Here’s all our blog posts for 2011. We hope you enjoy reading them!
Here’s all our blog posts for 2011. We hope you enjoy reading them!
With the passing of Steve Jobs, here are some quotes on leadership we can all reflect on.
“Innovation distinguishes between a leader and a follower.”
– Steve Jobs
“The people who are doing the work are the moving force behind the Macintosh. My job is to create a space for them, to clear out the rest of the organization and keep it at bay.”
– Steve Jobs
“Be a yardstick of quality. Some people aren’t used to an environment where excellence is expected.”
– Steve Jobs
“Management is doing things right; leadership is doing the right things.”
– Peter F. Drucker
“A leader is best when people barely know he exists. When his work is done, his aim fulfilled, they will say ‘we did it ourselves.’”
– Lao Tzu
“The manager asks how and when; the leader asks what and why.”
– Warren Bennis
“The first responsibility of a leader is to define reality. The last is to say thank you.”
– Max DePree
“If your actions inspire others to dream more, learn more, do more and become more, you are a leader.”
– John Quincy Adams
“The leader has to be practical and a realist, yet must talk the language of the visionary and the idealist.”
– Eric Hoffer
“Nearly all men can stand adversity, but if you want to test a man’s character, give him power.”
– Abraham Lincoln
“Lead and inspire people. Don’t try to manage and manipulate people. Inventories can be managed but people must be lead.”
– Ross Perot
“All of the great leaders have had one characteristic in common: it was the willingness to confront unequivocally the major anxiety of their people in their time. This, and not much else, is the essence of leadership.”
– John Kenneth Galbraith
“Leadership is practiced not so much in words as in attitude and in actions.
– Harold S. Geneen
“Leaders must be close enough to relate to others, but far enough ahead to motivate them.”
– John Maxwell
“The very essence of leadership is that you have to have a vision.”
“The key to successful leadership today is influence, not authority.”
– Kenneth Blanchard
“Leaders conceive and articulate goals that lift people out of their petty preoccupations and unite them in pursuit of objectives worthy of their best efforts.”
– John Gardner
“Our chief want is someone who will inspire us to be what we know we could be.”
– Ralph Waldo Emerson
“The ability to summon positive emotions during periods of intense stress lies at the heart of effective leadership.”
– Jim Loehr
“Never tell people how to do things. Tell them what to do and they will surprise you with their ingenuity.”
– General George Patton
“As we look ahead into the next century, leaders will be those who empower others.”
– Bill Gates
“Leadership is a potent combination of strategy and character. But if you must be without one, be without the strategy.
– Norman Schwarzkopf
“Ever since uncertainty became our insistent 21st century companion, leadership has taken a great leap backwards to the familiar territory of command and control.”
– Margaret Wheatley
“The growth and development of people is the highest calling of leadership.”
– Harvey S. Firestone
“One of the tests of leadership is the ability to recognize a problem before it becomes an emergency.”
– Arnold Glasow
“The function of leadership is to produce more leaders, not more followers.”
– Ralph Nader
“You don’t lead by hitting people over the head. That’s assault, not leadership.”
– Dwight D. Eisenhower
“Effective leadership is putting first things first. Effective management is discipline, carrying it out.”
– Stephen Covey
“The best executive is the one who has sense enough to pick good people to do what he wants done, and self-restraint to keep from meddling with them while they do it.”
– Theodore Roosevelt
“A leader is a dealer in hope.”
– Napoleon Bonaparte
“To be able to lead others, a man must be willing to go forward alone.”
– Harry Truman
“Example is not the main thing in influencing others; it is the only thing.”
– Albert Schweitzer
“People ask the difference between a leader and a boss. The leader works in the open, and the boss in covert.”
– Theodore Roosevelt
This is me looking a little worse for travel wear at Barnes and Noble in Washington DC, where I also had the opportunity to visit with my son, Hunter, who is studying International Business at George Washington University
Consulting work continues to be strong as businesses both large and small battle to survive in the global market downturn. It may seem difficult to believe but this is the ideal time for companies to maximize their opportunities. If you are not maximizing your opportunities then the Pritchard team can help you. Just drop me an email.
In this month’s newsletter article below, How Every Business Can Profit from an Economic Downturn, I point out the 15 Keys that will enable any business to profit from this downturn. Businesses will ignore this advice at their peril. I look forward to receiving your comments either on my website at email@example.com, or
Speaking presentations continue to be steady with the US and Europe continuing to provide the bulk of the work. Clients today are much more specific about the messages they want delivered and the outcomes they expect. I think I learn more out of the research and preparations for my speeches than any other avenue. It certainly keeps me buying Business Books and researching papers!
