Even though the global economy is experiencing the most significant downturn in years, that doesn’t mean it’s impossible for businesses to generate new sales and increase profits.
It is widely known that during periods of economic downturn more innovations are conceived and more business owners have made their fortunes, than in comparable times of economic stability or prosperity. Gains made by companies during these challenging times have often resulted from better cost management, new products/services, retaining best customers and effectively tapping into new business ventures.
In fact, downturns can actually serve as an ideal time for businesses to experiment with unconventional and creative ways to boost sales and gain market share. Here are “7 Proven Go’s” to ensure your business not only survives, but thrives, despite the economic downturn:
1.Go Further – Use the Internet to further your reach
In 2008, a small Kiwi company, Flightcell International was approached by The Texas Department of Public Safety to supply satellite-based communication and tracking systems for their new Eurocopter helicopters. Flightcell’s adaptive position reporting system allows aircraft to be tracked continuously, thereby enhancing safety and operational management.
This contract was not the first to be landed by Flightcell in America – it had been previously been called upon to supply high-tech communications kits to help aircraft crew with relief efforts in hurricane-ravaged New Orleans. The state requested 85 of Flightcell’s kits to help Army reserve helicopter pilots and rescue crew talk to other aircraft and people on the ground during the disaster relief effort. This technology was vital because it allows pilots to use satellite phones and mobile phones hands free by linking them up to a helmet or headset.
Instead of being limited to working in a 50-mile radius of its Nelson office (where it employs only 4 staff), now Flightcell is drawing business from the whole of North America, Australia and other overseas markets. By working over the Internet, this small company’s geographic boundaries have literally disappeared.
Many other companies have also chosen to add a multilingual component to their web sites. The boost in sales abroad makes sense as customers tend to respond more often – and more positively to communications in their native tongue.
2.Go Untapped – break into underserved markets
One largely-ignored market opportunity is often referred to as the ” bottom of the pyramid .” This term is often used to describe the largest and poorest socioeconomic group or the mass market. This large pool of consumers is often overlooked as a viable/lucrative target market because it is believed to be much more price conscious than the other segments.
A rags to riches Australian retailer story clearly illustrates what can be achieved by bringing economically priced products to the mass market – by placing tools into the hands of millions of DIY users ,as opposed to competing alongside established competitors for the business of qualified industry trades people. Brisbane-based do-it-yourself auto parts business, Super Cheap Auto, capitalised on the unmet demand for parts in the DIY market. Now it employs over 3,500 staff, has over 200 non-franchised stores in Australia and New Zealand and is approaching sales of $500 million. Though founded originally in 1974 as a mail-order business, exponential growth occurred under the stewardship of Bob Thorn. In 2004, Thorn was awarded Australian Entrepreneur of the Year by the National Retail Association and Super Cheap was listed on the Australian Stock Exchange in 2004 with a market capitalisation of $200 million. Not a bad business for one that started out (and still does) target the “bottom of the pyramid”.
3.Go Bigger – Expand without expanding your costs
I was recently approached by a client who wanted us to assist with the business plan and set up of a venture in the take-away food industry. The premise for this business was very intriguing – to provide nutritious, gourmet meals to young professionals and families. Her thinking was that customers would attend at select retail outlets across the city, make their selections for the week and then take home the meals – which only needed to be warmed (as they were pre-cooked).
According to the IBIS reports in Australia, the average consumer spends more on fast food in a week than they spend on meat, vegetables and non-alcoholic beverages at the grocery store. This might explain in part why obesity has become such an issue in this country. In light of these statistics…I think it’s fair to say that she was on to a very interesting and potentially lucrative idea.
Even though the idea was fantastic – she had never owned a business before, had no food experience and was struggling to decide where to put the retail outlets and how to manage all the staff remotely. But those weren’t the only challenges she faced…. The biggest problem that she faced was the sheer cost of establishing the retail outlets in key areas where traffic of her core demographic, busy professionals, was high. Landlords in the CBD of Melbourne were asking $800-$1000/sq metre – which translated to rent of over $200,000 plus fit outs.
So we got creative and advised the client to employ a mobile outlet. For a total cost of about $50,000, she could buy, retrofit a van and begin cruising the streets during the lunch hour and the 4:30-6:30pm commuter rush. This would allow her to be exactly where her customers would be (i.e. the train stations, busy street corners) and make adjustments as necessary. For less money, she could extend her reach and she wouldn’t be tied to any bricks and mortar establishment that didn’t have the walk by traffic that was advertised by the landlord.
Even if a mobile retail outlet isn’t right for your particular business, you could consider a virtual office as a way to expand cost effectively and professionally into a new market or inter-state.
