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EXECUTIVE SUMMARY
The infor­ma­tion man­age­ment indus­try remains resilient in tough eco­nomic times; in mea­sur­ing changes between Q4 2008 and Q1 of 2009 there is a slight down­ward trend in some key indi­ca­tors. In all mea­sures, sur­vey respon­dents remain opti­mistic about sales, show increases in items in stor­age over the pre­vi­ous year, and most did not imple­ment any types of cost sav­ing mea­sures dur­ing the first quar­ter of 2009. In addi­tion, job losses have not affected the indus­try in any sig­nif­i­cant way, but they are increas­ing (albeit slightly). Job growth con­tin­ues to out­pace losses in the first quar­ter of 2009 but the gap is nar­row­ing. Most mem­bers did not require credit in the fourth quar­ter; for those using credit, the mar­ket remains tight. Most mem­bers who sought credit were able to find it. Web based mar­ket­ing jumped ahead of exist­ing cus­tomers to become the most pro­duc­tive chan­nel for mar­ket­ing. Almost all respon­dents con­tinue explor­ing ways to broaden their cus­tomer base and increase their value propo­si­tion to exist­ing clients as a means of respond­ing to the eco­nomic down­turn. Some cap­i­tal improve­ments and invest­ments are being delayed by respon­dents – so rene­go­ti­a­tion of terms with ven­dors is tak­ing place. In Q1 2009, as in the pre­vi­ous quar­ter, the indus­try seems to have weath­ered the finan­cial storm very well and, accord­ing to respon­dents, is posi­tioned for con­tin­ued growth in 2009.

INTRODUCTION
This is the sec­ond in a series of quar­terly busi­ness barom­e­ter stud­ies con­ducted dur­ing this period of gen­eral global eco­nomic down­turn. This sum­mary mea­sures the first quar­ter of 2009. 43 mem­bers out of 440 total com­pany mem­bers responded to the sur­vey (9.7%).

The sur­vey instru­ment was designed to mea­sure real growth or decline, atti­tudes regard­ing growth or decline, pro­duc­tive and non-productive mar­ket­ing strate­gies, grow­ing and declin­ing ser­vice offer­ings, and the avail­abil­ity or restric­tion of credit and financ­ing. Mea­sure­ments were also sought regard­ing new hir­ing or force reduc­tion, response strate­gies to the eco­nomic down­turn, receiv­ables aging and cap­i­tal projects. The results of the sur­vey are out­lined below.

39% OF RESPONDENTS REPORT THAT ITEMS IN STORAGE HAVE INCREASED BY MORE THAN 10 PERCENT COMPARED Q1 2008. In addi­tion, 25 % of respon­dents reported that their inven­tory of items in stor­age increased less than 10% and 28% reported no change. Only 7% of sur­vey respon­dents reported a decline of items in stor­age com­pared to the pre­vi­ous year, and this decline was less than 10%. (Note: Com­pared to Q4 2008, Q1 2009’s rate of growth slowed by more than 10%)

HARD COPY RECORDS STORAGE REMAINS THE FASTEST GROWING SERVICE OFFERING FOR 60% OF RESPONDENTS. Shred­ding ser­vices cap­tured sec­ond place among respon­dents with 28%. Scan­ning was a close third with 21%. Tape stor­age and dig­i­tal records stor­age indi­cated the low­est rates of growth among respondents.

INDUSTRY CONTINUES TO REPORT MORE NEW HIRES THAN LAYOFFS – 60% OF EMPLOYERS REPORT THAT EMPLOYEE HEAD COUNT IS UNCHANGED. 11% of employ­ees have low­ered their total num­ber of employ­ees by less than 10% and 2% of respon­dents have low­ered their head­count by more than 10%. 14% of respon­dents have increased their num­ber of employ­ees by less than 10%. 11% of employ­ers have increased employ­ees by more than 10%. (Note: Com­pared to Q4 2008, employee head count is grow­ing at an almost flat pace.)

