- Getting their marketing systems in order. When the economy is rocking often business owners get lazy about marketing systems used to bring in new clients, boost business from existing clients, and build strong moats around their businesses.
- If they have employees, identifying the top talent out there and re-approaching them. They are more likely to be available and amiable between restructurings, underwater stock options, and employer uncertainty, etc.
- With competitors and complimentary businesses hurting and credit markets tightened up, both public and private business valuations are low. Acquisitions made now will be far cheaper and, if astutely approached, achieve greater returns over the long run. In some cases, significant returns can be achieved even in the near-term simply by bringing the clarity of more mature marketing systems to a target that did well when the economy was gangbusters but lacked systems useful when things got tougher.
- Re-evaluating their unique selling proposition, value proposition, and positioning. Going back to basics and reconsidering what sets them apart and how they communicate this (both in words and in actions).
- Taking market share from weaker, distracted, and confused competitors
- Boosting direct marketing activities with provable ROIs and cutting vague "branding" activities with less provable ROI (branding can still be a part of the direct marketing activities but it should be a secondary goal).
- Reaching out to clients, experimenting with new offers, packaging, and positioning. Also talking to clients, prospects, and others about their concerns, wants, and desires. Even in downturns we all still have needs and wants that we'll pay to get addressed.
- Cutting unprofitable relationships (clients, vendors, partners). Good times make us fat, stupid, and lazy. Nothing like necessity to force us to get back into shape.
- Stay focused. On what? That's for each one of us to decide. But it's important it be done deliberately or it won't be done at all. There are always distractions but when combined with strong emotions and widespread uncertainty it's even more difficult to decide where we want to go and then keep our eye on it.
Wednesday, March 25, 2009
Friday, March 20, 2009
(I suggest reading his actual opening remarks linked to in the article; they aren't as long as they appear at first - only ~7 pages).
Sunday, March 8, 2009
"Downturn my ass; they had no strategy to begin with."Lots of businesses are suffering these days. I feel for 'em, I really do.
What frustrates me though is that many have tremendous opportunities ahead... if only their owners would stop using the economy as a convenient way to avoid the truth (I'm sure you can come up with your own appropriate metaphor for this behavior). Downturns offer great opportunities for those businesses which are willing to face the truth and ask the tough questions that propel them forward.
A very agreeable phrase that I ran across awhile back goes something like this:
"Luck is when opportunity crosses paths with preparation."It's relevant to present circumstances, even if many would consider these unlucky times...
Let's take almost every local retail type business which I encounter. Based on observation, as a customer of many of them no less, the root cause is that they never had a plan for success to begin with. Their existence rested far too much on the opportunity portion and not enough on the preparation aspect.... of luck.
In short: their business models, being entirely reactive and not proactive, leave them (seemingly) powerless when(ever) the tide turns against them.
Recent economy woes are really just the final straws.
I can prove it.
To have sustainability the business owner must take deliberate action. And opening up the doors and putting up a sign... even having a good product or service... is not what I mean by deliberate. Nor is dropping yet another "me too" advertisement in the local paper or Yellow Pages.
(And if the only solution they can come up with is dropping prices, it just proves the point that our relationship could use some upkeep... on their part not mine; I'm the customer after all).
Maybe they intended to do more but found they didn't have to so they got complacent. Or maybe they've only existed in "good times" and never even realized they were missing something. Maybe they just barely skated by before and recent times has just proven how thin the ice was underneath them.
Whatever. The reason is irrelevant. What's important is that they get moving. (After all, with fewer customers, they ought to have more time on their hands). Some may also have to put their fragile egos aside... (a small price to pay for long-term success).
It's been said that great friends are ones that will empathize with you while also kicking you in the ass with the cold hard truth when you need to hear it.
So I have some questions for you...
- Why aren't you collecting my name, e-mail addy, phone number, snail-mail address?
- Why aren't you doing something compelling and useful with those "frequent customer" cards my wallet is bulging with?
- When was the last time you went out of your way to communicate with me outside of your store?
- Why aren't you trying to up-sell/cross-promote me something else that I might also find of interest?
- Translate "why you went into business" into something along the lines of "what's in it for me" and tell me all about it
- Why haven't you come up with a way to encourage me to bring in my friends to your establishment?
- Ask me what I like about you establishment. Ask me what I don't like about your establishment. (Make me feel like you actually want me to be honest and not just "nice").
- If I start coming in less often, reach out to me, so that I perceive that you actually noticed...
- Why aren't you trying to sell me your products and services in different ways that may be more conducive to my current concerns, pains, and desires? (a hint: it's not as simple as just lowering prices... in fact if you play your cards right you can keep your margins... maybe even boost 'em)
Yes, it seems that many places are suffering. It's too bad that economic woes are just a cover for the real cause of weakness in many businesses today: a lack of preparation.
Sure, sometimes one can scoot by but look where it gets you?
Whenever I have a client who seems to be treating symptoms and not the underlying problem I try my best to guide them back to reality. So, if you (or someone you know) falls into the aforementioned camp I leave you with this...
It's not (just) the economy, stupid. Get off your butt, stop lying to yourself and your friends to avoid a bruised ago, and do something about it. (Then, if it'll make you feel more motivated, consider how you'll be able to brag about how you kicked ass through the latest business cycle).
To change things you first must face the truth...
 Another one, this one coined by Warren Buffett is: "After all, you only find out who is swimming naked when the tide goes out". Stated shortly after September 11, 2001, he was referring to insurers who had failed to price policies properly (too low), certainly weren't prepared for the worst and thus were suffering mightily - some fatally. It's an appropriate metaphor for many recurring situations in history - and thus in business and in life.
Tuesday, March 3, 2009
Reading through HBR today I came across a discussion entitled "Big Company Lessons for Small Businesses". This quote is from Dick Harrington, former CEO of Thomson Reuters and who now works with early stage and small businesses through his investment firm Cue Ball. I thought it was particularly dead on:
"Most small businesses think that big companies have limitless resources and tons of money, and accordingly can do whatever they want. At the same time, most large companies think that all small ones are entrepreneurial, acting quickly, and bursting with creativity. Neither of these common beliefs is true."The full article is on-line here.