Economic slow-downs usually mean we must work harder and smarter to stay busy. If we’re not busy, we need to be busy getting busy and generating revenue now.
1. Get Ahead of the Trends or Just Keep Up. Do you have the kind of business that could “ride the wave” of a trend? Or, can you make a few changes and jump into the water? Notice that we didn’t say “new” trend. Trends that have been around for a while can be just as profitable. There are still plenty of opportunities, for example, in the aging Baby Boomer market.
Our clients with products and services that contribute to sustaining the environment (the “green” trend) are experiencing record sales. But they didn’t get there overnight. Two of them began taking their businesses down this path five years ago. How do you find a trend that’s right for you? We have recently learned of a firm that helps companies sort out emerging trends to determine which will play a part in their future. That firm’s processes also enable a company to plan its actions to align with that trend.
2. Introduce New Products or Services. This tactic gives sales people a good reason to talk both to existing customers and prospective ones. Plus, introducing something new is exciting, and salespeople do better when they are genuinely excited. General Electric discovered a competitive edge years ago when management began requiring that 25 percent of revenue come from products new to GE in the previous five years. Today the goal is 30 percent. Even small firms that might not have the resources to be that aggressive can put forth their best efforts to develop one new product or service each year. If your customers are still with you but buying less, a new product or service might just fill the gap.
3. Add People, the Right People. Does this suggestion go against your gut? Well, it probably is a contrarian concept. But adding people during rough times can pay big dividends. Think about it: Some terrific people are looking for work right now. Many have relationships and networks that could mean big sales, if they’re working for you. This approach can work especially well if you are thinking about expanding your geographic scope. Currently we are searching for consultants to add in a few select cities. If we find the right people, our sales should grow above trend during 2009.
4. Think Twice about Your Pricing. We do not recommend lowering your prices, even if your competition is. Remember, except in a strictly commodity transaction, customers buy because of the total value received over the life of the product or service experience, not because of the lowest price.
But you might think about raising them. Yes, that’s right, another gut-wrenching concept. Sometimes taking the road less traveled is the best course. (See “Christopher Columbus,” “Thomas Edison,” “Bill Gates.”) There’s one very good reason a price increase can make sense in tough times. And it’s one you’ve heard from us before.
Your competitors are probably following the traditional, defensive tack of lying low, trying to save money and not antagonize their customers. That can open up the field for you to build market share more aggressively by investing in marketing and selling. Keep in mind that if your costs are going up you might have to increase prices anyway. Either way you have an opportunity to remind your customers of the value you deliver.
Finally, here’s a warning business owners sometimes fail to heed: Prices must be increased to cover the cost increases you have absorbed in the past year. Without this pass-through your margins will erode, and you won’t be in a position even to consider stepping up your marketing and selling activities.
5. Keep a Positive Attitude. When the newspapers were reporting that we were in a recession all through the first three quarters of 2008 we quite simply were not, at least by the traditional measure. We had not met the criterion of two successive quarters of “negative growth.” (The rate of growth was decreasing, however.) Plus, unemployment was at a 20-year average level, interest rates were low, and productivity solid. Even now, there is good news in the marketplace. Smart business people will find ways to identify and connect to the realities behind that good news. When they do, they’ll find new opportunities for themselves.
So, be confident that you can find opportunities for yourself and for your company no matter the economic weather. And when you succeed in these challenging times, please let us know how you did it. We’ll share as many success stories as we can in future editions of our newsletter.