Downturns cause panic amongst everyone. It is a knee-jerk reaction to throw the baby out with the bath water. While your business may be suffering, yours is not the only one.
Below Mijo! Brands offers some advice on how to survive this longer than expected economic turmoil.
1. Stay the course. While a substantive review of your strategy and ultimate offer is always recommended, be sure to begin by identifying the qualities that have led to your success to date. Identify your strengths and those of the team around you, then look to see how those strengths can be leveraged to support any area of the business that may not be doing so well.
2. Love your staff and customer. Extra services and staff are the first victims of a recession, but it is during tough times that business must make the extra effort to get closer to their customers. Cutting staff hours can impede service excellence and drive remaining customers away due to increased inefficiencies. If morale is down, service will be affected, and in a recession that is the last thing you need.
Remember, it costs substantially more to attract a new customer than retain an existing one. Take the time see how your customers doing and what, if any, suggestions they may have. Customers love being listened to and they will have a unique perspective on your business that you may be lacking. Price elasticity curves are changing. Customers are dedicating more time to hunting our bargains and negotiating prices, but may do so less with trusted brands. Keeping them happy will keep them loyal.
3. Invest in your network. A local magazine owner was recently heard threatening an advertiser of pulling their ad if they did not pay on time when they asked for an extended line of credit. The client could not pay. The magazine pulled the ad along with all other defaulters. The magazine is now out of business.
Stories abound about the chain reaction of non-payment of services. It's a Dangerous catch 22. Many small businesses that were on the cusp of success have disappeared, due to lack of cash flow, this in turns puts their suppliers at risk. The spiral could continue for a while.
It's in all our interests to talk to both customers and suppliers and be upfront about liquidity, however humbling that may be. We're in this crisis together. A little honesty up front may allow small business to plan more effectively for an uncertain future.
4. Keep communicating. This is the time to get your message heard. Brands that increase advertising spend during a downturn tend to fair better than those that cut budgets: out of site out of mind. You can negotiate incredible advertising rates and grab important market share while others are cutting back.
If you do have to cut advertising, review your brand and your various communication channels to focus on high-worth clients. Be creative in how you reach your audience. There are many social networking opportunities available that are relatively free and often underutilized. Twitter, Facebook and My Space are perhaps the most used and mainstream. But new platforms are being created everyday, invest the time in figuring out which will work best for you, then dedicate the time to update them regularly.
5. Review your offer and add value. You should not have to slash prices to stay afloat. While the economic downturn is worse than many expected, every business should have a contingency plan that not only provides a lifeline to their future but those of their employees.
Customers should probably understand your predicament because they or someone they know are in a similar one, but they want some signal that it's not just business as usual. They want to feel valued. While streamlining product portfolios or service offers is the norm, adding value to an existing offer will get noticed. Customers appreciate the small efforts that can have a big impact on their time and pocket books. Do away with flashy gimmicks and focus on providing a service that is dependable, useful and safe. Your customer will reward you.
