My work in sales allows me the opportunity to meet with many business owners and 
(not surprisingly) I have been hearing many business owners complaining about the state of the economy. While I certainly agree that the national economy is in serious trouble I will add that the people of the United States have been through tough times before and have prevailed despite poor economic conditions. Any successful entrepreneur will tell you that a down economy offers many significant opportunities – you just have to look a little more carefully and work harder and smarter to capitalize on them.
One of the mistakes that businesses can make in a down economy is taking on the “hunker in the bunker” mentality by acting out of fear or desperation. Don’t. Hasty decisions and impulse reactions very rarely produce the desired result. With this in mind, here are a few things to keep in mind while we ride out the rough economy.
“This, too, shall pass.”
Remember that class you had to take in college called “Economics?” You may remember that one of the core properties of the American (and global) economy is that it is cyclical. It has its ups and downs, it grows and it shrinks. In fact, it is the cyclical nature of the economy that provides opportunity for growth and profit. Just keep in mind that no matter the times, whether good or bad, they will change, so prepare for them and you will thrive. There’s another book that you may have read that discusses this subject and points to the ant as an example from which to learn.
Market Your Business While Your Competition Isn’t
If there’s a perfect environment in which to advertise your business, it’s when your competition isn’t. Think about the opportunity you have to expand your marketshare to include your competitor’s customers when you project a consistent, recognizable image. Just because the economy is slow doesn’t mean people will stop buying paper clips, tools, food, entertainment, etc., it just means they will be more selective about how and where they buy what they need. So stay out in front of your clients and they will think of you when they are ready to buy. Keep in mind that the inverse is true as well, if you cut your marketing budget too deeply you are sure to give up market share to a more aggressive competitor.
Strengthen Your Core Competencies
When the only certainty is uncertainty people tighten their belts and spend less. This could mean less traffic, smaller sales or both. Your first response may be to seek out the business you normally wouldn’t pursue under “normal” circumstances. Be careful when going down this path – there’s a reason you don’t normally seek those dollars. Instead, focus on and strengthen your business’ core competencies then make sure that your marketing plan reflects your strategy.
Trust in the Value of Your Product or Service
Value your product and your clients will too. Avoid discounting your products too frequently and/or too deeply too help generate traffic. Doing so not only discounts the price, but discounts the value of your product. Plus, it only trains your customers to expect it the next time. If you need to make your products more affordable to increase traffic, raise awareness, etc., do so through lowering the price instead of offering discounts.
There’s an interesting story about a Napa Valley winery called Frog’s Leap. When they first began producing and selling their wines their goal was to offer a great-tasting wine for a below-average price. After several months of slow sales the marketing team decided to try increasing the price of their wine with the result that their sales actually increased. It turns out that the folks in the Napa Valley associated a wine’s quality paritally with its price. The lesson? Don’t sell your product short. Your clients want a good value, not cheap products.
A very savvy friend of mine summed up his company’s approach during tough economic times this way, “We are the best at what we do, the state economy doesn’t change that, and when the economy turns around, we will still be the best because we believe we are the best and behave accordingly.” Bravo, Mike!
Thanks for the read and God speed!
Jerod