I also received a great testimonial from Alfonso Roberes– International Sponsorship Manager for Real Madrid CF, The world’s second most valuable sports team, who said this about “Kick Ass Business and Marketing Secrets”.
“This is an amazing Book with many challenging concepts and conclusions regarding new marketing tools in a globalized market. This practicable book will get you thinking and as Bob says, “No matter what your history or your current situation, you can achieve it all if you begin today.”
I have agreed to host a one hour weekly business program on Voice America Tuesdays at 5pm US Pacific Time, 8pm East Coast time, beginning the first week of October. The program goes out globally on the internet and will contain lots of business advice and interviews with the leading business people of the day.
I am also finalizing a 2 hour weekly business program to be broadcast every Sunday out of radio broadcast booths in the major casinos on the strip. I will interview all of the major business people visiting Las Vegas that week as well as provide editorial, take calls and and provide advice to businesses.
This month’s article “How Every Business Can Profit From an Economic Downturn”
Once the economy falters and business and consumers lose confidence, companies panic, lose focus and predictably discount, slash marketing budgets, and downsize.
Countless studies have proven this is precisely the wrong things to do.
So what should you do to not only survive, but grow your business in an economic downturn? Recessions actually produce great opportunities if you employ the right strategies. It is a time when you need to become highly focussed and dynamic. Positive leadership and confidence from the top becomes critical.
The important considerations required to be successful in a downturn are:
1. Define your desired outcomes. Totally focus time, energy and funds on achieving these outcomes. Going off on tangents or taking on new unproven initiatives can be a disaster.
2. Focus intently on achieving those goals. Don’t deviate without thorough evaluation of every opportunity and option.
3. Be disciplined, create a tight corporate culture, strong positive leadership is critical, be transparent to your team, involve them in the good news and the bad news.
4. Create a clear business and marketing strategy and detailed plan. Address challenges as opportunities, anticipate competitors’ strategies. Ensure you have the best business model, the most effective channels to market, the best strategic partners. Downturns are not the time to maintain less than great relationships.
Marketing can be expensive and wasteful if not precise. Ensure you have an effective Consumer Purchasing Benefit, Risk Reversal and Added Value strategy. Customer decisions are made emotionally so clearly define your value proposition in emotional and pragmatic terms. Understand your competitors, evaluate their appeal objectively, and clearly differentiate yourself. Promote brand awareness, build brand equity, keep the message consistent, use PR, network, refine and ‘fringe’ your database, use emails, the website and social media, speak at as many events, conferences as possible.
5. Maintain tight cost controls. Eliminate unnecessary or wasteful expenditure.
6. Don’t discount, enhance the value proposition. Discounting erodes profitability and competitiveness, does not enhance loyalty or build brand equity.
7. Be prepared to change. Examine every aspect of your business, your product, your distribution, your management structure, your marketing and your team. Encourage participation from all to increase efficiencies and find new more effective ways of achieving results. Empower everyone.
8. Measure everything. There is no endeavour in a business where you cannot measure performance. Set challenging goals then go and do everything possible to attain them. It is amazing what a company can achieve when everyone has a red hot focus.
9. Maximize the performance of your people. Your people are your most important asset, more important than any other aspect of your business. Train your team, empower them, develop teamwork, incentivize, and ensure the right people are in the right job. Eliminate cancers. Remember, the only way to change people is to change people. At all times, downturns in particular, it is critical to have a totally united, focused team.
10. Customers are god. The second most important people in any business are your customers. They are the one element that can send you out of business, simply by not buying from you. Involve them, nurture them, appreciate them, and reward them. It will pay off in the bad times and be a bonanza in the good times. Focus on categorizing customers according to “lifetime value”, and working with them to reduce the customers’ costs, improve their efficiencies and growing their revenues.
11. Continue R&D and innovation. Steve Jobs released the iPod in a recession after 9/11. He said “our belief is that if we keep giving customers great products, they will continue to buy” New initiatives attract business from competitors, weakening their competitiveness.
12. Work with your partners, distributors etc. It is critical that they believe in you, support you and go the extra mile for you. Remember, they are hurting too. Become their favourite client. Make sure they don’t cut the service they provide to you.
13. Remember, it is the size of the idea, not the size of the budget that counts. Encourage ideas, no idea is stupid. Everything that is in use today sounded like a dumb idea at some point. Frederick Smith’s thesis for federal Express was failed at college for being impractical. Only ideas generate efficiencies.
