Weathering the Storm – Managing Your Business in a Stormy Economy

By John Stanley The world changed in October 2008, have you changed your business practices as well? If you plan to carry on doing things in the same way in 2009, you will be in for a shock. Every business will need to adapt to the new economy we all find ourselves in. The consumer is bound to “cocoon”. With less money in their wallet or purse they will spend less. They will still shop, but will be less adventurous and that impulse spend is going to shrink. All retailers are going to have to work harder to get the purse to open. In the short term a sale may work, but it will not be a long term strategy to keep the purse open. So, What are you going to do? Every business owner and manager should be asking three key questions of themselves and their business. – What should they keep doing? – What should they stop doing? – What should they start doing? – What Should you Keep doing? You already have customers and the most important thing to do is to keep those customers. The most cost effective way of growing your business is to keep your existing customers happy. I have already come across one retailer who has told me that they are cutting back (in fact eliminating) their training budget. They are cutting costs. They have also told me that the average sale per customer has also gone down since they stopped training their team. Now, they are putting it down to the economy, maybe it is a factor, but the last thing I would be doing is stopping the training program. I accept the “old timers” should maintain standards of customer service, but eh new guys will be facing the customer with less skills and no understanding of your customer culture. According to research, in the situation it can take up to two years to lose a customer, but it only needs your competition to carry on training their team and that process could be speeded up. What Should you Stop doing? If the above business had told me it had stopped using “interruption” marketing in newspapers, radio, billboards etc to get brand new customers, then I could agree that was a logical decision. When the impulse spend shrinks, it gets a lot more expensive and difficult to attract a brand new customer. The conversion rate to get that new customer may not be cost effective. But, how many businesses will reduce the training budget and increase the interruption marketing. They plan to yell louder to an audience who is not listening. What Should you Start doing? The best marketing strategy you can invest in is permission marketing. Getting your existing customers to come in more often and to refer you to a friend. My local town has just launched a “Local Shop” Program. The retailers and Small service businesses in the Chamber of Commerce have combined forces to develop a loyalty club that crosses over all their customer bases. Shop Local vouchers from these businesses are downloaded from the group’s webpage. This keeps the costs down in developing the program. If you’re not investing in referral or permission marketing then the present economic climate is a time to start. You are marketing to somebody who knows you and like what you do. They are friendly to you and your business and want to see you weather the storm. The key is to ask them how they can help and how they would like to receive information from you. If you just bombard them without asking them, you are abusing the trust that has been built up between you and the consumer. It may be time to start up a focus group with your customers, it you haven’t already done so. What’s Your Action Plan? If you haven’t considered the following, I would encourage you to do so. 1.  Employ a mystery shopper organisation to ensure you are maintaining a high level of customer service. 2.  Increase the budget in effective team customer service training. 3.  Introduce an empowerment policy so that your team have the confidence and support to excel in customer service. 4.  Reduce your Interruption Marketing budget. 5.  Increase your referral marketing budget. 6.  Work on building the database of your existing customers. 7.  Introduce a “bring a friend” campaign with existing customers. 8.  Introduce surprise “customer perks” to keep customers coming back. 9.  Keep the team in the picture with the average sale per customer. 10.  Reward the team when they exceed set targets. Finally, don’t ignore what’s happening in the world, keep in touch with the economic global journey, but tailor your business accordingly and keep positive. They have also told me that the average sale per customer has also gone down since they stopped training their team. Now, they are putting it down to the economy, maybe it is a factor, but the last thing I would be doing is stopping the training program. I accept the “old timers” should maintain standards of customer service, but eh new guys will be facing the customer with less skills and no understanding of your customer culture. According to research, in the situation it can take up to two years to lose a customer, but it only needs your competition to carry on training their team and that process could be speeded up. What Should you Stop doing? If the above business had told me it had stopped using “interruption” marketing in newspapers, radio, billboards etc to get brand new customers, then I could agree that was a logical decision. When the impulse spend shrinks, it gets a lot more expensive and difficult to attract a brand new customer. The conversion rate to get that new customer may not be cost effective. But, how many businesses will reduce the training budget and increase the interruption marketing. They plan to yell louder to an audience who is not listening. What Should you Start doing? The best marketing strategy you can invest in is permission marketing. Getting your existing customers to come in more often and to refer you to a friend. My local town has just launched a “Local Shop” Program. The retailers and Small service businesses in the Chamber of Commerce have combined forces to develop a loyalty club that crosses over all their customer bases. Shop Local vouchers from these businesses are downloaded from the group’s webpage. This keeps the costs down in developing the program. If you’re not investing in referral or permission marketing then the present economic climate is a time to start. You are marketing to somebody who knows you and like what you do. They are friendly to you and your business and want to see you weather the storm. The key is to ask them how they can help and how they would like to receive information from you. If you just bombard them without asking them, you are abusing the trust that has been built up between you and the consumer. It may be time to start up a focus group with your customers, it you haven’t already done so. What’s Your Action Plan? If you haven’t considered the following, I would encourage you to do so. Employ a mystery shopper organisation to ensure you are maintaining a high level of customer service. Increase the budget in effective team customer service training. Introduce an empowerment policy so that your team have the confidence and support to excel in customer service. Reduce your Interruption Marketing budget. Increase your referral marketing budget. Work on building the database of your existing customers. Introduce a “bring a friend” campaign with existing customers. Introduce surprise “customer perks” to keep customers coming back. Keep the team in the picture with the average sale per customer. Reward the team when they exceed set targets. Finally, don’t ignore what’s happening in the world, keep in touch with the economic global journey, but tailor your business accordingly and keep positive. Weathering the Storm Workshop Maintain market share and profits when the global news forecasts difficult times ahead for all businesses can be a daunting thought. The key is to change your retail thinking strategy, if you think the same way as you did last year; the chances are you will drown. This presentation includes: •  New marketing strategies for difficult times •  Ways to increase profits in a changes economy •  How to motivate the consumers to buy •  How to meet your consumers changed needs •  Marketing trends in 2009 •  How to inspire the consumer to buy Delegates will walk away with a tool kit on how they can grow their business. John Stanley is an internationally recognised conference speaker and retail consultant. He has authored several successful marketing and retail books including the best seller Just About Everything a Retail Manager Needs to Know. John’s retail experience covers hands-on retailing in supermarkets, hardware stores, garden centres, farmers markets and drug stores. For more information on John Stanley and how he can help your business prosper and grow, visit his website www.johnstanley.cc