To be ready for the rebound companies need to target three key elements: the who, the when, and the how. The economic downturn has many small business marketers stampeding the exits, slashing budgets and cutting prices.

Though understandable, and rational, this full-on retreat is in most cases occurring too late.

Planning for a storm is far more effective than looking for an umbrella when you’re already wet.

The point is not that too little planning was done in the run-up to the recession, which hit everyone harder than expected. The point is to avoid the same mistake in reverse.

It’s time to start planning now for the end of the recession.

“But we’re just getting used to the new normal,” many business owners may say. Exactly.

Because so many entrepreneurs and SMBs will be focused on manoeuvring through 2009, this is an excellent time to craft a 12-to 24-month get-out-front-of-competitors marketing strategy.

There are many components to any marketing strategy.

For a post-recession marketing plan, three pieces really matter: who, when, and how.

Understanding customers (the who) and the changes in their behaviour is the first step.

This assessment will tell you how to position your products or services, but not the timing (the when) of your market bounce back.

So sorting out where you sit in the economic pecking order comes next.

Finally, getting products and services to market may change. So projecting channel dynamics (the how of retail, distribution, Web and so on) a year or two from now is also a key elements of the overall strategy.

Understand changes in customer behaviour
Solid marketing strategies start with answers to customer needs and wants, that is, customer behaviour rather than demographics (“I’m just tired and frustrated, and I’m making a decision not easily predicted by my age, sex and income”).

To plan for a rebound, small business marketers have to understand which behaviours have changed, and why.

Getting a handle on the motivations behind the changes allows for creative responses, now and later.

More importantly, marketers have to assess which changes are likely temporary, versus those which are liable to be more permanent.

The clues needed to make this call tend tobe grouped into selection and habit buckets.

A behavioural change tied to selection, such as opting for a less-expensive hotel, is probably temporary. A habit change, such as buying groceries rather than dining out four nights a week, is more likely to be lasting. If such changes were true, boutique hoteliers could plan to weather the storm and grocers could beef up (pun definitely intended) for a strong market, post-recession.

It’s no good to simply look at generic consumer or business-to-business purchase data. Customer behaviour needs to put under the microscope in the context of the company and industry in question. But owners have to intimately know their own customers, and what has changed, inside out. There are many ways to get these insights, but they all start with conversations.

Savvy marketers are constantly engaging customers in discussions about products and services, and about themselves: their pain points and what would make them happy. Some walk the aisles and talk to customers at random.

Others build panels of folks they re-engage often. Many rely on traditional market research. The tools matter less than getting on with it.

Understand the pecking order
Planning to meet customers on their terms is one thing. Timing it correctly is another altogether. The world economy will not bounce back all at once, everywhere.

Trying to predict the timing of the return of consumer confidence is a bit like filling out your Final Four pool sheet: if you have been paying attention and do some research you’ll do okay, but you’ll never nail it exactly. Some economists predict late 2009, others 2011 or beyond.

The reality is probably somewhere in between. So, more effective is to sort out which geographies and market spaces are likely to come back, and in what order. It’s debatable whether regions hit first will also bounce back first, or will suffer for longer based on shoddier economic fundamentals to begin with.

Let’s leave that debate to others and focus on products and services.

In recessions, goods and services are inclined to follow a model like accounting’s LIFO (last-in, first-out). The last things a customer lets go of are the first he or she spends money on again when the economy turns around.

It’s straightforward. I call this, ELISE:

The first things customers stop spending money on in down periods are true Extravagances, from vacation homes to expensive art.

The next to disappear are Luxuries such as sports cars and designer bags.

Then go Indulgences such as $5 coffee and nights out at bars and restaurants.

These are followed by Services: house cleaning, mobile-phone plans.

The last casualties are Essentials, such as gasoline and mortgage payments.

Determining where their offerings register on the ELISE scale is key for SMBs trying to time market comebacks. Underwear and socks will sell again sooner than titanium and casino hotel rooms. But often it will not be cut and dried.

Seeking out external, maybe unconventional, perspectives on order and timing is crucial. Business owners should be having conversations with professionals they have never talked to before – economists, analysts at banks and rating agencies, government policy makers, and social workers, to name a few.

No one person will be right, but a collective point of view will really help.

Understand changing channel dynamics
U.S. businesses that were counting on Circuit City to deliver a big chunk of their 2009 numbers must be scratching their heads (or scratching out their eyes) right now.

For a product company, channel partners – such as retailers and wholesalers – are the sometimes forgotten or ignored, but often most important customer. Services are not immune here either, because many rely on partners.

Planning for a rebound means making a determination of what the channel landscape will look like in a year or two.

Some retail banners (clothing) will go under, as will some value-added resellers (computer equipment). And some websites will shut down (consumer electronics e-stores, for example). It’s inevitable. Surprise doesn’t have to be.

Companies need to be right on top of channel partners, working with them to eliminate inefficiencies. This closer relationship will also double as a way to help figure out whether the retailer/reseller is strong or weak, in no danger, or likely going away.

A question every small business owner is asking now is: “Should we plan to hire a sales force and go direct-to-market when this is all over?” The answer will depend on individual circumstances.

A direct model offers many benefits, such as control over brand representation and relationships formed with end-users, but it’s not a slam dunk. It can be costly and logistically challenging, and channel partners often help in small ways entrepreneurs never hear about (clearing goods through customs, for example).

But if there is doubt about the viability of the channel partner post-recession, making alternate plans now is a smart move.

Speaking regularly with distributors and retailers (or even forming a channel partner council with set meetings) and interviewing industry association representatives is a good way to stay on top of the health of the folks you count on to put your goods on store shelves, or to sell your services.

The recession is here. It will end. Start preparing now to take full advantage when it does.

Article by Mark Healy on TheGlobeAndMail.com