Unless you have been hiding in a cave somewhere, you have heard that the US economy is doing poorly. Housing starts are down, the value of the dollar is down, car sales are down, real estate is down, retail is down, gas prices are up, food prices are up, bankruptcies are up and the sky is falling. What is a person to do?
1 - Don’t Drink the Cool Aid
The news is sensationalized and fear sells. Things are rarely as good as they seem and things are rarely as bad as they seem. If you allow yourself to give in to the news you will determine your destiny. When people tell me about the bad economy I tell them I have chosen not to participate.
2 - You can’t cut your way to a profit
Expense management is done at all times not just in bad markets. Cutting expenses in bad times is a misnomer. You set your good and bad habits in good markets not bad. Be selectively extravagant and prudently frugal. I have never seen a business survive and thrive a down market by trying to cut expenses as their long term strategy.
3 - Don’t cut your life line
Some of the easiest variable expenses to cut out are advertising and marketing. That also takes a bad situation and makes it worse. When your business drops and you take action to stop the flow even more, you are doomed. Be smarter with your marketing and adopt direct response methods that can be tracked and measured but don’t cut marketing because it’s the easiest cut.
4 - Dance with who bought you
The past and present customers are the life blood of any business. These customers are also the most over looked and underutilized asset in ALL businesses. Everyone gives lip service to their glorious love of their customers but what are you really doing to create and nurture the relationship. Do you have a relationship building program that creates over fifty positive customer contacts per year? You can have all the BDC’s and CRM’s you want and that does not mean you are creating personalized based marketing that creates relationships. The people who have done business with you already like and trust you and will most likely do business again and bring others if they are appreciated, rewarded and yes asked. NOBODY does a good enough job with their customers. There is gold in them thar hills.
5 - Make the bad news good
Use all the bad news and the fear and negative emotions associated with it to your advantage. Use the headlines in your marketing and advertising and become the solution provider, I.E 7 Tips for Winning in a bad economy.
6 - Stop Boring Me to Death
If I get another one size fits all, looks the same mailer for an event sale I think I will puke. Be creative and use trash can mailers, wallet mailers and other dimensional mail. Stop trying to get the lowest cost per piece and concentrate on the highest ROI for your mailings and other marketing. Boring does not sell in any media format.
7 - Go back to the basics
Everything is basics. Instead of cutting your education, double your education efforts. If the market is really that bad then you should have tons of time to educate yourself and your team. If your opportunities are fewer then you must maximize each customer contact. TLC - Think like a customer. Examine your process from a customer’s point of view and ask yourself what creates heartburn for those customers.
8 - Super-size it
You can impact your bottom line immediately by increasing either transaction size or the gross margin. In my entire career I have never found a business that cannot increase their transaction size and margins. Stop accepting fate as a commodity and differentiate yourself, your product and business and ask for more money. You can do this through add-ons, bundling, value-added presentations and better process for asking for and negotiating money. Do want fries with that and do you want the large popcorn for 25 cents more are not accidental questions.
9 - Create Multiple Enticing Campaigns
If your customers buy one product or service from you then they will buy more. The average automobile dealership only retains 19% of their customers from sales to service. That number is business suicide. Sending a one time mailing for a discount oil change does not constitute a continuity program. With a continuity program any business can mover from that 19% figure to 50% and more. When you create a continuity program you will insulate your business from bad economies in the future because you will be less dependent on conquest customers.
10 - Speed of the Boss, Speed of the Crew
As the leader thinks and acts, the team shall too. If the leaders of your business talk bad economies and bad markets the team will believe it. What are your leaders doing right now? Don’t major in the minor. Spend every minute of the day in the pursuit of things that will create customers and incomes now and in the future. Just last week I had a dealer tell me that he was waiting for this bad market to turn around before he did anything with this business. My reply was, “how is that working for you?” If the leader does not believe, don’t expect the troops to.
by Mark Tewart