A recession does not mean the end of your business unless you navigate those rough waters blindly. Here are three rocks that can sink your business ship unless you avoid them while navigating the dangerous waters of a tough market. You might get wet but no need to capsize.
By George Torok
A recession does not mean the end of your business unless you navigate those rough waters blindly. Here are three rocks that can sink your business ship unless you avoid them while navigating the dangerous waters of a tough market. You might get wet but no need to capsize.
Cut expenses across the board
Cut marketing. Cut staff. Cut all expenditures! This siren call is the most common and foolish mistake. It’s common because it is a knee jerk reaction that requires no thinking. It’s foolish for the same reasons. Making across the board cuts is a political response. It’s not a smart business strategy. If cutting across the board in tough times was smart then raising all expenses in good times would also be smart.
Instead, review all expenditures and categorize each line item into A, B and C categories in terms of ROI. “A” items are those expenditures where you can measure a strong return. Continue spending and maybe even increase these investments. “B” items are those that you believe are good but you haven’t yet developed an accurate measurement. Continue these activities, improve the tactics and improve the measurement. “C” items are losers. Stop these completely.
Cut your prices
You will be asked to cut your price. Don’t act like that is a surprise. And don’t pretend that this is the first time. So prepare for an onslaught of such requests. Prepare to deal with the price issue strategically not as a prisoner. Don’t cut price - without an equivalent exchange in value or a reduction in your costs. For example you might allow a discount for early payment or a larger order.
Another way to deal with price resistance is to introduce a lower value product. At the same time introduce a higher value product so the original product which is now in the middle looks more attractive. This is a variation of the good-better-best positioning. If you can’t afford a Lexus you can always buy a Toyota.
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Imagine how it looks when you stop attending trade shows, discontinue your advertising, shelve your newsletter, stop meeting with clients and avoid networking events. Imagine what your clients will think, what your competitors can say and what prospects might believe. None of it will be positive for you or your business.
When times are bad, people need to hear from you more often. Especially make a point of connecting with your best clients and advocates more often. Make your connections more personable so they can feel your confidence.
For the rest of your clients and contacts find efficient ways to stay connected. Maybe it’s a good time to launch your newsletter - or publish it more often. Explore the tools on the Internet that allow you to stay in touch with people easier and more cost effectively. It might be a good time to launch your blog, build your FaceBook page or post videos on YouTube.
A recession can be tough. No need to panic. It’s time to think and act smart with your marketing. Keep your business off the rocks while aiming for the deeper waters beyond. Don’t stop paddling until you are clear of the rocks.
© George Torok is the co-author of the bestselling Secrets of Power Marketing. It's published in at least seven countries. He helps small and medium businesses gain an unfair advantage over the competition. Get your free copy of "50 Power Marketing Ideas" at http://www.PowerMarketing.ca Arrange for Torok to speak at your conference by visiting http:///www.Torok.com For media interviews call 905-335-1997
Showing posts with label recession. Show all posts
Showing posts with label recession. Show all posts
Wednesday, June 16, 2010
Tuesday, February 16, 2010
Recession? Who Cares? Your Business Can Still Be Successful
In every economic downturn, entrepreneurs have created successful businesses through the combination of seeking new opportunities, getting creative and taking action. Specific examples of companies and what they did to succeed serve as an example for entrepreneurs today.
By Barbara Roemer
The media reports are full of bad news about the economy on a global, national and even household level. Predictions abound on if another severe downturn like the Great Depression will begin, and if it does, when it will start and how long it will last.
Turn off the news and think about this: Consumers do not stop spending in a downturn; they just become more selective on where to spend their dollars. They look for what appears to be a better deal, whether it is better pricing, better customer service, a special add-on, easier sales process, and more.
Even during the Great Depression (that began in 1929), consumers were still spending. Companies that survived, and even thrived, got creative and took action. Here are just a few examples from that time period:
* Kellogg and Post were once pretty close competitors until the Great Depression. Kellogg came out swinging, with heavy marketing; Post took the no-growth strategy - thinking they needed to save money and not spend it. Kellogg overtook Post, and Post has never caught up. A similar situation occurred with Chevrolet and Ford. Chevrolet increased their marketing and had a large market lead over Ford for many years.
* Proctor and Gamble began a huge branding campaign by being the first company to sponsor radio soap operas, which was a significant form of entertainment and relaxation for listeners. Their name became a household word and remains so today.
* Bixler Jewelers, credited as the oldest jeweler in America, saw a drop in customer traffic and decided to open a free lending library in the store. This increased their traffic, helped to maintain customer loyalty, and little by little, their sales improved and they are still in business today.
* A.E. Schmidt was a billiard table manufacturer when the Depression hit. They diversified and sold janitorial supplies to restaurants. They also sought new markets for their billiard tables, approaching the US government about the need to provide inexpensive and positive activities for those in government work camps during the long, boring evenings when they weren’t working – and billiards became one of the top activities at those camps.
* Cornell Iron Works was a specialty ironworks provider. In the Depression, they broadened their market so that they not only made specialty railings, grates and stairways; they also made plain metal siding for delivery trucks and security doors.
Some entrepreneurs saw opportunities that others didn’t see during the Depression, and took them.
During the Great Depression, most brokerages had either closed, or were afraid to take on new clients. This left many people, who still wanted to invest in the stock market, with no place to go. Howard Buffet (the father of multi-billionaire Warren Buffet) recognized this need and opened his own brokerage to fill the need.