14. Be decisive. Don’t be afraid to make decisions or take actions to be decisive, no matter how unpalatable they may be. You must address issues or challenges as they arise. You cannot procrastinate.
15. Know your customer precisely, not demographically, but psychographically, and hone in with a rifle shot, not a shotgun.
This may seem like a lot of things you need to do. But business is not easy in the good times when over 95% of businesses still fail within 10 years. It is a lot harder in a downturn. But I guarantee you that if you look after these key elements; you will not only survive the downturn but will be in great shape to profit when the good times return.
Bob Pritchard, BSc, CSP, AISMM. firstname.lastname@example.org
If you would like to speak to me about any of the subjects I have mentioned in the newsletter or enquire about engaging any of the services provided by my global team, please contact me directly on email@example.com.
Social media is a powerful new communications medium that reaches over 350 million people a day. So what is social marketing?
It is a rethinking of marketing opportunities so that they are:
Social media marketing is pull, not push marketing.
New techniques such as BLOGS and Search Engine Optimisation are critical.
Top 10 Social Media Tips for Beginners
1. The time for Twitter, Facebook and LinkedIn is now.
Be present on the world’s most popular social networking sites.
2. Be one with Google.
Register your web site with Google and Google Maps so customers can find you. Use Google Alerts to see what the media and bloggers are saying about you.
3. Post every day.
Commit to blogging/updating your social media presence as part of your daily business routine.
4. Find those who will be interested in your content.
Read blogs and visit web sites to seek those interested in what your company has to say.
5. Engage in conversation.
Comment, post, update your status and offer content that compels responses.
6. Be visual.
Utilize video/YouTube to show customers what makes your business different.
7. Social media content should not be the same as your advertising message.
Advertising is not social media content. Provide real insights into your expertise.
8. Find out what your customers think.
Encourage customers to ask questions, report concerns and give feedback on your service.
9. Pace yourself.
You can always increase frequency of content but slowing down can be a red flag.
10. Be patient.
Success requires effort and a willingness to adapt to any changes you may face.
Business Week recently said that “Millions of people are creating content for the social web. It is highly likely that your competitors are already there and your customers have been there for a long time”.
It is critical that you create a focused plan to leverage social platforms to achieve real business goals. You need to think about your overall business strategy and the role social media might play in achieving these goals.
There are a number of ways to leverage social media:
Let’s look at these one at a time.
Social media touches over 350 million people a day, the most direct and immediate channel into the hearts and minds of consumers. This enables brands to find evangelists as well as deserters. It is up to you to craft the message to reinforce or change attitudes.
The majority of business lost by companies is not due to competitors (9%) but due to not paying enough attention to customers (68%). Social media enables constant contact and feedback maximizing positive brand equity and gives customers the support they seek at very low cost and enables them to be connected to a large pool of consumers who think like they do. A very positive win:win.
It is imperative for companies to get high quality information on clients, competitors and marketplace changes. Launching new products, new brands and new target markets requires constant up to date knowledge. Traditional market research has been expensive and slow. Social media enables real time analysis of consumer trends; focus groups in cyberspace and real time dialogue are possible at a fraction of traditional costs. You need experts to analyze the information but you can get literally millions of consumers discussing their rational and emotional needs in real time.
You can play a behaviour supporting role in the life of your consumer. You can build a social relationship with the brand. Starbucks have launched a slew of social tools across platforms from Facebook to iPhone. Do not barrage your potential customers with ego driven “how great you are” information. Social media is about them, not you.
Social media is the ideal vehicle to craft great promotions, putting bums on seats and creating a WOW viral campaign. When created thoughtfully, great promotions get passed along very quickly, continually doubling themselves also instantaneously.
This follows the old established formula of:
Excite > educate > motivate > convert.
You need to plan strategically to bring your prospect along the path to where they are ready to buy. This takes education. Brands need to leverage the interactive capabilities within social platforms to educate and motivate their customers through discussion boards, video, images and testimonials. Unlike 30 second commercials, social networks enable you to create a dialogue and build a scenario over a long period of time, enabling education on even the most complex solutions.
Just about any form of transaction and revenue generating application can be integrated into social platforms. While their applications can be complex, they are inexpensive and you are always close to the customer.
New Product Development
Companies are leveraging the collective brainpower of their social media fans to identify innovative new market opportunities and assist with the development of new product concepts. Cisco awarded a $250,000 prize to social media fans who created a new commercial opportunity. By doing this, a company is not limited to the brainpower of people within their 4 walls.
