Thriving in a Recession, by APRIL REEVES
In The Beginning
Recessions have a deep personal meaning to me. I’ve thrived during two nasty ones: 1980 and 2008, and want to share how that was possible, so that you may use some of these ideas to thrive as well.
In 1980, I was still freelancing for the big Ad Agencies in Vancouver. I was paying my ‘dues’ and learning everything I could. When the recession hit, I lost it all. However, I did know one truth: every Agency had a list of small accounts they were not that interested in. So I told my Dad I was going to start an office in downtown Vancouver, of which he replied, “It’s not something I would consider, but what’s the worst that will happen? Will you die?”
Of course I wouldn’t die, but the meaning behind the statement was that recessions can either bring out the very best in you, or the opposite. We all have a choice.
I rented a penthouse suite on Pender Street. Rent was suddenly cheap. I hired 2 employees. We never looked back: I went after every little account and got enough to thrive on. I chose to take on those clients that may not pay 10 million a year, but still afforded me a nice life and one other thing far more important (to me). The chance to prove this little Agency could turn small businesses on the ‘edge of existence’ into competitive models.
Adapt And Change
First thing we did (note: the team played a huge part in this) is to look at each client to see if they could adopt this same concept: go after the clients of businesses that closed shop. They’re not necessarily small businesses: big companies can fall too. They make a louder noise when they go but their customers are just as valuable. They’re also slow to change while small business can adapt quickly. Remember this.
Can you find and go after companies that may not be serviced properly? What can you add?
We took a look at the inside of their companies. One particular client was a moving company (movers thrive in slow economies) called MOVEX. They started the company because they had a truck and no job. Perfect excuse. I asked them to wear dark blue t-shirts with the logo; uniforms and hard-working men don’t mix, but some level of cohesive professionalism does.
Dissecting other business models is a great way to research your own potential.
We then repositioned Movex from residential to corporate movers. Their strength was in moving libraries, so many businesses used Movex for this reason. Their trucks were traveling billboards, so the name and phone number were visible within miles. Two years later, they bought land on Franklin St. in Vancouver and had a fleet of moving vans. All this in two years, from one truck and a bottle of whiskey. They’re still around (movex.ca).
How do you want your market to perceive your brand? Better yet, “who are you”? What part do you play in the wants (not necessarily needs) of your customer? These ‘easy’ questions are very difficult, and my suggestion is to find help answering this. This aspect of marketing is crucial at any time, but must be reconsidered during slow economies.
Changing And Adding
I often check out past clients to see how they progressed. Movex now has an auction and disposal service for unwanted furniture and equipment. They have specialty storage containers, as opposed to throwing a bunch of cardboard boxes at clients to fill. They pride themselves on adaptability and ingenuity. They know their strengths and capitalize on them.
Can you add additional services that create value? Is there a hole in the marketplace you can fill? What is your strength? Are your customers asking for additional services?
Ask them. Write it down. Sometimes research is very simple. Following it through is worthwhile.
Another client of mine was Hall Printing in Trail BC. Dave and Gail Chartres went from renting the basement of an old downtown building to buying their own on the main street in 11 months. They took their print products and branded them. One was an inexpensive black and white stationery package called “The Zebra Package” which became their bread and butter. We developed a strong radio and print campaign about these and took Hall Printing to the top.
Is there a way for you to brand products within your brand (sub-branding and brand extensions)? Will it add value?
We Live In The Age of Shattering Mega Corporations
Pay attention to trends: they will save you money and time. Currently, as of February 2015, an underground swell of resistance against mega corporations is on the upswing (especially in food). Consumers are looking to smaller local businesses where they vote with their wallets. Distrust is rampant. Good.
Recessions are game changers. I’ve come to know over the years, that most businesses don’t listen to the current market or understand their customers and therefore fail. During a recession, this statistic amplifies.
Are you servicing your client according to their wants (not yours)? Find out why it is that customers pass up big box stores, and fill in the gap. Emphasize the value your business gives. Make small businesses the first choice for customers.
