What will you do if the madness of today's economy turns out to be the new normal?
Every time you fill your gas tank, go grocery shopping, pick up a newspaper or turn on the news channels, you get hit in the face with news of a down economy, how the recession and bear markets are upon us — and this just in from Chicken Little … the sky is falling!
It's enough to make you curl up in the fetal position and never leave your bed! But that isn't what leaders do. Leaders are responsible for taking care of their operations under any circumstances. What if this isn't a down economy? What if this is the NEW economy, where we are finally feeling the effects of global economic shifts and the emergence of India and China as large players who have global impact? Gone are the economic pleasure cruises of the '90s; forecasts are showing today's conditions will continue for the foreseeable future. So what do you do?
Option #1: Close the doors, shut the business down and roll over and die.
Option #2: Hunker down and hope you emerge out the other side intact and capable of operating again.
Option #3: Take steps to not just survive but thrive in these economic conditions.
Some businesses are going to choose Option #1 because they are tired and don't have the fight left in them anymore. Survival of the fittest applies to the business world as well and the life cycles of businesses end when they reach this option.
Option #2 is a wait-and-see approach, but last time I checked hope is not a strategy. Passive leadership can exist in good economic times but will fail in tough times. Hoping for a change in customer attitudes, hoping the government will step in to take corrective action and hoping things will simply turn around is like Tom Hanks sitting on his island in Cast Away hoping to be rescued. Nothing happened until he took matters into his own hands and decided to finally go for it with the resources he had available.
Which brings us to Option #3: Taking action not only to survive but to thrive in these economic conditions. It starts with a gut check. Americans are at their best when the chips are down and their backs are against the wall. We come out firing with the belief we are the best there is and are committed to proving that fact. The first and most important step to thriving in this economy is attitude. Getting bummed every time you pass a gas station and see the price increase a few cents isn't going to get you in the right frame of mind to thrive. Focus on the challenge you have and decide deep down inside that with the right approach, you can thrive.
Once you've set your mind to committing to exceeding expectations in this economy; follow these strategies.
Strategy #1: Retaining Customers
Customer loyalty has never been more critical than in this economy. Take proactive measures to keep customers instead of spinning your wheels trying to get them back.
Just Do This…
Make the ordering process easier and more streamlined for the customer.
Research your customers for a more in-depth understanding of what they do and what pressures they are facing.
Host a focus group lunch and find out how their needs have shifted and how you can provide for those needs.
Survey your customers for what they like best and worst about your products and services.
Make a checklist of your most important customers and how frequently you need to contact them to stay in their minds and to show you are eager to serve them.
Strategy #2: Reduce Costs
Do not cut off your nose to spite your face. For some reason, the first place most executives look to make cost cuts are in labor and marketing — two of the worst places to reduce costs! In tough economic situations, marketing is even more critical to thriving and keeping your name in front of customers and prospects (See Strategy #4). Out of sight means out of mind, and out of mind means out of money. You need to stay visible and invest wisely in your marketing efforts.
Labor cost-cutting began in the '80s because companies were bloated. Those cuts were needed and easy to do without negatively affecting bottom-line performance. Twenty years later, the labor costs are as lean as can be and any further cuts here will negatively impact your quality and service. If you need an example of how bad this can be — get on an airplane and compare it to your flying experience of 20 years ago.
Just Do This…
Evaluate travel schedules and look for ways to maximize customer contacts in combination trips.
Organize work-around job combinations that best fit the talent on your team instead of hard-line job descriptions.
Make internal information available instantly to those who need it.
Eliminate support work that adds no or low value to the customer.
Build better controls into ordering systems to eliminate errors and double work
Train and cross train extensively for better flexibility in the workforce.
Strategy #3: Closing Sales Now
The days of trolling for prospects and doing the slow drip no longer apply in the new economy with the current pace of business. Sales need to be closed quicker with better presentations and more active follow-up in shorter time frames because whoever is the freshest on the customer's mind gets the sale. Also, separating job tasks lets the salespeople do sales and paperwork people do the paperwork. Why have a sales thoroughbred in the stall filling out paperwork and processing forms when they do their best work out in the field? Work to have your full-time sales people out selling. The more hours in the week they are actually selling the happier they are and the better your sales will be.
Sales are never more predatory than in challenging economic times, so sharpen those teeth and get to the ideas that beat out the competition.
Just Do This…
Determine the weakest competitor and target their clients.
Restructure your sales work to allow those who are best in the field to be in the field the most and use others for support.
Identify your weakest customer relationship and create a specific strategy to lock them up for years to come.
Measure each salesperson's ratios — let the numbers speak for themselves.
Brainstorm on how to speed up those prospects in process.
Just as you can't shoot pool with a scared stick you can't close sales if you have to have the money — be confident.
Strategy #4: Don't Stop Marketing
One of the greatest benefits of a challenging economy is how it forces us to examine areas of our businesses. Remember in the early days of the dot-com boom how Internet companies were buying Super Bowl ads only to be gone a few years later? Think they could've used that $3 million in marketing dollars on 30 seconds of an ad in a better way?
Now is the time to analyze your marketing dollars — not stop using them. Marketing in this economy is critical to thriving, but you need to make every dollar count and hit the targets you are going after. Direct mail, trinket giveaways and golf-hole sponsorships are as old school as cassette tapes. People under the age of 40 consider the Yellow Pages dinosaurs, so why pay for a full page ad?
Just Do This…
List all of your marketing vehicles. Determine which have the greatest impact and which you have no clue what they do for you. You'll figure out which ones to get rid of and which ones to spend more money on
Look for untapped marketing ideas that are effective yet inexpensive. (Pssst, your website sucks! Make it better.)
You don't need a big budget to make a big impact — get creative, have fun and get everyone involved.
Accepting our business environment as the new economy will position you in front of those pining for the good ol' days, waiting for them to return. You don't have the time to wait and see; it's time to dig in and get aggressive. Make the necessary changes to be back on top of your competitors and set the tone for others to follow. Leaders know only one view. For everyone else behind — the view never changes. Get out in front of the pack and thrive!