Customer Relationships Management
Social media is the new version, albeit an infinitely faster, more fluid and more interactive version of mailing lists that were so important with traditional media. Being able to build millions, even tens of millions, of fans very quickly and maintaining a constant dialogue with them enables endless possibilities.
Social media is possibly the most exciting development in communication history and will have a profound effect on the world, both commercially and socially.
Business is certainly tougher now than it was this time last year.
When things are good, it is easy to make money. When there is a big shake up in the market such as the recession, the question is “What do we need to do to survive?”
But it is important to realise that when this recession is over, it will not be business as usual. The consumer will have changed, the way we do business will be much different. Technology will have changed the way we run our offices, how we manufacture product, the consumer will get more information online and buy more online. The customer has always been king, but when we come out of this recession, they will be even more powerful.
Companies that are not utilizing today’s technology to reduce costs and improve efficiency and productivity in every aspect of their business, who are not strong on the web, who do not offer extraordinary customer service, need to make changes immediately. In the new economy, efficiency in manufacture and marketing and delivering precisely what the customer wants, will be critical.
You will also need to clearly differentiate your business. You become successful by NOT doing what everyone else is doing. Harvard Business studies show that of 51 different business categories, 45 of them are commoditised.
Whether you succeed or not comes down to just 5 things.
You MUST seize the initiative … the way we do business is changing … it takes leadership, passion and courage to change the way YOU do business. And in a recession we must change how we do business.
Most business people attribute the business failures and high unemployment to a collapse of the financial system. I think the collapse of the financial system is just part of it. I believe the problem is a much more fundamental one.
The consumer across the world has been profoundly influenced by the technology revolution. Each time new technology is introduced and computers updated, so is the consumer. And this pace of change is increasing rapidly.
The public have more access to information, they seek immediate answers and gratification and require not only personal service, but personalised service and they want it now.
Technology savvy businesses are more efficient, provide better products and don’t just supply the market’s needs but predict them. The public are also very rapidly becoming increasingly community and environmentally aware. This is beginning to affect every decision they make and everything they buy. The public also expect the companies they deal with to be good community citizens. It is interesting that it is the legacy companies that are failing. It is legacy company employees who are being laid off.
The reasons business is in trouble
If you talk to business people about why their businesses are in trouble, you get 3 answers: Credit has dried up, the customers are just not spending, events beyond our control just overtook us.
These are just excuses, the real reasons are;
Let me ask a couple of basic questions. Firstly of the management people:
Do you have state of the art technology for managing:
Do you have regular in-depth meetings with customers, do you predict what products and services customers will buy from you in 2, 5, 10 years’ time
Shell have regular meetings predicting what gas stations will look like in 5, 10, 20 years’ time. What products will they sell? They now sell gasoline in supermarkets, predicted 15 years ago. Do you know what your market will look like in 10 years?
Do you have an exceptional web presence, do you employ search engine optimisation and offer enhanced online product ranges?
Are you getting a strong ROI on your marketing investment? Do you think 50% of your advertising and marketing is working? Usually less than 10% of businesses believe their marketing is effective. That is not acceptable. What are they doing to change it? Usually nothing.
Unfortunately, very few companies answer yes to any of these basic questions.
Let’s ask the marketers a couple of questions.
Why do marketers use meaningless terms like Reach, Frequency, Impressions, CPM or terms like Investment, ROI, Yield?
This is a major problem, marketers don’t talk the language of business. They still live in their own little protective, non accountable world.
How many marketers can provide a ROI for every marketing investment they make – advertising, PR, merchandising, entertainment and so on? We have the ability, with today’s technology, to measure absolutely everything. Yet marketers are primarily unaccountable.
Final question for marketers. How many of you still predominantly use traditional media for marketing – TV, radio, print? This will ensure your marketing is highly inefficient and ineffective.
These few questions demonstrate that most businesses are technologically illiterate, have poor performance measurement, don’t predict consumer patterns now or in the future and their marketing is stone age and not working, marketers are not thinking in the language of business and marketing measurement is non-existent.
Studies have highlighted other reasons why businesses have not been able to ride out this downturn.
And yet companies believe they are struggling because credit became tight?
The credit issue simply highlighted the fundamental weaknesses in their business structures.
Before I go through the strategies for being successful in a recession, it is important that we understand what works in marketing and what doesn’t…otherwise what I tell you will not make sense.
So before we get into specifics of how to Make Your Business Recession Proof, let’s go back to basics. I am going to begin by debunking some of the MYTHS of marketing.
Most business leaders and marketers think having great products or services, competitive prices, strong brand awareness and satisfied customers are important. 87% of all marketing focuses on one, or a combination of these 4 elements. According to studies done by Chiat Day and others, 95% of all marketing today does not work.
