Tony Collier (not his real name) ran a very successful manufacturing organization. He had been in business for 12 years and the business had successfully negotiated some troubling times in the first three years, and in years 7 – 10. For the last two years, business had been expanding quite aggressively, albeit with only two customers. Both these customers were recently purchased by US competitors, and the signals from the new owners are somewhat concerning – production seems to be heading South, and nothing Tony can do or say appears to be changing their minds.
On another front, Tony’s oldest customer is going out of business. The products he was buying from Tony were part of old technology that has now been discontinued. The owner is retiring, and is planning to sell off the business, or close it down. Either way, Tony’s livelihood looks to be under some stress.
Sound familiar? Well, it happens more often than you can believe.
So what can we learn from Tony’s experience, and how does he begin his renaissance?
The economic cycle
People say that the only certainties in life are death and taxes. Well, history has shown that another certainty is that when an economy grows, it will inevitably decline in time. The following graph shows US historical growth since the late 1700’s.
The fortunes of individual businesses and markets rise and fall in much the same way – obviously not within the same timeline, but rise and fall they will. Those businesses that recognize this fact, and plan to deal with these fluctuations will be best placed to maintain momentum. Ignore this fact and you risk failure. Trying to limit the ups and downs of this inevitable roller coaster ride should be a task that every businessperson tackles – head on! So, come early 2008, where do you think we are in the economic cycle?
Marketing Tip of the Month
Six steps to overcoming this roller coaster ride
Here are 6 steps that companies can take to flatten this economic roller coaster by filling in the valleys and taking advantage of the hills:
1. Never stop looking for customers Don’t stop looking for customers just because “you can’t handle any more business”. Sooner or later you’ll have the capacity and then it will be a struggle to find new business. Find a way to have more customers than you need, and try to manage the demand. Try to negotiate partial orders. Outsource part of the production or service if you can’t handle it yourself. But find a way.
Having a customer already doing some business with you will give you a great chance of getting more business from that customer when YOU need it.
2. Spend money when you have money When things are going well, companies want to fatten their bottom line instead of plowing it back into the foundation of the business. This is totally understandable, but often, shortsighted. The most common situation is that businesses only look to spend marketing money when times are tough. But how many of them put the money aside in preparation for that time? Consequently, they have limited funds WHEN IT IS NEEDED MOST and therefore find it tough to make up lost ground. This often forces them into a downward spiral. They should be spending money to maintain awareness and have customers standing on the sidelines, ready to order.
3. Don’t wait for the downturn to look for recovery – by then it’s too late In many ways, if you plan for your next downturn, you’ll be in great shape when it comes. In fact, if you’ve already put plans in place, and are executing those plans, you could prevent the next downturn from coming at all.
So, what makes new customers call? Think AIDA – Attention, Interest, Desire, and Action. Step #1 – Catch their attention. Ensure that they are aware of you. You can’t do that if you remain silent. Step #2 – Ensure that you are communicating with them about the reasons they should buy – this will raise their interest in buying from you. Without these crucial first steps, you have no chance of creating a desire and an action in them to buy from you.
4. Embrace change – it can keep you ahead of the chasing pack Change is another certainty in life. The world around you is changing minute by minute. If you stand still, then you are in fact falling behind. In most cases, unless you have a monopoly or uniqueness so great (and that will change soon enough anyway), you have to stay with the pack by accepting change, at very least.
Embrace change and you could streak ahead. Make the change WORK FOR YOU and prevent the downturn.
5. Do smart marketing – it keeps things affordable Many companies are afraid of marketing. Why? Probably because they have never implemented a properly coordinated marketing plan. Ad hoc advertising or promotional activities DOES NOT make for proper marketing. This thinking leads to misconceptions about what marketing really is and how it can and should be implemented. Most important is the understanding of how marketing can help. One of the overriding concerns to owner/managers is the cost of marketing. So the solution is simply to walk away? Dead wrong!
All companies should be marketing at one level or another. And since money is usually tight, SMART MARKETING IS THE ONLY SOLUTION. Smart Marketing can be defined as: the marketing that is totally appropriate to the needs of the specific company. Such marketing has to be planned and properly executed to ensure that the goals of the company are considered, and that includes the financial constraints, which are paramount. Smart Marketing ensures that you spend the right amount of money to generate the best possible returns.
The biggest challenge to small and midsize businesses is having the right resources available to execute proper marketing. And that includes people. Some companies have embraced outsourcing as a solution. Others have employed internal marketers. For those that haven’t dealt satisfactorily with this challenge, they could look to hire a marketing coach that can help to educate, guide, and plan the companies marketing. What benefits does coaching bring to the business?
Prevents owners/managers from stumbling around in the dark.
Have someone to confide in, and someone that can help them to make more knowledgeable marketing and business decisions.
Use someone else’s experience to help speed up decisions and implementation
Have someone encourage you through the (unfamiliar) marketing process.
Have someone help you stay focused on the important marketing tasks at hand and help you avoid the pitfalls.
6. Differentiate yourself in the market Most competitors in a market are undifferentiated. In other words, they all look and sound like each other. The successful companies ensure that they have a way to look and sound different from their competitors, either in real or perceived terms. Once they have identified that differentiation they develop a plan to take advantage of that. They set goals and objectives, budgets and responsibilities and have a way to execute and measure success. By doing that they will be able to adjust their plans and deliver success.
So have an open mind to find the solution that works for you. Don’t let the status quo remain – if you do you could find everyone else passing you by as you slide down that slippery slope into the valley.
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