Beating A Recession – 3 April 3, 2008Posted by David Dirks in Uncategorized.
Tags: beating a recession, recession, recession strategies, recession tactics
One of the most common things you’ll hear business people say during a recession is that business is bad because customers are ‘cutting back’ or ‘tightening their belts’. I recently heard one business owner complain that people weren’t buying their higher margin goods because they were opting for the lesser-priced items. Or you’ll hear that business is off because of gas prices and customers not wanting to drive to their store. All true and a reality of the economy we’re now settling into.
In my book, there are only two ways to beat a recession: 1) go on the offensive and 2) control what you can control and don’t worry about those things that you can’t control. You can’t cut gas prices, can you? You can’t make the economy grow over night, right?
Here are a few ways you can go on the offensive:
• Get and stay close to your customers. From a marketing and sales perspective, this is a huge, almost untapped business opportunity. Building a loyal following of customers that will buy from you through all seasons starts with knowing who they are. It also means knowing how to contact them. There are plenty of software programs on the market that allow you to input basic customer data. Not computer literate? No problem. Get yourself some 3 x 5 cards and capture your customer’s information the old fashioned way. It still works.
I can think of countless businesses that I’ve patronized over my lifetime in the Hudson Valley and elsewhere that barely bothered to ask me my name. Think about it. How many businesses do you buy from that never send you a simple newsletter, note, or card to inform you of some event at the store or a new service? Only the top performers who do well in any economy.
Every customer that walks through your door or calls you is a 3 x 5 card opportunity. Stay in touch with your customers and get to know them.
• Change your product & pricing strategy. Don’t complain about customers not buying your higher margin products during a recession. The answer to that is to create more ‘recession priced’ goods and services to offer your budget conscious customers. For example, a florist could find and create event packages that are both attractive but sensibly priced. Are your margins going to shrink a bit? Sure they are but you’re in a recession right? Your task is to sell more of the lower margin items to make up for the loss in the higher profit items or services. Sell ‘recession’ focused customers value priced products and services. Go on the offensive.
• Know your financials cold. This is a marketing & sales column but I’d be remiss if I didn’t add this. The best business model in the world will still fail if the owner doesn’t understand things like managing cash flow or what the contributing profit margin is for the various products and services they sell. If you don’t, get a good CPA and get this right.
• Create other ways for customers to access your products. I know of a local store that has a great customer following both locally and nationally but its location is not at all optimal. The price of gas has definitely impacted their business in a negative way. One solution, however, is right in front of them. They have a great, well traveled website that is chock full of high-quality content for their customers. Guess what? They never took the next step and extended their site to include selling their products. If they had built a sales channel through their website, they may have been able to counterpunch the reduced walk-in traffic in their store.
Want a great example of a store that has remote locations but has grown its business nationally through their website sales? Go to http://www.vanns.com.