The reality is that if you focus on any one or any combination of these you are focusing on the wrong things and you will fail.
Let’s look at them one at a time.
Product: Is there any difference between the product you sell and those your competitors sell?
You say your selection is better, what do your competitors say? The reality is that 92% of customers see like products as interchangeable. They don’t give a damn whether they buy from you … or someone else! Therefore you can’t differentiate your business based on the products or services you offer unless your product is unique.
Price: Everyone says they are in a price sensitive business and the first thing most businesses promote is price. If everyone bought based on price, everyone would drive a Scoda, not wear brand name clothes and buy supermarket generics. The reality is only 13% of people buy based on price.
87% consider other factors more important; reputation, service, return policy, ease of purchase and so on. Price driven businesses continually reduce their ROI and become less competitive. But if you promote price, of course people will buy based on price.
Brand Awareness: The reality is that brand awareness today is worth little, brand loyalty is dead. Brand Equity is the key to tomorrow’s brand success.
Satisfied customers: 62% of “satisfied” customers don’t return. Customers deserve to be satisfied. To get them back, you have to “knock their socks off”.
How many of you keep in touch with everyone they ever sold a product to? This doesn’t include “postcards”, emails or other such useless communication. I’m talking about meaningful communication. You will not “knock their socks off” with a postcard or an email.
How many of you have segmenting and predictive software? This enables you to predict what people will buy so you can be proactive rather than waiting for some to buy. This demonstrates to the customer that you understand them and care about them. It also generates a lot of income
In my experience, most business live on advertising! Yet Harvard Business School demonstrates that unless you get 4 out of 5 sales from word of mouth or repeat sales you will probably fail in the medium to longer term. Over 50% of my business today is developing word of mouth strategies for corporations.
So price, product, brand awareness and satisfied customers do not drive your business, so what does? The marketing keys that do work are:
What business are you in: Before you can effectively market and promote your business, you must know what business you are in. Leroy Merlin are NOT in the hardware business, they are in the problem solving business. People go to them when they have a problem. We increased sales of a hardware chain by 257% by simply making that distinction. You MUST be selling what the customer is buying, otherwise there is a disconnect. In 30 years of marketing I have never found a business where what the company does is the business they are in.
You first question must be “what business am I really in??”
Sell Emotional Benefits: Every decision people make is emotional. People only buy emotional benefits. They make the decision to buy emotionally and then justify it pragmatically. Emotion triggers the preconscious mind recall. Yet most marketing and advertising, particularly print, is not emotional at all. You need to commit the customer emotionally to get a sale. Ask yourself, “How emotional is my sales pitch?”Customer Purchasing Benefit: You need to determine your most powerful point of difference.
What do you think of when you think of Volvo? Safety and reliability. This key point of difference has sold millions of cars. What is your CPB? What makes you different? What makes a customer call you first? A good CPB can mean the difference between success and failure.
Communication: You must be a great communicator with both customers and members of your team. Most of us are poor communicators; we don’t listen, we don’t have empathy. We don’t speak the language of our customer. How many of us know NLP? Everyone in business should understand NLP. Any businessperson that doesn’t know NLP is playing poker with a deck of about 10 cards.
Know your customer: It is also critical to have great relationships with our customers. Most of us don’t even know our customers. We lump them all in together … usually in demographic categories. You can’t guess what customers want, we are usually wrong!!
We should know the customers spouse’s name, children’s names, favourite sports, religion and so on. This enables us to communicate, be empathetic, show them you are interested and care, to tailor communications to hit their hot buttons. You need to really carefully listen to your customers, and then build on relationship.
Differentiate: How do you differentiate your business? There are only three real ways you can differentiate your business today; Position yourself differently, Add Value and Great Service, Think Outside the Square. Most businesses are very bad at differentiating themselves.
Let’s look at how important Added Value and Great Service is.
Firstly, it is 15 times more expensive to get a new customer than to retain an existing one. So why wouldn’t you focus on retaining existing customers? I find it remarkable that most businesses have a marketing and advertising budget, yet practically none have a Customer Retention Budget.
Secondly, let’s look at some PriceWaterhouseCooper studies:
Contribution to ROI. In successful companies, Customer Service makes up 31% of the contribution to ROI, up from 26% five years earlier, compared with 15% for New Products (down 1%) and 8% for Advertising and Promotion ( down 6%).
Driving Business Growth: Customer Service makes up 42% of the contribution to Business Growth, up from 34% five years earlier, compared with 29% for New Products (down 2%) and 28% for Advertising and Promotion ( down 7%).
