Articles - 'Slump Busting'
Published in Sales & Marketing Professional
Chris Merrington is an independent marketing consultant and offers his advice on how to survive a recession.
There is much talk in the media about a possible recession looming. I survived the last recession in the early ‘90’s and learnt many lessons which are still very relevant. Here are some practical advice relevant to all companies.
To quote BT “Work smarter not harder”. Now is the time to really work smarter. Budgets are tighter, spending is being cut back both on the high street and at the business level. Confidence is no longer rock solid. If you can survive now as we possibly enter a recession, then when we come out the other side you can be in better shape and fighting fit to grow your business profitably.
I have outlined ten ‘commandments’ to help you build your business:
1. Look after your existing clients
Focus on your existing clients or customers – new customers are 6-7 times more expensive to recruit than to retain existing ones.Find out what they really need and how you compare to your competitors. Find ways to build more business with them.
2. Identify your most profitable customers and nurture them.
Not all customers are created equal.Pareto’s rule rules OK! “20% of your customers account for 80% of your business”.
3. Have an active referral programme
Referred customers are the next best thing to an existing customer.A client recommending you is FREE marketing.
4. Take a critical look at your business Are you just like all your competitors? Re-look at your business – do you have real points of difference? Ones which your customers value? Ones which they will pay a premium for?
5. Value your best employees
Do you really value your employees? When did you last praise them? Someone once said “There are 2 things employees want more than money and sex – recognition and praise” Retention of your best employees is vital. The cost of replacing key employees is reckoned to be 150% of annual salary when all associated costs are taken into account
6. Surprise and delight your customers
If you are in the service business, make sure your customer service doesn’t let you down. Ask a friend to “experience” your service. If you run a restaurant ask your friend to have a meal with your compliments. What they have to do in return is provide feedback on
- What was right?
- What was wrong?
- How could it be better?
Remember a delighted customer is twice as likely to return as a satisfied customer
7. Innovate
Imagine you had just entered your industry, how would you do it differently knowing what you know now? How would Richard Branson tackle your market place? You have less resources, so you need to be more resourceful. Sack yourself and return as your ambitious successor- what will you do differently?
8. Maintain or even improve the quality of your product/service
Don’t compromise on the quality of your product or service – Customers may have less money but that means they will want to spend it even more wisely.
9. Prioritise and focus on what really matters
Decide the most important things for your business and concentrate on them. Be ruthless – don’t be side-tracked by unimportant issues.
10. Review your pricing structure
Be creative with pricing. Avoid chopping prices. Add value instead or bundle. Encourage trading up ie buy 3 get one free.
As added value here is the eleventh!
11. Use technology to leverage your business
Embrace technology (computers, mobile phones, the internet etc) Technology can save you huge amounts of time and money.For the first time in history David can take on Goliath and win. A small business can compete with most big corporates with equivalent technology.