Interesting news day today. If you believe the economists, we are not in a recession. According to President George we are not headed into a recession. Hmmm. I have to admit that there is a part of me that enjoys delusional people. I mean I can be an optimist as much as the next guy, but at some point you need to recognize that Elvis has left the building and Rick Pitino was right - Larry Bird is not walking back through the door. So let's do it, let's make the official announcement of what all of us who make the economy run already know - ladies and gentlemen we are in a recession! (applause please)
Ok, this is not news to cheer about as we know there is a lot of pain being inflicted and there will be casualties. If we are not careful it may get you, me and my best friend's sister's boyfriend's brother's girlfriend plus a bunch of other people we don't know. But, as GI Joe once said - "knowing is half the battle" and if we are going to battle the recession we better face it head on. Therefore in officially acknowledging its arrival, I am pleased to provide five simple tips on how to ride the recession wave. The advice is free of charge, but donations are accepted!
Focus on what you do best
Yes, tip one is boring and for most of us pretty obvious, but you would be amazed at how many companies fail to get back to the basics. Your customers came to you and stay with you because of what you do well. So my first piece of advice is to retrench and focus on doing what made you successful in the first place. Starbucks is a great example of this. In as much as I hope they don't do something stupid with their coffee prices, I applaud them for announcing to the world that they stopped doing their core well. Shutting down for five hours to train employees cost a lot of money and shows some real commitment and testicular fortitude!
Get Creative about costs
Human nature seems to require us to cut the wrong costs as soon as things go bad. No raises for our best people this year, cut training, stop advertising, reduce research/development, etc. Please, I beg you, don't do it! Tell your controller to step back and think for a minute before slashing everything. Instead of just cutting costs, be creative in considering what to cut. I advise our customers to ask themselves and their management team to ask themselves two questions: 1) - what can we do to reduce the cost of producing/delivering our product/service by 25% without impacting our customer value proposition? 2) - what can we do to run our business more efficiently today without impacting our ability to grow? Positioning the cost cutting discussion in these terms should lead to innovative solutions that will help the business today and tomorrow while not being demoralizing to management and staff. It takes a negative and creates a positive that will hopefully position your company to ride out the downturn and come out faster/stronger than everyone else.
Invest in your brand
One of the first cost casualties when times get tough is the investment in branding initiatives such as new collateral, advertising campaigns, updating websites, etc. Go against conventional wisdom and take advantage of their unwillingness to invest. I know its painful and expensive, but by keeping your brand fresh and in the public your demonstrating to both current and potential customers that you are here to stay and that your confident about your business. Your brand is one of your most important assets, so treat it accordingly.
Get cozy with your best customers
Your best customers are your best customers for a reason. Unfortunately, if the 80/20 rule is right most of us are typically spending far too much time dealing with our smaller, problem child customers. Or, we are so focused on getting the next customer we forgot about why we got the good one in the first place. My advice - stop it! It's a lot easier and less expensive to grow an existing customer than to get a new one so spend some quality time with the ones you already have. Doing so is pretty easy as you already have the relationship. Take them lunch/dinner, out for a drink or just get them on the phone to talk. One of the things I try to do from time to time is engage my customers in general business conversations that I can steer towards specifics of their business. It almost always leads to more work.
The bottom line is that at some point your competitors will go after your best customer. You've got a much better chance of keeping them and surviving the tough times if you've built and managed the relationship . Now is the time to invest in your relationships.
Think
Its a concept that is largely underrated but one that really deserves most of your attention. I try to take one day a month to get out of the office and do nothing but think. In doing so, I might spend the day reading or just driving around but whatever it is, it provides me an opportunity to recharge my batteries and step away from the noise created by the day-to-day business challenges. In doing so I get to work on my business rather than work in my business. To be honest some of my best ideas (like this blog post) come from this process. Even if you can't get away for a full day, find an afternoon or two where you can do it. You'll be amazed at the solutions you come up with and the results you achieve.