Customer Service Leaders: Can charge 9-13% more than competitors without losing customers and grow 25-405 faster. Great customer service leads to very happy customers and word of mouth.
Why is word of mouth so important? If you need more evidence, these figures from the Rockefeller Institute on why people stop doing business with you are staggering.
This 68% hadn’t done anything wrong, the customers just felt unloved. To be successful, you need advocates, people raving about you.
Let me ask you a question. Have you had a fantastic customer experience in the last week?
A more important question is; Have you given a customer a fantastic customer experience in the last week? If the answer is no, you have a lot of work to do.
Because technology and the way we do business is changing so rapidly it is critical that we keep learning. Even though I have been a marketer for 40 years, I still put aside 4 hours a week to go to the local major book store, whether it be Dymocks, Barnes & Noble or Waterstones, depending where I am to catch up on new business releases. Sometimes I read the whole book, other times just a few pages.
According to Harvard Business School, “A primary reason for lack of success is that ONLY 11% of business owners or managers have ANY ongoing learning.” Do you have a business coach? Do you listen to CD’s in the car? In order to be successful in the future, we will all have to continually increase our knowledge base.
Remember: If you are not learning, someone somewhere else is, and if they know more than you, they will win.
When the economy is good, companies focus on sales. When it slows down, the focus shifts.
Businesses behave in one of three ways.
The Ostrich – Preserve status quo and hope for the best
The Headless Chicken – Blindly slash costs across the board
The Fox – Make business more effective so they can be in a stronger position when growth returns.
Most businesses panic fearing that; Clients will cut back or stop spending and sacrifice quality and buy low cost products. This is true, but only to a point.
Don’t forget. When unemployment is 10%, 90% of people are still employed. With the government financial incentives, the fall in interest rates and oil prices, people have a lot more money, not less.
A recession is not a problem, it is a tremendous opportunity to build your business as competitors cut back. You can gain clients, gain loyalty and boost market share.
Before I discuss how to build your business in a recession, let me tell you the 6 Keys to guarantee failure in a Recession;
You can thrive in a bad economy but most businesses make mistakes when deciding what to do.
The recession highlights weaknesses in businesses which haven’t employed the right strategy and the right marketing in good times. If you have;
you will breeze through this recession with substantial gains in market share.
There is business out there. A client of mine is a printer and had no work. A couple of weeks ago he cold call door knocked from Monday to Friday 8am until 8pm and got 28 jobs. If he had sat in his print shop and waited for the phone to ring, he would have got none!
Let’s look at the steps to take in business and marketing your business in tough times separately.
There is no such thing as a quick fix. But whether you are the CEO or a marketer there are several things you must do:
Most of all, don’t sit around complaining. Tackle it head on. Rethink, restructure and strengthen your business. New ideas don’t need to be expensive, just creative.
Let’s look at the keys to running a business in a recession first. Management needs to:
1. Focus on Making Money. Cut down on waste, but focus on generating revenue. You need to bring in more customers. Use your existing customers to attract new customers.
2. Cut Costs Cleverly. Analyse your costs, drive them down. Don’t cut across the board. Have meetings with your team, have them propose efficiencies. Only cut costs that don’t affect customers in any way.
3. Monitor Your Cash Flow
4. Clearly Differentiate from Competitors
5. Maximise Your Website Effectiveness. For example, work closely with Search Engines.
Enhance product range, give information, easy to navigate and process orders, answer questions
6. Measure Performance. You need to track the success of all initiatives, whether stock, employee performance, customer deliveries or marketing. With today’s technology, every aspect of a business’s performance can be measured.
7. Take Advantage of Innovation and Technology. Keep developing innovation and technology for the future. It will increase opportunity and reduce costs and set you up for the good times that will come. I discuss some of the technology opportunities a bit later.
8. Do You Have the Right People? There is an old saying “It is easier to change people than it is to change people”. Anyone not being positive, innovative, committed and underperforming must go. At the same time, the CEO must be more visible, encourage and cement employee relations and loyalty. In recession, employees are nervous about their job, this affects performance. Give encouragement, increase productivity.
9. Understand Your Product Costs and Profit Margins. Ensure you know precisely what your profit margins are on each product. Focus on selling higher margin products. Carefully monitor your inventory of product, minimise slow sellers.
10. Create New Market Segments. Reposition or repackage products to attract a new market segment.
11. Improve Your Skills. Get a business coach. Be the best you can be. Tiger Woods has a coach. Raphael Nadal has a coach.
