fell, but remains only somewhat lower than it was six months ago.

Source: McKinsey & Co., Survey of Global Business Executives, Sept. 2005.