In my last blog I took a look at the dismal situation with regards to short term investments. Unfortunately I have to give you some hard cruel facts before I give you some good news….
Now for the cruel hard facts:
The market has shrunk for almost every business. For most niches in the marketplace, sales and revenue generated today cannot support the same number of businesses that could be supported a few short years ago. The cruel reality is that not every business is going to make it through this recession. So the question becomes who is going to fail – you or your competition? The companies that make the right moves will survive and, as the economy turns back upward, will thrive. Many of the companies that make the wrong moves will fold. I wish it were different but these are the hard cruel facts.
So what are the right moves? Again these are common sense ideas. And I am going to ask that you suggest what is working for you too.
- Cut the fat. But do not let the “bean counter” cut the quality of your products and services to the point where you do not deliver more value than your competition.
- Invest in technology that will make your company more competitive. Are there ways to automate? Can you outsource some things? Are there suppliers you can use that utilize high tech processes that deliver products more cost effectively or have a benefit that gives you a unique advantage?
- Invest in increasing cost effective marketing and advertising to expand your market share. Often in a recession it costs more to acquire new clients. The pie has shrunk. Don’t “save” yourself into bankruptcy. Make sure that if a business has to close it’s your competition and not you. Expand your market share and you will reap large dividends when the market expands.
- Invest in your relationship with your current customers. Did you know it is 3-4 times easier to sell an existing customer over developing a new one? Communicate with your customers, understand them and give them helpful information. Do you have a newsletter? Do you send them personalized cards? Do you have an e-mail system to communicate with them? Did you know that there are ways to automate your e-mail communications? Do you offer special workshop or events for clients? Do you offer a special unadvertised sale just for existing customers? Oh by the way, when your focus is developing and enhancing, your relationships do not subscribe to the ABC’s of selling (Always Be Closing). If you sell hard, here people will stop reading (never forget that a prospect’s attention is the most valuable thing in marketing today. You’ve got your customer base – now be smart enough to keep it). A good rule of thumb is making sure the information you deliver is helpful and wanted. Make sure the information enhances your relationship and does not detract or hurt it. Then when you do sell them, treat them like gold – because they are! When you have exceeded their expectation and “wowed” them ask them for referrals – over time you will get them.
- Analyze your product to see which ones are most salable in a recession. Which ones are people happy to give you their hard earned money for? IE: In this market selling recreational vehicles is much tougher that it was 5 years ago. The market crashed and gas prices are up…. some people are still buying RV’s, just not nearly as many…. On the other hand smart phones sales are up. People can conduct business from anywhere and access the internet. Psychologically, they really may want to have the latest toys but they can rationalize that it makes them more productive (which it can) and sales are skyrocketing…. The moral of the story – focus on the products people will buy in this market.
- Do you have a product or service with little or no competition? If you do, and it is salable, this is a great place to focus some resources. Years ago I had a DJ business on the side. Mobile DJ’s were new (yes we did use dinosaur teeth as a stylusJ)… The yellow pages had just created the heading of Disc Jockeys – you previously had to look under Entertainers. I chose the new heading – I wanted people who knew that they wanted a DJ and not a band. Only one other person did this. I almost doubled my business with a very small ad….
- Is there a competitor or another business that you can partner with and have them send you leads for products or services that they do not provide but that can help their clients? Offer them and finder’s fee or commission (if it is legal in your profession) – it is often much less expensive than the cost of finding these prospects on your own.
- Understand and be able to communicate your unique value proposition. Many marketers talk about your unique sale proposition or USP. I have always believed it is all about value. When the customer understands how and why you deliver more value to them (and they want or need what you offer) the sale becomes very easy. Who doesn’t want more value?
- Learn how to employ effective marketing and advertising techniques in the new economy and with new media. Optimize your website, utilize cost effective “pay per click” campaigns, cost-effectively employ social media and create videos for your website and social media. However – let the market tell you which traditional media and which new media gives you the best return on your investment (ROI). A few weeks ago, I was in a meeting of local business people. A person held up a magazine type of media and said that traditional media are dead and that everyone uses the internet and social media. New media may be growing but the person was holding a publication with hundreds of advertisers in it…. Would all of them go in it time and time again without getting a return on their investment? My rule of thumb for all small businesses is follow the profits. I don’t care if you are on Facebook, the Internet, the Yellow Pages, the Pennysaver, a magazine, a Super Bowl ad or on the back of a used napkin. If the media cost-effectively delivers prospects from your Sweet Spot (most profitable customers), then use it! Don’t be married to any one media. Don’t jump on a media because it is sexy and has a lot of status. Don’t avoid media that people say are “old fashioned” and boring. Be married to results measured by ROI. Track and analyze which media deliver your best niches most cost-effectively with the highest ROI and follow the profits!
- When reviewing media, check out how many of your competitors use it and for how long they have. Then, if you can, check out if they are buying more or less of it. If the media had a lot of advertisers and their spend keeps trending up – it is a media that most likely works for your type of business.
- Get interns. College students know that having job experience will put them in a better light upon graduation than applicants with no experience. If you offer an internship, even if it is unpaid, they will get much need job experience and you can get more done without a large investment.
What are your ideas on the best investments a business can make in these tough times? I could add more but I want to open it up and hear what is working for you.
If you have an investment that is helping your business grow – please share it. I bet we can get this list to be a growing and living document that helps all to grow and thrive in these difficult times.
You might want to check out my website for some information on Guerrilla Marketing and other cost effective advertising and marketing ideas…
Here’s to a profitable future!