12. Support Partners, Distributors. Allowances may encourage distributors to stock product.
13. Solicit New JVs/Distribution Channels
Create relationships with complementary, non-competing businesses. Maybe you can join them in presenting seminars. Perhaps link with non-competing but allied web sites.
14. Take Advantage of Your Size. Small businesses are flexible, responsive and adaptive. Ensure you keep on your toes, chase new markets, watch the news stories. You can adapt, big companies can’t.
15. Become the Knowledge Expert. Get free exposure in newspapers, local radio, seminars and online. Build reputation and credibility. This is a safe haven for customers in a recession.
Secondly, how do you market your business in a recession:
1. Be positive, enthusiastic. Enthusiasm is contagious. Motivate both your people and clients
2. Don’t stop marketing. Most businesses cut the budgets and the time spent on marketing. This is the perfect time for marketers. Media outlets are struggling, all selling off the bottom of the rate card. Fantastic deals to be had. If necessary, use :15 secs not :30 secs; use radio, not TV.
In tough times, trusted brands, including yours, are more trusted.
3. Research and Prioritise Your Customers. Invest in knowing all you can about your customers. Differentiate yourself to hit the customer’s hot buttons. You should have a database of every person who has ever bought from you. If you don’t, you deserve to fail. It is expensive to get a new customer, very inexpensive to retain. How can you retain them if you don’t know who they are or where to get in touch with them? Prioritise your customers. Focus on the 20% that generate 80% of your revenue.
4. The Customer is King. The customer is the only person that counts. In a recession they are also looking for value and ways to cut costs. Value does not just mean price; ease of purchase, reliability, service, delivery, quality. Look at different value combinations, repackaging. Always be the customer’s friend, be warm, empathetic and interested.
5. Give Superior Service. Loyal customers are gold at any time but in a downturn they will maintain and give you the foundation to build your business. Create the WOW factor, provide great service, add value, provide useful advice, keep in touch, provide faster delivery, education, information. This produces advocates, generating word of mouth – the key to successful business.
6. Provide Value. We discussed earlier the benefits of great service and added value. Apart from being the most effective way to grow the business, in tough times there are more complaints and returns which are costly to business.
7. Seek Additional Revenue Sources. Leverage your current customers …chase referrals.
Segment customers … commence predictive selling. Adding value can increase revenue and margin. Explore new channels and approaches. Consult with customers.
8. Increase Your Online Business. Online creates new opportunities, new, often unexpected customers. In Q4 ’08, while business sales were crashing, online sales increased 6%.
Don’t think of the website just in terms of current products and services. It is a chance to greatly extend your range and sales potential.
The internet gets 1.5 billion unique searches a day, they are people looking to BUY. You can sell and source with much less risk. You can sell thousands of items online without carrying stock.
The traditional way to build a business is:
i) Strengthen your core business
ii) Extend the brand with more products and services
iii) Leverage into new markets with current offering
iv) Introduce new products into new markets.
Building traditional business is risky, particularly in a recession. The challenges are: organisational,
brand relevance, market insight and understanding. The internet doesn’t pose these risks AND you can have a good website up very inexpensively in three days.
9. Innovate. Use the recession to study competitors, study trends, increase efficiency.
10. Reactivate Dormant Accounts. Sit down with these customers, or call them and talk to them. Don’t hard sell, let them know you miss them. Don’t seem needy. Follow up with a letter, a special offer if you know them well, maybe include testimonials. Remind them of your products, service, availability. You are there for them. On average, 1 in 10 will buy.
11. Reactivate Old Leads. Many of those leads you gave up on represent business. Studies show 80% of sales are made on the 5th – 7th contact. Over 75% of sales people call only 3 times. Again, call them or meet with them and chat. On average 1 in 10 will buy.
12. Keep Prices Realistic. When times are tough, your competitors also review their prices. Phantom shop, check competitors’ websites, understand what they are doing. The solution is to be competitive. But don’t forget, customer service leaders can charge more and retain the business.
So you don’t have to be cheaper, just competitive. REMEMBER: Great service and happy customers are the hedges against losing customers and maintaining prices in a recession. DON’T slash prices, very difficult to get them back up. Add value instead. It shows you care.
13. Use Risk Reversal
It is important to increase efficiency and productivity using technology. Technology provides:
A few examples of the effectiveness and efficiency of new technology.:
Variable Data Technology; September 2005 – Fixed line carrier received a 36.1% response rate from a print direct mail using Variable Data printing to 340,000 customers, against a traditional direct mail response rate for a similar program of 1.7.
