A wise old friend of mine, Ron, believes that there are only three options for most businesses. You can grow, you can hold steady and coast, or you can decline. Two out of three are a losing battle, because you can only coast down hill.
At the group of radio stations I work, we pruned our staff in order to balance our income and outgo, but we did that nearly two years ago. And it worked. Now that we are in the midst of an economic upheaval that we have not seen in years, you may be faced with three choices too.
Barry Labov, of Labov & Beyond wrote the following last week for his companies blog:
From Order-Taking to Order-Making: Choosing Survival, Denial or Revival in this (and any) Recession
[Ed. Note: Enjoy this enlightening and thought-provoking guest post from our president and CEO, Barry LaBov.]
Oh no, you’re saying to yourself. Another thinly veiled attempt to put a positive spin on our current financial crisis.
But keep reading; this post is anything but. What it is, instead, is a way to encourage you to see times of financial turmoil as an opportunity. A way of proactively bringing ideas and solutions to your clients and customers. A way of moving from order-taking to order-making.
As a business, our niche is that we create strategic marketing, training and sales opportunities for corporations that sell through those channels. From our research with those dealers, distributors and sales reps, there are three approaches we’re seeing in this recession:
1) Lay low. Concede that this is a bad time, reduce your efforts, openly discuss that things will be bad and lower the expectations of your corporation/dealership/sales staff/self.
2) Business as usual. Continue (for as long as possible) to maintain the same expectations and efforts as you did a year ago. Hope that the same effort and output you gave during good times will get you through these tough times.
3) Order-Making. Be more aggressive; expect more of yourself and your people. Reach out to customers (instead of waiting for them to appear) and actually bring unsolicited ideas and solutions to your prospect and customer base.
Right now, if your industry is down 40 percent in sales, for example, that means 60 percent of the customers are still buying. If you take approach No. 1 (Lay low), your market share will decrease dramatically. Companies that adopt approach No. 2 (Business as usual) will, at best, lose business as they keep pace with their market share—but, they will suffer because they will have to discount pricing aggressively because their salespeople will be waiting for sales to come to them (just like they did a year ago).
If you want to thrive instead of merely survive, the only viable answer is approach No. 3 (Order-Making), because you will be taking a larger share of market from the competition. And, if order-making is done correctly, you will be creating new markets, new prospects and new opportunities. This will also help engage your staff, which is critical in a recession.
Go to a store during boom times, and you’ll likely see a number of customers and few salespeople scurrying about to serve those customers, in most cases to take those customers’ orders. Now, go back to that same store today (I just did). You’ll probably see fewer customers and maybe fewer salespeople. Common sense says that the salespeople will be more attentive, more enthusiastic, more hungry. The sad truth, however, is that’s probably not what you’ll see. The salespeople will be less attentive; the few customers that come in will wander around alone, and many will leave without buying or even having the chance to talk to a salesperson. The salespeople will go home that night and tell their families that “no one came in the store today.”
You could say it’s a training issue. And it is. But it’s also a matter of understanding there are different needs in a recession, which means there are different types of training and different incentives that are needed to help meet those needs. Same old, same old will not work.
Is there hope? Yes. Consider this: There were more millionaires created during the Great Depression than at any other time in history. There were also many, many people who went hungry. My father told me many times how his family went hungry in the 1930s. My mother, on the other hand, told me many times how her father created a business that was recession-proof and thrived during the same period. That also explains why my two grandfathers, while respecting each other, never really connected. Two completely different mindsets.
During tough times like these, it’s common for companies to be told that they need to advertise even more than ever. But it’s more than just that. It’s about being more aggressive overall. It’s about showing more initiative, demanding more engagement, making tougher decisions and being willing to show vulnerability. Simply spending more on advertising won’t be your silver bullet. An overall approach that is more aggressive can certainly make a difference.
There will be much change in this recession. Many businesses may fail, citing the historically tough times we face. But there is the opportunity for many businesses to thrive, too. There will be new ideas and breakthroughs that will take place because people will be willing to be vulnerable, to be hungry and to do the very things that were in the back of their minds for the last year or so.
This is not the time to give up, put your head down or prepare your speech as to why your business is failing.
This is the time to face reality; to be lean but hungry. To be better-trained than ever, to ask and reward more than previously and to be grateful for the good people, good customers and good opportunities that we’ve been given.
Somewhere, 60-80 percent of all the sales and business that was going on prior to our current economic hard times are still going to happen. Are you going to make this the most exciting time ever—or are you going to endure it, simply hoping to survive?
You have the answer.
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