* Walt Disney knew people still wanted entertainment, and provided it at a low cost through animated cartoons.
* Ever hear of Monopoly? The rise of this game occurred as another form of cheap entertainment. A small investment for the Monopoly game became a way to see hope in the future, and as players developed their money making skills, they could pretend they were real estate barons.
There have been severe recessions since the Great Depression ended, and during each one, new and existing businesses were built to great levels of success.
Two companies that began business in a recession are Domino’s Pizza and Toys R Us. They thrived by using new marketing models. Domino’s Pizza created a marketing campaign that no other pizza company had: if they didn’t deliver the pizza within 30 minutes, the customer did not have to pay for it. Toys R Us transferred the warehouse store concept to selling toys - a first for that niche.
A very short list of some other companies that started business during economic downturns include: Wrigley Gum, UPS, NewEgg, Super 8 Motel, Microsoft, Symantec, Nantucket Juice, Zippo Lighters and Hewlett Packard. These companies are giants, and are well-known by multitudes!
What are the main keys to success in these examples?
1. GET CREATIVE with marketing, business models, product diversification and positioning, and,
2. SEEK the opportunities that others do not see, and,
3. TAKE ACTION, because of, and in spite of, the economic news.
Don’t get caught up in the fear that is being propagated on the news channels. Instead, focus on what you can do to create you success, regardless of the current economy.
For free resources, including a free report "Top 10 Reasons Entrepreneurs Fail, & What to Do so YOU SUCCEED!" visit http://www.successmasteryprogram.com/Top-10-ebook-request.html . Barbara Roemer uses her advanced education and certifications, and over 20 years of experience to guide others on the path to creating a fulfilling and successful business life.
By Barbara Roemer
The media reports are full of bad news about the economy on a global, national and even household level. Predictions abound on if another severe downturn like the Great Depression will begin, and if it does, when it will start and how long it will last.
Turn off the news and think about this: Consumers do not stop spending in a downturn; they just become more selective on where to spend their dollars. They look for what appears to be a better deal, whether it is better pricing, better customer service, a special add-on, easier sales process, and more.
Even during the Great Depression (that began in 1929), consumers were still spending. Companies that survived, and even thrived, got creative and took action. Here are just a few examples from that time period:
* Kellogg and Post were once pretty close competitors until the Great Depression. Kellogg came out swinging, with heavy marketing; Post took the no-growth strategy - thinking they needed to save money and not spend it. Kellogg overtook Post, and Post has never caught up. A similar situation occurred with Chevrolet and Ford. Chevrolet increased their marketing and had a large market lead over Ford for many years.
* Proctor and Gamble began a huge branding campaign by being the first company to sponsor radio soap operas, which was a significant form of entertainment and relaxation for listeners. Their name became a household word and remains so today.
* Bixler Jewelers, credited as the oldest jeweler in America, saw a drop in customer traffic and decided to open a free lending library in the store. This increased their traffic, helped to maintain customer loyalty, and little by little, their sales improved and they are still in business today.
* A.E. Schmidt was a billiard table manufacturer when the Depression hit. They diversified and sold janitorial supplies to restaurants. They also sought new markets for their billiard tables, approaching the US government about the need to provide inexpensive and positive activities for those in government work camps during the long, boring evenings when they weren’t working – and billiards became one of the top activities at those camps.
* Cornell Iron Works was a specialty ironworks provider. In the Depression, they broadened their market so that they not only made specialty railings, grates and stairways; they also made plain metal siding for delivery trucks and security doors.
Some entrepreneurs saw opportunities that others didn’t see during the Depression, and took them.
During the Great Depression, most brokerages had either closed, or were afraid to take on new clients. This left many people, who still wanted to invest in the stock market, with no place to go. Howard Buffet (the father of multi-billionaire Warren Buffet) recognized this need and opened his own brokerage to fill the need.
* Walt Disney knew people still wanted entertainment, and provided it at a low cost through animated cartoons.
* Ever hear of Monopoly? The rise of this game occurred as another form of cheap entertainment. A small investment for the Monopoly game became a way to see hope in the future, and as players developed their money making skills, they could pretend they were real estate barons.
There have been severe recessions since the Great Depression ended, and during each one, new and existing businesses were built to great levels of success.
Two companies that began business in a recession are Domino’s Pizza and Toys R Us. They thrived by using new marketing models. Domino’s Pizza created a marketing campaign that no other pizza company had: if they didn’t deliver the pizza within 30 minutes, the customer did not have to pay for it. Toys R Us transferred the warehouse store concept to selling toys - a first for that niche.
A very short list of some other companies that started business during economic downturns include: Wrigley Gum, UPS, NewEgg, Super 8 Motel, Microsoft, Symantec, Nantucket Juice, Zippo Lighters and Hewlett Packard. These companies are giants, and are well-known by multitudes!
What are the main keys to success in these examples?
1. GET CREATIVE with marketing, business models, product diversification and positioning, and,
2. SEEK the opportunities that others do not see, and,
3. TAKE ACTION, because of, and in spite of, the economic news.
Don’t get caught up in the fear that is being propagated on the news channels. Instead, focus on what you can do to create you success, regardless of the current economy.
For free resources, including a free report "Top 10 Reasons Entrepreneurs Fail, & What to Do so YOU SUCCEED!" visit http://www.successmasteryprogram.com/Top-10-ebook-request.html . Barbara Roemer uses her advanced education and certifications, and over 20 years of experience to guide others on the path to creating a fulfilling and successful business life.
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