4.Go Deeper – Become your customer’s customer
Everyone knows good business is all about relationships. And supporting your client’s business is one of the best ways to build trust and strengthen the relationship. Next time you find yourself needing a cleaner, a copy writer, office furniture, printer cartridges or web development team, make a concerted effort to approach your customers that work in those fields to do the job. Granted, you must first get to know who your customers are and exactly what they do. Spend some time talking to your customers and make note of what you find out. Any time you invest in your customer, it further deepens your relationship and will lead, without a doubt, to future customer referrals and win-win outcomes.
5.Go Public – Profit from your own reputation and expertise
Presumably, you know your business (and industry) inside and out… Why not utilize that knowledge to expand into a new area that typically has low start-up costs and high contribution margins….consulting! Take for example Tracey, the owner of Simply Salons in Brisbane, Queensland. She utilizes her former career as a beauty salon owner to regularly provide marketing and customer service advice to salon owners around the country.
Even if you don’t want to consult, you can share your skills and expertise (and make incremental sales and profits) though paid speaking engagements, board appointments and networking groups. Another amazing way to commercialize the intellectual capital that you have amassed over your career is to write articles, publish or ghost write a book or simply sell audio/video presentations of your material. It has become incredibly cost effective to do this in recent years and websites like YouuTube, Facebook, Twitter, eBay, guru.com and eLance.com have made it easy for you to expand and reach customers and opportunities globally.
6. Go personal – increase your personal networking opportunities
Shake hands, meet people, and follow up with new acquaintances. Look for opportunities you might have missed before and find new ones to make personal connections. Spend time getting your business cards and brochures (with a real, compelling offer) updated and ready to distribute. Remember, it has been estimated that you may need to let people see you 7+ times before many make a buying decision – find new ways to get in front of more people, more often.
Is your stack of 500 business cards burning a hole in your desk drawer? Every day when you leave the house take ten business cards with you and make it a point to give them away. That’s ten cards times five work days – you do the math. In my experience, most business owners underestimate the value of exchanging business cards. In fact, I regularly see owners and senior executives attend networking events without a single card on them! Why would you throw $500-1000 away on a newspaper ad to potentially attract 5 new [potential] shoppers when you are ignoring an opportunity to spend less than $5 to meet and get the contact details of 10 good, qualified leads or strategic alliances? In my opinion, it’s the definition of insanity…
Have you ever heard of The Goldilocks strategy? Well, hear me out on this one – it is one of my personal favorites. Almost every one of us has a barber or hairstylist that they use on a regular basis. When is the last time you really paid attention to what goes on in a hair salon? It’s full of people sitting in chairs talking about nothing – the weather, the last movie they saw, a great book they read, the hot date they went on last week etc. Trust me, your hairstylist needs new material to talk about every single day. Have you ever thought of offering them a flat fee or a commission based on every referral that you get from them? Simply give them some business cards or brochures and give them an idea of the type of customers you are looking for.
Not only have I personally received business from placing my brochures in my favorite hair salon I’ve even picked up business myself while getting my hair cut. Opportunities to reach your ideal customer by marketing in the periphery (everywhere but the obvious places like newspapers, magazines and radio) are plentiful and very cost effective. Unlike mass media, you only have to pay for the actual referrals that you get which makes your return on investment very lucrative. These personal, creative, “guerilla” type tactics are all around you and are much more likely to result in converted sales because they are pre-qualified leads.
7. Go live – provide seminars on topics related to your product or services
Holding seminars and workshops is a great way, low cost way to establish your credibility and introduce what you do to groups in a non-threatening, relaxed environment. Consider delivering some dynamic training events or spend 1-2 hours providing new insights into topics (related to your business) that will help your attendees to become more profitable and successful. Be generous with your time and offer real, useful and practical solutions. If you come from a place of integrity and demonstrate a genuine intent to help and provide value, it will create trust and result in huge dividends to you in the long term.
Take for example Alex Carroll, the best-selling author of “Beat The Cops” (a book about how he has beat 8/10 speeding tickets and can show you how to do it too). I recently met Alex at a seminar for authors in New York and was amazed at how much time and valuable insights/advice he was willing to share. He wasn’t one of those speakers who brought up an idea and then said “but you will have to buy my book to find out exactly how to do that”. In fact he was so willing to help and to provide useful tips and strategies that we could all use right now to become more successful at selling our books via radio appearances that attendees were literally lined up afterwards to buy his suite of lists and products for $999!
Which brings me to my last point – make sure you have your special offers clearly explained and ready to go at the end of the event and “value add” (throw in extras to make it more attractive, never discount your prices) for immediate sign-ups on the day.
And remember, this global recession might be the best thing that ever happened to your business – that is, if you are willing to be flexible and experiment with some powerful, unconventional and creative ways to boost sales and gain market share. More fortunes were made in the Great Depression than in any other time and history. What are you waiting for?