SEARCH ENGINE AND WEBSITE LEADS SURPASS EXISTING CLIENTS IN MARKETING RESULTS. 51% of respon­dents reported web­site and search engines gen­er­ated the major­ity of their mar­ket­ing results. Exist­ing clients fell to 36%.Yellow pages and direct mail mar­ket­ing scored poorly on the sur­vey. Face to face mar­ket­ing is still a main­stay of the indus­try with net­work­ing scor­ing 27% and cold call­ing scor­ing 18% as the most pro­duc­tive mar­ket­ing strat­egy for respondents.

HALF OF RESPONDENTS DID NOT IMPLEMENT ANY TYPE OF COST SAVING MEASURES IN THE FIRST QUARTER OF 2009. 32% of respon­dents reported delay­ing cap­i­tal improve­ments. 19% of respon­dents reported reduc­ing employee hours. In addi­tion to cat­e­gories mea­sured sev­eral respon­dents indi­cated that they had “reviewed and altered ven­dor or sup­plier agree­ments.” Oth­ers reported they had “elim­i­nated over­time,” “ini­ti­ated more expense mon­i­tor­ing or strict con­trol of expenses,” and acted to “reduce oper­at­ing costs.”

75% of respon­dents reported future plans to lower expenses and 12% of respon­dents plan to post­pone invest­ments to deal with the cur­rent down­turn. 87% of respon­dents plan to search for new clients and 65% plan to increase value of ser­vices to retain clients as a response to cur­rent eco­nomic con­di­tions. Other strate­gies respon­dents vol­un­teered included “adding branches to help with regional deals,” “tele­mar­ket­ing,” “adding and retrain­ing sales staff,” “major over­haul on web­site includ­ing e-mail offers.”

38% OF RESPONDENTS DID NOT REQUIRE CREDIT IN Q1 2009. An addi­tional 31% did not notice a dif­fer­ence in avail­able credit. Among the remain­der of respon­dents, 14% found avail­able credit with greater restric­tions (or scrutiny), 7% found credit with greater restric­tions and a higher inter­est rate and 7% of respon­dents did not find a source of credit.

60% OF RESPONDENTS SAW NO DECLINE OF CASH FLOW DUE TO RECEIVABLES AGING. One third of respon­dents responded by increas­ing col­lec­tions calls. Only 10% responded by restrict­ing ser­vices until over­due accounts were paid. 2% responded by ini­ti­at­ing legal action to col­lect. .One respon­dent reported “respond­ing to customer’s requests for addi­tional time to main­tain cash balances.”

RECORDS ABANDONMENT IS ON THE RISE. 53% noticed no change in the num­ber of clients aban­don­ing records (down from 80% in Q4); 28% saw a mod­er­ate increase and 14% noticed a sig­nif­i­cant increase. Respon­dents reported “shred­ding is 25% higher,” “more [aban­don­ment] in first quar­ter than in last 10 years,” and “sev­eral clients [have aban­doned] but not with many boxes.”

THE FUTURE LOOKS BRIGHT! 53% of respon­dents are mod­er­ately opti­mistic about the next 12 months. 16% are very opti­mistic. 16% are neu­tral. Only 9% of respon­dents are mod­er­ately pes­simistic about the next 12 months – 5% of respon­dents were very pes­simistic. 63% of respon­dents are expect­ing a mod­er­ate increase in sales; 14% of respon­dents are expect­ing a sharp increase in sales. Only 4% of respon­dents antic­i­pate a decline in sales in the next six months. (Note: This num­ber is trend­ing upward toward mod­er­ate growth from Q4 2008.)

IN 2009 MORE THAN HALF OF RESPONDENTS (51%) EXPECT THEIR COMPANY’S REVENUE TO GROW BY MORE THAN 10%. An addi­tional 32% expect their rev­enue to grow by less than 10%. Nine per­cent of respon­dents are antic­i­pat­ing no growth or decline and 5% antic­i­pate a decline of less than 10 % in rev­enues – 2% antic­i­pate a decline of more than 10% in rev­enue.
For more Infor­ma­tion con­tact PRISM Inter­na­tional (jim@prismintl.org)