Steps to Take to Survive Downturn
No matter which kind of business you are in, marketing consultants say now is the perfect time to revise your strategy. Companies that retrench now have a better chance of surviving, if not flourishing, in a slack economy.
“Keep your focus on increasing every sales transaction rather than going after large numbers of new customers,” advises Jay Abraham, a veteran marketing consultant who counsels big and small companies.
If you must trim expenses, pricey print or television ads aimed at enhancing your image should be the first things to go. Instead, focus your energy and dollars on encouraging existing customers to spend more on your goods and services.
“If you offer every customer a better deal, like a larger quantity or a package of items or services in addition to the one the customer is buying, 30% to 40% will say yes,” said Abraham, who is based in Palos Verdes.
If you contact every customer 10 to 20 days after they’ve bought something from you, chances are that many will buy something else, Abraham said. He also suggests hooking up with small-business owners who sell similar, but non-competitive, products. For example, if you sell shoes, ask the owner of a reputable clothing store to refer its customers to your business, and vice versa.
When you do advertise, Abraham suggests making your ad stand out with a punchy headline promising a desirable deal. Make sure your ad says exactly why your product or service is better than others’. Be sure to offer a money-back guarantee to eliminate the customer’s risk when he or she buys from you. An effective ad also tells people exactly how to order or respond.
Bob Bly, a copywriter and marketing consultant based in New Milford, N.J., says right now is the time to “wrap a warm blanket” around all your valued customers or clients because this is a bad time to lose them.
Bly, who specializes in business-to-business marketing advice, recently wrote a 16-page booklet about marketing in an economic downturn. He agrees with Abraham that it is not the time to promote your company’s image with expensive ads or a glossy, 60-page annual report.
Instead, work on ways to emphasize your credibility and reputation as a company that customers can depend on for excellent products and services. Positioning yourself as a leader in your industry, even if you are still a feisty underdog, is an excellent way to build respect--and boost sales.
For instance, Bly recently produced a booklet explaining the different types of direct mailing for a client who specializes in direct-mail marketing. The company sent out the advice-packed booklet to customers and prospective customers. Bly also sent it to 100 reporters and editors. One mention of the booklet in a newspaper article generated about 1,000 inquiries. Bly believes that some of those inquiries will result in new business.
In a soft economy, you’ll see your customers become more price-sensitive and willing to shop around. To hang on to them, consider reducing your prices by 15% to 20%. “But, don’t instantly lower your prices to rock-bottom,” Bly cautions. “You may never be able to raise them again.”
When things are slow, instead of being depressed, Bly urges business owners to do the things they put off during busy periods. Why not clean out files, make technical improvements in products or services, revise your sales letters or redesign or create a slide presentation?
Since some income is better than no income, he also recommends that clients take on smaller projects that they would normally refuse.
For example, he knows a carpenter who specialized in room additions. During a slump, he called old customers and offered to do smaller jobs and handyman projects until larger remodeling jobs reappeared.
“The most important thing about a slow period is not to be depressed by it,” says Bly. “If you are depressed, prospects can sense your desperation and fear, and it has a negative effect on your dealings with them.”
Lawrence Kohn, president of Kohn Communications in Century City, organizes what he calls cooperative marketing groups. His aim is to bring together non-competing, but compatible, business owners or managers. Then he teaches them how to share client and customer lists, improve their telemarketing skills and refer clients to one another.
“The groups meet once a month,” said Kohn. “Each person accepts an assignment, and then there is peer pressure to complete it.”
One real estate-oriented group might have a building contractor, a real estate agent, a title company manager and a real estate attorney. Together they cook up a variety of ways to increase business for each other. They also offer each other moral support and professional expertise, two important things in uncertain economic times.
“There is nothing like personal contact when times are lean,” says Kohn, who also teaches telemarketing skills. “You have to use the telephone more to reach out to prospects. The phone is great because it doesn’t need a parking place or travel expenses.”
To order a copy of Bly’s 16-page booklet on recession-fighting marketing strategies, write him at 174 Holland Ave., New Milford, N.Y. 07646. The price for his Special Report 109 is $5.
MARKETING TIPS FOR COOL ECONOMIC TIMES Follow up by telephone after mailing brochures or advertisements to customers or prospective customers. Research shows that you can significantly boost sales if you follow every written contact with a phone call.
Eliminate the risk buyers feel by improving your money-back guarantees, warranties or service commitments.
Establish joint ventures with other companies to share the cost of marketing your products or services.
Offer additional products or services at a reduced price to boost your income.
Be optimistic and share your entrepreneurial spirit with customers, suppliers and vendors. Depression over the economy is contagious and counterproductive.
