Strategies for tough times
Tough times for all? Not according to the business owner I spoke to in early April. He told me, “If this is what it’s like in a recession, bring on a depression.” So, why are some businesses floundering while others are thriving?
I’m talking about businesses in the same industries, in the same towns and sharing the same customer base. Could it be that some were just a little better prepared and/or kept doing the right things instead of retreating when things got tight?
If you’ve read my articles over the last six months you realize I stress the basics. Things like research, planning and consistent follow-up. If you don’t know your customers and their preferences, how can you get them what they want? You can’t stock just what you like; you have to stock what they like.
I had lunch with a marketing consultant last week. He commented that the task least done by companies is research. Not enough companies do the work to determine who their customers are, what they really want, why they buy, what will cause them to buy more, etc. Not surprising and it’s a big reason why some companies can’t improve.
You can plan for a picnic under warm, sunny skies but if it rains and you don’t have a canopy or other protection your day is washed out. If you don’t have the proper research on your customers, how can you plan to maximize sales?
Now is the time to be in your customers’ face. That means do any and everything you can possibly afford to do (time and money) to have your name and special offer in front of them. There are numerous books on free, cheap, guerilla and word-of-mouth marketing. Check with your favorite bookseller.
For starters, if advertising worked in the past it should work now. Your customers are reading, watching and listening to the same media they were before. Perhaps your message needs to be better focused, or, as you’ll see below, perhaps you need an enhanced offer to reach them.
This comes back to research. Do you know what advertising works and why? If you don’t, don’t feel bad. One of the old adages in the industry is, “We know that half our advertising works, we just don’t know which half.”
For the small business this may not be good enough. You don’t have the money to spend on image advertising. This is why direct response ads are popular with merchants and other small firms. Coupons, special offers and “mention this ad” let you know the results.
This means test different things. And when you test, be careful to only test one thing at a time. Don’t change the offer, the vehicle and the layout at the same time. Change the headline with the same offer or keep the headline with a different offer. Try the same offer in different publications. Above all, find out who the audience is that your reaching. No sense advertising men’s suits on a radio station where 90% of the listeners are under age 25. Don’t forget that one ad isn’t a valid test. It takes numerous impressions before messages sink in. That’s why companies that are consistent in their marketing are [more] consistent in their sales.
If you’re a small business owner you can’t afford to have employees handle all of your customers, key relationships and important sales. One of the key things you can do is make your customers feel important by meeting with them, helping them or telling them how important their business means to you.
There is something about “the big cheese” taking the time to provide customer service or just to say hi. The owner of the garage I take our cars to always makes it a point to say hello, even if sees me out of the corner of his eye while doing something else. He always tells me how they appreciate our continued patronage. Many times he’s checked out potential problems or inspected cars we were purchasing for no charge. Do you think this reinforces our feelings to keep going there? You bet it does. It’s nice to be treated as a person (i.e. respected customer) instead of a number or someone to up-sell any and everything.
It doesn’t matter what you sell or to whom you sell. Take the time to give that little extra special treatment. Time to close a big sale? Go with your salesperson, meet the customer and make them feel valuable. A new customer comes in your store? Introduce yourself and tell him or her how happy you are they came in. You see a regular customer? Give him or her that little extra thank you for their loyalty.
Now, for all of you who have continued advertising and marketing, you know your customers, have a plan and do all the little things but still are seeing struggling sales. Consider making special offers. Part of the process is knowing how many people will return to your business after their first purchase. This lets you know what kind of offer you can make to generate a new customer.
For example, the local printer knows that for every small job they get, one out of four will become regular customers spending $1,000 per year for five years. Now he can factor into his special offer for first time customers knowing that every four people who take advantage of this offer will spend an additional $5,000. This means the special offer can be much “better” than if only one of 100 remain as ongoing customers.
Or, make an unprecedented offer on a slow moving product. The Mariner’s offer special family ticket prices on Monday nights. Why? Monday nights are their slowest night of the week.
At the same time, don’t forget your regular customers. That’s why small espresso stands, taco shops and others offer punch cards. Buy 10 and get one free, etc. One thing I hear regularly is “Why do they make that offer to new customers and not me [who has done business with them for years]?” It costs a lot to replace the loyal customer who doesn’t feel wanted or appreciated. In fact, according to studies, it costs six to 10 times more to get a new customer than to do more business with an existing customer.
The bottom line is to keep doing all the things you know you should be doing. Make your offers pointed and based on research. Above all, get involved with your customers, both new and existing.