Lessons Learnt From The Downturn
The economic crisis was a wake-up call in that being in a comfortable position either psychologically or competitively in business leads to eventual and in some cases rapid decline in sales if marketing, messaging and operations are left to trundle along.
Companies that spared little time or thought for marketing and brand strategy and how they relate to operational strategy over the last 5 years because they had a seemingly endless backlog of work streaming through the door, are now wondering how long those doors will remain open.
Let it be a lesson that complacency in the good times will lead to greater stress and much longer recovery times when things go south. Here are 10 areas that you should pay attention to ...
Brands and divisions will consolidate for financial and marketing reasons. The past 10 years has seen many brand extensions and sub-brands launched as companies reached into niche markets. The cash injections and budgets required to sustain this kind of activity will continue to be reigned in and focused on primary markets and core activities.
There’s nothing wrong with calculated risk, if it didn’t occur nothing would grow, however with shareholders chomping at the bit to claw back profit margins, these ventures will be killed off or at least put to one side to focus on core revenue drivers. You need to be in tune with this before you launch any kind of new marketing initiative this year. Decision makers (economic buyers) will be looking for people that are on the same wave length and aware that their focus is on strengthening and maintaining bottom line growth, so there’s no room nor time for speculation or triviality.
You need to be in tune with this before you launch any kind of new marketing initiative this year. Decision makers (economic buyers) will be looking for people that are on the same wave length and aware that their focus is on strengthening and maintaining bottom line growth, so there’s no room nor time for speculation or triviality.
The lesson: Sharpen your message, dig deep to find your true value and difference and keep a watchful eye on the perceptions you’re building.
2. No Room for Waste
Marketing must have zero fluff. This means removing the superfluous and getting back to basics. Even though the economy is picking up, people have toughened up. This doesn’t mean they’ve stopped spending, it simply means they're harsher critics. Clients will not be in the mood for "feel good" options, they just want good old fashioned value for money. This will either work for you one of two ways, you'll be forced to maintain or drop your price to match your perceived value, or you can increase your prices that are commensurate with the high perceived value that your client receives. Often this is a case of message management.
The lesson: Review your communications and operations and fix or remove anything that will contradict your unique value.
3. Competition & Value
Your competition has increased regardless of the industry you’re in. You compete with budget cuts, time, investment in equipment, family holidays and psychological barriers exacerbated by negative media to name a few. The money is still there, however the priorities for its allocation have shifted.
The lesson: It's not what you sell, it's how you sell it.
4. Keeping Quality & Pace Economic
buyers are looking for both excellence and speed. In the good times companies may have been excused for late delivery because competitors were also tied up or busy. So it comes as no shock that buyers will continue to demand superior outcomes, delivered within agreed timeframes.
The lesson: Eighty percent of success is showing up. -Woody Allen
5. You Will Be Tested
Just because your industry works in a particular way and has done since the first amoeba crawled from the sea, there’s no excuse for striving to find better ways of working. Don’t become complacent, ask yourself the hard questions and improve both your offering and your operations for the betterment of your client.
Think about your own attitudes recently when you’ve been told “I’m not sure we can do that”, or “we don’t usually do it that way”, or worse “there’s no way we could do that”... If you’re reaction has been to think 'based on the current climate you’d think they’d try a bit harder?', then spare a thought for your clients.
Look at your own operations and find the holes. Are you giving your team the capacity to think on their feet and problem solve? This is a perfect example of where you can control your brand and your audience’s perception of you.
The lesson: True brands are created at ground level operations, not through superficial media. Ensure every facet of your business that is in contact with your client reflects your desired brand positioning. This means providing leadership and guidance to delivery drivers, receptionists and after hours support staff - treat them with the respect your clients deserve.
6. Under Promise, Over Deliver
This term should be removed from the organisational mantra. You need to ensure that your messaging accurately portrays what the delivered outcome will look like. Hiding any element of this inadvertently or on purpose to provide an element of surprise is highly risky.
Some organisations do this unintentionally by not balancing sales process and messaging strategy. If customers are saying they’re surprised at how good you are, then how many people are not taking that perceived ‘risk’ by not buying your products and services? The lesson: Stand behind the products you sell, but don’t hide.
