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Business_Axiom__2_ _Never_Hibernate_with_the_bears
| Business Axiom # 2 - Never Hibernate with the bears!
There is story about a successful business. It was a family
owned business and each year it grew and returned above average
profits to its owner. This continued for over 25 years. The
business became so successful that the employees prospered and
the owners were able to send their eldest child to an Ivy school
where he majored in business and received his MBA.
Once the son returned from college, his father was anxious to
have him join the business. His son, fresh with MBA in hand,
began to review the business. In short order he told his dad
that there is an impending recession. All the newspapers were
predicting rocky economic times ahead. The son noted that Wall
Street was preparing for a bearish market condition. However,
the son felt he knew what course of action to take.
For the past 30 years his dad worried little about such matters.
He made the best product and provided unparalleled service to
his customers and his business always flourished. But his son
protested and strongly recommended to his dad that cut backs
were the prudent thing to do under these uncertain economical
times. Further, the son pointed to many of his father's
competitors who already made cut backs in their business. The
father never went to college, so he assumed that his MBA
graduated son knew more about the economy. As his son suggested,
the father began to cut back on his normal business practices
and sure enough, as his son predicted, the business softened.
The softer the business became, the more the son recommended
that expenses be reduced and investment be eliminated. Although
this was contrary to the father's normal business practice, he
complied with his son's suggestion and sure enough, before long
the father went out of business.
In a time of uncertainty (when is it not some form of
uncertainty) it might be tempting to pull back. Under the guise
of ‘being prudent' senior managers begin to contract their
thinking. The organizational focus zeros in on plans to cut back
while finding logic in not investing. Advertisement, creative
marketing programs and seeking new business takes a back seat to
cost cutting. Putting off new product ideas or delaying product
introductions becomes appropriate behavior.
This thinking begins to pervade the organization. Soon everyone
is looking for ways to lower costs. People find ways to
rationalize cuts in customer service, or prudent (there is that
word again) ways to lower quality standards. Increasing
discounts, or lowering a bid to ‘get-the-job' becomes the
norm. Generally the organization begins to over-commit and
under-deliver.
Your organization may now be in a prudent mode, but missed an
opportunity to grow by taking market share from timid
competitors assuming the same ‘prudent' position.
This brings us to Global Marketing's 2nd business axiom:
Never hibernate with the bears Remember that economic black
clouds also hold silver linings. Opportunities always exist, but
you have to be looking. Companies that seek new business
potential and muster the courage to act gain a competitive
advantage and normally increase their market share as the
economic turn-around occurs.
In funky financial times the first cut is to the advertising
budget. Why? Because it appears to have no short-term business
impact, while providing immediate cost reduction. Unless your
company is in danger of going belly up, this is exactly the
wrong thing to do. This is dangerous short-term thinking!
Advertising during tough times holds tremendous value. It keeps
alive the connection between you and your customer. It let's
them know you're doing fine and still in business. Don't
under-estimate this point. Advertising at this time communicates
a powerful message. It says you are strong, in it for the
long-term and re-enforces the fact that they made a good choice.
Advertising during tough times also frightens competitors and
this gains you new business. Customers look for better deals and
don't seem fearful of moving to other companies that appear to
be stronger during uncertain times. Give a potential customer
the visibility of your company through advertising. Usually,
more individuals will see your ads because fewer people are
advertising during these times. Besides periodicals are more
than willing to reduce their rates during recessionary times --
some cutting them in half or more.
Don't take your foot off the investment pedal. It is tempting to
reduce your R&D budget, even a little to make things easier.
Don't fall into this trap. When you look at companies that
consistently grow, you'll find that they invest wisely in their
R&D programs during uncertain economic times. When times are
good they invest even more. New products are the lifeblood of
most organizations. Defining a need and filling it with your
technology is the best way to get through turbulent times and
set-the-stage for renewed growth in better times.
Move products to market faster. Develop a few "quickie" projects
that enhance or add to present products. Find ways to get these
products in the hands of your sales reps sooner than normal.
Remember that a sales person needs a reason to visit a customer.
It's even more important to give them that reason when times are
slow. More often than not, while he is introducing the new or
enhanced items, he will sell legacy products or get a line on a
new project.
It's always about the customer. Tragically, during rough
economic times, companies become in-ward looking and lose focus
on the customer. Companies begin to find ways to cut costs and
usually this means reduced service to the customer. The
financial people convince you that reducing the warranty will
help reduce corporate liability. You ask about all the sales
literature being used and decide a 10% cutback won't hurt you.
And so on. Reject these and any other idea that is a backward
step in customer service level.
Again, get creative. Many customer service ideas cost little and
mean much to the customer. Talk to your customer more during
turbulent times. Find out what their business is doing?
Determine how you can better service them. Find ways to make
their buying experience even better. When was the last time the
CEO or President of the company sent a letter to your customers
thanking them for their business? IT technology makes this too
easy not to make it a routine and something that can be inserted
quickly. Do you routinely survey your customers on your service,
product, quality level, etc.? If not, begin it today. IT can
help and e-mail makes it easier and cheaper than ever. One
caution on surveys - make sure you act on the feedback. Assign a
team of sales people to each customer. It's easier than it
sounds. The team should consist of an inside sales support
person, a technical person and a salesperson that leads the
team. Make it known to your customer that they have a special
team working for them. Proactively and timely communicate bad
news to your customer. If you can't meet the delivery you
quoted, let them know. Honesty is still the best policy.
Use technology and the Internet. It's accepted, pervasive, and
efficient to use. There are ways to inform without being
intrusive to your customer and potential customers. And the good
news it that it's inexpensive too. Create a weekly or bi-weekly
eNewsletter. Send out information on products or programs.
Revisit legacy products. There must be plenty to brag about.
Study the HP's, GE' and Emerson Electric's of this world and you
will find that these are well run companies that find ways to
take advantage of a soft economy. They seek opportunities. They
strengthen their market position by investing in new products
and service that better serve the customers. They hammer away at
timid competitors more easily taking market share from them.
But they never, never hibernate with the bears!
Global Marketing Inc., is a leading business, marketing and
sales consulting firm located in San Diego, CA. With more than
25 years of experience we have the programs, ideas and
assistance to help move your company to its next level of
performance.
Take action and call today for additional information on these
ideas or other ways in which Global Marketing can help enhance
your Sales and Marketing efforts.
More articles here:
http://members.cox.net/glmarketing/glmarketing
About the author:
Frank is President & CEO of Global Marketing, Inc. a leading
business, marketing and sales consulting firm located in San
Diego, CA. A compilation of Frank's most recent writings on
marketing and business trends can be found at
http://members.cox.net/glmarketing/glmarketing/index.htm
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