SMS/Radio Commercial; Tying SMS response into radio ads and station loyalty clubs, advertisers are data mining and interacting one on one to buy a pizza, attend an event or drive radio audience.
On-line viral promotion; Unilever s promotion for AXE mens toiletry range cost $20,000 and was sent to 30,000 email addresses, in 6 months generated 50 million visits of 9 minutes duration and huge retail sales.
Segmentation and Predictive Software; Northern Tools compares the purchases of their clients e.g. people who buy a hammer also buy a Phillips Head screwdriver. They detail the top 3,000 previously sold products and the top 7 related products that sold best with them. They then promote the other 7 products to the customer who had bought any of the 8 products. They constantly analyse the data and constantly refine it.
By making these purchase predictions they generated more than $3mln from just one campaign. So how specific can targeting get? The Democratic Party in the US has defined the community into 2,700 different categories and crafts individual messages for each.
As product offerings become more similar and response times to market change become shorter, marketers need to look at new media. New media dramatically outperforms traditional media with
Customer acquisition, Buyer behaviour and decision making, Customer loyalty and retention, Providing information, Obtaining instant, measurable results
This represents a paradigm shift in marketing.
The performance of the various media over the last few years highlights this shift:
People purchasing on line 2008 875 million
Mobile phones 24/7 2008 2.9 billion
Global retail sales 2007 – 2008 Down 3.6%
Online purchases 2008 Up 19%
Mobile advertising 2008 Up 40%
Traditional advertising 2008 Down 16%
Does anyone think retail sales will increase 40% next year? Where the future lies is obvious.
An interesting view of database marketing from Nielsen Global Online shows 40% of online shoppers buy from a particular site because of a friend’s recommendation. Further, if you had a database of 10,000 customers, in 2 years you would have 100 new customers EVERY WEEK that had never been into your store.
So, how do you build a database? A major Swedish Ferry company had 12m passengers per annum but had kept no data. By running 4 separate competition sites on the ships plus collecting data on booking, then reconciling the entry forms, in 12 months had a 3.3 million database. Now they can be segmented and marketed to. The result, a sales increase of 30% over 2 years.
New media is ideal for not only attracting but retaining customers at very low cost which is both controllable and measureable. The ways to do this are by:
Let’s look at these one at a time.
Search Engine Optimisation
Superbreak Hotels in the UK had low website traffic, used SEO, revenues increased GBP 154 million.
Pay Per Click
This is where advertisers on a search engine, advertising network, blog etc. only pay for the advertising when someone clicks on the advertisement to visit the advertiser’s site. Potential customers who click are more likely to buy. The cost per click ranges from 1 cent to $15.00.
This is direct mail to your own or purchased database.
Your online community, blogs, podcasts or forums can be used for education, information or sales.
Hand Held Devices
The fastest growing means of communication today is hand held devices such as iPhones, iPods, PDAs etc. These can be used to send personally tailored video or message pitches to drive immediate sales. Used very effectively by Coke, Kelloggs, and others.
Benefits of this New Media
These communication media are the most effective marketing tools today. To be competitive, to not only survive the recession but be competitive in the future you must embrace them.
It is an excellent opportunity for creative marketing so it is important to be able to think outside the traditional box. You also require Vision, Passion and Commitment. Without this you will not be able to compete in this new environment.
We are in the knowledge age … when the person with the most knowledge always wins. Why it is important to keep learning. Continue to be creative, innovative and outwork your competitors.
It’s not about how hard you work. It’s about how much knowledge you have. And the power of your ideas. You have to be flexible, be creative and smart because today good is not good enough.
The reality is that it is tough out there and your competitors are also getting better at what they do.
You all need to set daily goals, be really excited to come to work in the morning and be surrounded by vibrant people with great ideas?
We are the primary contributors to our own success. You need to take on board everything you have heard today, determine if any of it would improve your business, analyse your performance and make changes,…and do it now. You can’t improve by doing what everyone else does.
Ten years ago we talked about “internet years”, where technical advances each year were more than in the previous 7 years. Now we talk about “digital years”, 2-3 times faster than “internet years”. That means change today is happening 20 times faster than it did just 10 years ago.
In my opening comments I said that I believe this is not just a credit crunch but it is also a technology revolution. This is causing a double effect. To beat this recession and survive beyond it, you need to do business differently. To be able to prosper when the recession’s over will take a very different business than most people run today.
Dramatic changes now will not only get you through the recession but will stand you in good stead for the future. It is telling that it is the legacy companies that are the most affected by this recession.
So keep learning, change the way you do business. Most of all, be enthusiastic.