Damian McKinney, CEO of McKinney Rogers, provides six insights into surviving the economic slowdown.
Recession-proofing a business is not merely a case of watching the bottom line. It reaches far deeper into the organisation as a whole to include not only business processes, but employees and customers. Leaders need to instil the ability to re-energise, re-think and re-focus the business, using realistic targets. Below are six points to think about in order to stay afloat during recession.
STAY FOCUSED
Staying focused is difficult when a recession seems to be looming, but nothing will damage your business more than short sightedness. Maintaining your focus on long-term goals and business objectives, even during troubled times, is vital to remaining successful. Many businesses will get bogged down in the present. You need to ensure every decision, improvement or cutback fits into the business strategy and benefits the organisation as a whole, not just now but in the future.
REMAIN CUSTOMER-FOCUSED
In a stagnating economy, retaining customers is as important – if not more so – than gaining new ones. It is essential for your business to remain customer-focused and not neglect their needs in this period. Not only is a high-quality product needed, but exceptional customer service is a must, particularly since clients expect more for their money when things are tight.
You must keep them happy in order to keep their business. Customer satisfaction surveys are a good way to ensure this takes place. They also provide a useful tool for further communication. The results of these surveys need to be used to refine your customer service strategy to ensure every step is client-focused and effective. Focusing on providing exemplary customer service is one of the best ways of adding value without costing money.
BELIEVE IN YOUR EMPLOYEES
Recession-proofing a business incorporates rebuilding confidence both externally and internally, by remaining positive and keeping the channels of communication open. Transparency is vital to getting organisational buy-in as a whole. The key is to be open and honest, empowering staff to help management to make the necessary next steps.
Your employees will be vital tools in your business armoury when the going gets tough. Making productivity a focal point and rewarding those who rise to the top accordingly will ensure you keep your most productive people during this time.
RESIST THE URGE TO SLASH PRICES
There is a temptation when recession is looming to cut prices in order to free up cash flow. This must be avoided. Whereas it is true that more units will be sold, profit margins will decrease and the overall brand image is likely to be diluted. Similarly, it is important to resist entering into a discount war with your competitors as this will not only dilute the brand image further, but could misshape your business strategy for an extended period of time.
Only offer discounts to current, repeat customers as this will promote loyalty while maintaining the values and image of the brand. If new customers are given discounts during a recession period, they may expect similar discounts in the future.
DIVERSIFY
When the economy is weak, diversification could well be the boost your business needs. The more services or offerings you can provide, the more clients you will be able to find. During this time, it is important to be innovative and think outside the box to create an edge over competitors. By repackaging your services and providing a ‘new’ offering, you will also be able to sell your company to a whole new client base. No matter what service your business provides, you should be able to develop ‘new’ offerings to attract potential clients who might have not seen you as an option in the past.
While your geographic location may be suffering during a recession, others might be thriving. Look into expanding your business in these areas. With the use of remote management, it is not essential to have someone ‘on the ground’ permanently. In addition, many clients are impressed with a company with an international presence. By exploiting these opportunities, you can overtake your less forward-thinking competitors.
INTENSIFY MARKETING
One of the most detrimental mistakes businesses make is to cut back their marketing activities during periods of economic slowdown. The reality is that your marketing needs to be more aggressive and comprehensive than ever. This can be kicked-off by contacting past clients to ‘touch base’. Many of them may have projects or assignments where your services, traditional or ‘new’, could be utilised.
A thorough evaluation of your current marketing strategy and methods will allow you to highlight what is working and what is wasting valuable revenue. Now is the time to make sure your marketing is cost-effective and efficient. You may want to set up a referral reward programme for clients, loyalty discounts or other extras as incentives.
Position yourself to be a market leader instead of an ‘also ran’. By stepping outside of your comfort zone and developing your own unique selling point (USP) you can set yourself apart from the competition. Prospective customers must have a good reason to do business with you over other companies.
Ensure the whole company is aware of your USP, which can be anything from the best prices, superior customer service or outstanding quality of products. With a good marketing campaign to exploit your USP, customers will be keen to know more about you and how they can benefit from working with you.
Above all, business leaders need to hold their nerve throughout and resist the natural temptation to re-engage in operational matters. Their role is to spend more time cultivating and inspiring confidence, especially among their staff, as they cannot go it alone.