Get ‘involved’ with small business groups; don’t just show up. Work with those that align with your views. Many people complain that small business groups are inconsistent and scattered. Believe me, many large corporations are the same. People are people, but you will do yourself a favor by being part of a bigger picture than becoming the lone wolf. Especially in recessions.
How Well Do You Know Your Customer?
While each business must have a good handle on the individuality (psychographic) of their customer, there are general similarities. First, realize that during a recession, people are reconsidering their purchasing power and what they can leave behind. Does your product/service fall into the categories of luxury? Do you have the population to support luxury services/products?
Your customer is looking for people/companies that share their values and what they stand for. Can you make their life easier? They’re not always looking for cheaper. .
Watch what your competition is doing; are they pulling back, serving customers less? This is an opportunity. For every stride your competitor takes backward, push forward. Show your customer the recession has no effect on you. People love to support strong ethical companies. Be one.
A consumer may have taken risks during boom times, and turn conservative through the bust. Know thy consumer! Many will stay loyal because they want to. They patronize what they trust. Don’t miss the opportunity to solidify customer relationships while others are cutting theirs.
Be warned about consumers in a recession: they’ll become immune to false claims and remember poor service even more so. Treat them poorly once and they’re gone.
Hold The Line
Recessions are the worst time to cut all budgets: look at which expenditures add the least value. Marketing and advertising is the time to increase your share of this budget. When everyone else pulls back, burst forward. This is what sophisticated marketers do. There are many ways to capitalize on less expensive social media, but if you are not savvy with that, either find someone that is or learn it. Revisit all your marketing materials and ask if they still serve your message. Don’t leave innovation behind.
This is also the time many companies shut branches down. Big mistake: you’re now making it harder for customers to buy from you. Can you add virtual outlets? Become more accessible and let everyone know.
Get familiar with taking and reading statistics, especially your own.
A Short Thought On Employees
Most business owners have no idea who’s working for them. You’d be surprised. There’s talent out there, waiting to make its mark on your time. Use your staff; ask them questions you may not think they can answer. Front line employees know exactly who your customer is, but you need to support them, listen and be there for them to get your investment back.
One of the most foolish oversights in need of a major overhaul is wages. After owning seven offices, and two food stores, I can tell you that higher wages are always a better return on investment. A living wage employee is far more likely to go the extra mile, and they’re likely to have a hidden career you don’t know about. I’ve proven it over and over again. You can hire 3 for $10/hour, or one great person for $18. I paid living wages, gave them ownership in their positions and was able to walk away and teach college for a year while they made money. If you can’t do that in your business, ask yourself why.
While social media, when done correctly, can be a powerful tool, so can conventional methods such as print. Bag stuffers; small sheets dropped into every customer bag can boast of new products, services, give discounts on the next shop, and emphasize value. They are cheap and people see them.
Radio and newsprint work for some businesses in recessions, but this is where you need a skilled person to help. Don’t let the radio and print reps write your copy and produce your ads. They’ll just blend with the rest. A skilled professional will be able to help you pick times for your radio ads, and page locations for print. It’s a science, and it works: I’ve seen and heard campaigns that killed business.
In most recessions, radio and print is the first to be pulled from budgets, meaning there are fewer commercials on the air and in papers, and you can bargain for better pricing.
If you are skilled in online media, ramp it up. Otherwise, pay an expert with a track record of success. If you have to cut radio and print from your budget, get web savvy and move the leftover ad budget to powerful online campaigns.
Move Forward With Confidence
This is the time for you to become tactical. You have to matter to your customers and remain competitive.
No business should adopt the slogan “business as usual” in any boom or bust. Trends change, people change, the planet is changing. You must listen and change with it. The basic drivers behind purchasing are value and quality, and these are amplified in down times. Don’t forget this in the good times. You may not have the chance to get it back.
Recessions get me all giddy and crazy with inspiration. They’re one huge opportunity for greatness. Money is only a means. It’s the creative process of business people that turn economies around.
April is a featured S4B Mentor and Speaker – Contact 403-348-0102 if interested in booking April