7. The Relationship Economy - Give me ideas, Not branded stubby coolers
If people aren’t buying, it’s seldom that there’s no money, they’ve usually just decided to not spend it with you. Familiarity can lead to contempt if there's low perceived value. Long-term accounts and customers are high risk. If you happen to lose a long term client relationship, learn from it and move on as you’ve probably dropped the ball somewhere.
Be aware that solid relationships are built on trust and value, (give and take) not on impersonal or lightweight marketing. Put yourself in your clients shoes and work toward building a deeper understanding of what their challenges are and what you're going to do to help. You need to offer value in the form of ideas, different ways of working, presenting alternatives and questioning their assumptions. Start immediately by asking what your clients' challenges for the next 12 months are likely to be?
The lesson: Complacency or silence will aid in your demise so forget about your preferred supplier status and think about how you can be seen as the "go-to" company.
8. The Web & Trust
One thing I’m thankful for is that the economic crisis has made people question the effectiveness of their web strategy. The underlying premise that must guide your web strategy is; If you choose to build a website, you do so at the convenience of your clients, not yourself.
E-commerce functionality needs to be tightened for both small and large enterprise. If you want to increase web generated revenue, keep the process painless. There’s no excuse for not finding ways to make your processes and functionality simple and stress-free.
Work from your customers shoes and reverse engineer your functionality. Is a 9 step process to purchase an item worth $10 going to encourage repeat business? Is asking for your customer's mother’s maiden name to receive a free white paper a waste of their time? If your current developer is trying to lock you into using a particular system that you think is cumbersome, find another developer.
Choose web systems based on the outcomes you need (sales, sign-ups, enquiries), and not on how many bells and whistles are attached to it. The web is all about speed and convenience, and as I said before, not yours, your customer’s. If this means that having a seamless and efficient e-commerce system requires you to adjust your operations or invest in faster product delivery, then that’s the price of doing business online.
Further to my ITD Principle™, to break down the hurdles for e- commerce of any kind is; Interest > Trust > Technology > Trust > Delivery. (ITTTD) That’s not a typo, perception is reality. Trust must be gained before and after a transaction. Some e-commerce systems can appear to run separately from a company website, whereby a customer can perceive they’re transacting with an entity separate from the business they thought they were dealing with.
Or worse, when they click submit, it takes you straight back to a homepage without a receipt or notification assuring the customer that their order has been safely received. So if you’ve managed to gain their trust and they've entered personal and financial details, it’s what they see AFTER they’ve clicked the submit button that will determine whether they’ll come back. Many people will only use a system once if trust hasn’t been maintained throughout a transaction.
The lesson: There’s nothing wrong with conformity on the web. Many people use and are familiar with websites like eBay, Amazon and Qantas. Build trust by emulating common processes. Reinventing the wheel in this environment can raise suspicion and repel.
Not long after it announced a major restructuring of its operations, Kodak filed for bankruptcy protection in the US. In the mid 1990’s Kodak’s shares topped $80.00 US, however by ignoring changes in market demands, in particular the massive rise of digital media coupled with a stubbornness to continue leading as a ‘film specialist’, may consign the brand to history.
The lesson: Just because you’re good at something, doesn’t mean you should keep doing it. Creating demand for new products, new services and new technology is a lot different to trying to maintain or reignite interest in old ones. It will be too little, too late if you decide at the 11th hour to change course.
Innovate and pursue new ways of working, new products, new approaches, find new markets and be willing to fail and learn as you go.
Do you know what your brand/market tolerances are? What is your brand’s capacity to endure poor service delivery, new competition, product failures, recalls, increased commodity prices or legislative changes without damaging your long-term growth and subsequent brand value?
Knowing what your tolerances are means you understand your competition, your customers (the competitive landscape) and are continually engaging in activities that positively uphold and build a desirable market perception.
The lesson: Keep marketing when things are quiet and when the media is forecasting doom. Lose momentum and you also risk losing market share.
© Hamish Chadwick