Back to Marketing Basics
Times are Tough so it's Back to Basics!
All the signs are there for some potentially tough times ahead for all those in business in Australia.
Slowing consumer demand and lower discretionary spending as power prices and childcare demolish family budgets.
Pay raises that have become non-existent for all but the ridiculously over remunerated high flyers. Mortgage commitments on the family home or high rent are keeping both partners working to stay solvent.
Lack of spare family money has dramatic effects that flow through the whole of the Australian economy, affecting businesses not even remotely connected to consumer sales.
The Government’s action, to “support” business, by tax reductions, ignores the fact that you have to turn a profit first before you have a profit to tax. That means customers with money to buy stuff!
The concept of “trickle-down” spending by the rich benefitting all has failed, but still seems to be embraced by Governments.
What’s really needed is “flow-up” as poorer people have a higher propensity to spend than rich folk.
That’s Capitalism for you! Like it or not most business people have Buckley’s chance of a handout or soft landing and have to take their chances with market forces and sink or swim based on their decisions.
So - What can you do as a business owner or manager?
Jack up your marketing and promotions
It’s a fact that the vast majority of small to mid-sized businesses do next to nothing in the way of marketing and promotional activity.
They rely on their old faithful customers coming back for more, make token efforts to recruit more new customers and hope that sales and profits will improve next year.
Successful businesses by contrast expect change and shape their plans to either take advantage of it or to at least minimise the damage that might result.
The 10 Commandments for Marketing
1. Know your customers
Your current customers are the only source of your business’s income.
Now ask yourself how well you know your customers and their needs and how well you communicate with them.
Some simple market research using a telephone survey works extremely well.
I do it for clients all the time and invariably find out things that they were not aware of and opportunities they had not considered. I have even developed a standard research questionnaire that can be adapted to any business.
So contact me if you would like a FREE Copy
I am continually astounded to find how many businesses do not have an up to date customer database with contact names, addresses, phone numbers and email addresses.
A contact database is ESSENTIAL,
Start assembling one right away or start getting the one you have, up to date with full and correct information.
If you are not already doing it start regular E-Newsletter communication with your customers. Simple things like new products, special offers, stock clearance sales, useful product and industry information are appreciated.
Often your own customers may not be aware of all the products and services you provide unless you tell them.
Also they may have lost your contact details and started buying from your competitors.
Monitor Customer Purchases
How long would it take you to realise that a customer was no longer buying from you and what would you do about it?
I am doing a survey for a client at the moment and found that one of the customers in their top 20 had switched suppliers and had not purchased anything for nearly twelve months.
When I talked to them they told me that no one had even phoned them to ask why, or they suspect even noticed.
At the very least you should keep a monthly check on the top 20% of your customers which usually represent around 80% of your sales.
2. Know your market
In difficult times opportunities arise that are simply not there when things are going well. Competitors can get into trouble and their businesses can become available to buy, at a fraction of the price you would pay in good times. So keep in touch with what is happening using trade associations, asking suppliers and their representatives about the market and your competitors.
3. Advertise More
The first thing most businesses do when times are tough is to reduce spending on advertising and promotion. By going the other way and increasing your level of advertising, communication and visibility you can pick up the new customers currently looking for a supplier that the others then miss. If you are not using Google AdWords to attract prospects, you should be! And you could throw in a bit of social media too with a business face book site.
4. Reduce Costs
What things are you spending your businesses money on that don’t provide a measurable return on investment? It may be time to cut out some advertising media that don’t shape up and boost those that do. It is all a matter of measuring / monitoring the results. Include sales staff in the calculation. Are they producing “extra” sales for their $60K plus, per year, or could you do better with a promotional program?
5. Outsource Labour & Retain Core Competence
It always amazes me that some business owners and managers will waste days and weeks trying to design promotional material like leaflets and advertising programs, really badly when the professionals can do it in a fraction of the time.
I have a client who insisted on doing their own e-newsletter in-house. A process that took nearly a month for a very basic result, when I normally get others designed and sent out, for a few hundred dollars, in days. And they are personalised colourful and easy to open!
So stick to your own core competence – Running Your Business – and employ experts to do the things you are not so good at.
The logical things to outsource are:
6. Reduce Stock Holding
Unless you have a policy of keeping stock under control it will blow out! That can be a lot of money tied up and costing you interest rather than producing profits. Maybe you could make arrangements with suppliers for just in time supply and trade that off with them through immediate payment and long term contracts.
7. Keep a Firm Hand on Cash flow
In tight markets you can easily find account customers taking longer to pay up. This puts your business at risk if they fold up and if that happens, your chances of getting anything at all are minimal.
I suggest you close accounts that do not support your business fully or which are too small to be economic. Then make sure you keep on top of any slow payers with reminder letters and phone calls.
8. Monitor Competitors
Make a list of your competitors and collect on-going information about them.
Supplier’s representatives, customers and trade associations are all sources of information.
Remember that “Knowing your enemy” is the first rule in the art of war in business.
9. Website Update or Create
Customers and potential customers are all now shopping and searching for information in cyberspace, on the internet, so it makes sense to have a website presence for them to visit while they are there.
And since it is more likely they will visit your website and become customers without ever visiting your office or factory, it is worth making sure it projects the image you want them to see.
It is also worth spending money on search engine enhancement and on Google Ad.Words to make sure that prospects searching for the things that you sell will find your website.
10. Exit Strategy
Finally, it is sometimes time for you to call it a day and to get out of your business with the maximum benefits you can gain.
The tough times are not the ideal time to bail out but may force your decision.
Either way it is smart to develop a business exit strategy which positions your business for easy sale to the largest number of prospective buyers.
This is in part working on the business structure and property portfolio and also in part working on the administration and marketing strategy so that the business is well positioned for sale at the right price.
I can help on this or can email you a copy of my article on the subject. Contact me
There is little doubt that many Australian businesses are going to go through a rough patch.
You can choose to be in one of three groups.
You could be part of the elite group that “Makes things happen!”
One of the group that “Watches them happen!” or
You could do nothing and end up with the majority who simply “Wonder what happened!”
Either way, good marketing and business practice will help you to not only survive but thrive!
Invest in yourself and your business.
Change, whether positive or negative, always creates opportunities for those alert to them and with watertight well run business.