So there you go, my free advice for riding out the recession. Hopefully it helps and if not, well you get what you pay for!
Ok, this is not news to cheer about as we know there is a lot of pain being inflicted and there will be casualties. If we are not careful it may get you, me and my best friend's sister's boyfriend's brother's girlfriend plus a bunch of other people we don't know. But, as GI Joe once said - "knowing is half the battle" and if we are going to battle the recession we better face it head on. Therefore in officially acknowledging its arrival, I am pleased to provide five simple tips on how to ride the recession wave. The advice is free of charge, but donations are accepted!
Focus on what you do best
Yes, tip one is boring and for most of us pretty obvious, but you would be amazed at how many companies fail to get back to the basics. Your customers came to you and stay with you because of what you do well. So my first piece of advice is to retrench and focus on doing what made you successful in the first place. Starbucks is a great example of this. In as much as I hope they don't do something stupid with their coffee prices, I applaud them for announcing to the world that they stopped doing their core well. Shutting down for five hours to train employees cost a lot of money and shows some real commitment and testicular fortitude!
Get Creative about costs
Human nature seems to require us to cut the wrong costs as soon as things go bad. No raises for our best people this year, cut training, stop advertising, reduce research/development, etc. Please, I beg you, don't do it! Tell your controller to step back and think for a minute before slashing everything. Instead of just cutting costs, be creative in considering what to cut. I advise our customers to ask themselves and their management team to ask themselves two questions: 1) - what can we do to reduce the cost of producing/delivering our product/service by 25% without impacting our customer value proposition? 2) - what can we do to run our business more efficiently today without impacting our ability to grow? Positioning the cost cutting discussion in these terms should lead to innovative solutions that will help the business today and tomorrow while not being demoralizing to management and staff. It takes a negative and creates a positive that will hopefully position your company to ride out the downturn and come out faster/stronger than everyone else.
Invest in your brand
One of the first cost casualties when times get tough is the investment in branding initiatives such as new collateral, advertising campaigns, updating websites, etc. Go against conventional wisdom and take advantage of their unwillingness to invest. I know its painful and expensive, but by keeping your brand fresh and in the public your demonstrating to both current and potential customers that you are here to stay and that your confident about your business. Your brand is one of your most important assets, so treat it accordingly.
Get cozy with your best customers
Your best customers are your best customers for a reason. Unfortunately, if the 80/20 rule is right most of us are typically spending far too much time dealing with our smaller, problem child customers. Or, we are so focused on getting the next customer we forgot about why we got the good one in the first place. My advice - stop it! It's a lot easier and less expensive to grow an existing customer than to get a new one so spend some quality time with the ones you already have. Doing so is pretty easy as you already have the relationship. Take them lunch/dinner, out for a drink or just get them on the phone to talk. One of the things I try to do from time to time is engage my customers in general business conversations that I can steer towards specifics of their business. It almost always leads to more work.
The bottom line is that at some point your competitors will go after your best customer. You've got a much better chance of keeping them and surviving the tough times if you've built and managed the relationship . Now is the time to invest in your relationships.
Think
Its a concept that is largely underrated but one that really deserves most of your attention. I try to take one day a month to get out of the office and do nothing but think. In doing so, I might spend the day reading or just driving around but whatever it is, it provides me an opportunity to recharge my batteries and step away from the noise created by the day-to-day business challenges. In doing so I get to work on my business rather than work in my business. To be honest some of my best ideas (like this blog post) come from this process. Even if you can't get away for a full day, find an afternoon or two where you can do it. You'll be amazed at the solutions you come up with and the results you achieve.
So there you go, my free advice for riding out the recession. Hopefully it helps and if not, well you get what you pay for!
1 comment:
Boy, were your insights and perspectives right! We were in a "cloaked recession" that was being denied and hidden by our government early in the year.
Totally agree on focusing on existing customers during a recession as a source of lower-cost basis business.
So what's your next prediction?
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