From SalesDog.com:
Recession-Proof Business Strategies
by Bob Bly
How do you compete in tough economic times? Read on for some practical advice.
The economy has a major impact on your ability to generate sales. In good times, it seems like customers line up at the door to buy your products or services. But when times are tough, landing new accounts requires considerably more time and effort. What can you do when customers cut back on their purchasing and deals get harder to come by? The following suggestions are especially useful for business owners, consultants, service providers, and others selling a product or service that might have a variable fee structure.
- Give a superior level of service to your clients and customers. When business is slow, do everything you can to hold onto your existing clients, your "bread-and-butter" accounts. The best way to hold onto clients is to please them. And the best way to please clients is to give them not their money's worth, but more than their money's worth. Now is the time to go the extra mile and give that bit of extra service that can mean the difference between dazzling the client and merely satisfying him. The best protection against a downturn in new business is an active list of happy, satisfied customers, who give you a steady stream of continuing sales that pay the rent and feed the family.
- Quote reasonable, affordable fees and prices in bid situations. If times are tough for you, they might be tough for others in your industry. Clients know this, and may seek to take advantage by sending jobs out for multiple bids, when previously they might have come only to you. In a recession, the cost of services or products becomes more of a factor than normal; customers and prospects become unusually price-sensitive.
The solution is to bid competitively, but reasonably. If you are high-priced to begin with, and you insist on getting top dollar, be prepared to lose out in some bidding situations. How should you price your products or services during a slow period or a down economy? Do not instantly lower your prices to rock bottom, as you may never be able to raise them again. Also, you do not necessarily have to reduce your prices, especially if your rate card or fee schedule presents a range of fees. Instead, bid toward the middle or lower end of your published fee range, rather than at the maximum. For example, if you list $5,000 to $8,000 for a particular service, quote a price of $5,000 or $6,000, not $8,000, to make sure you are not charging much more than other firms bidding on the job. During a recession you probably want to adjust your bids to be 15%- 20% lower than what you would normally charge in a healthy economy. This gives your prospects the break they are looking for, shows fairness on your part, but doesn't cost you much in the long run.
Never tell customers that the fee is a special reduced fee. Simply present it as your bid on the project. If customers sense you are cutting fees because you are losing assignments, they will take advantage, and try to force your prices even lower.
- Use low-cost "add-ons" to generate additional revenue. One way to generate some extra profitable business is to encourage customers to add to, or expand, existing assignments or purchases. For instance, if one of my copywriting clients is doing an ad on a new product, chances are he needs a press release also. I can upgrade the total project fee by offering to do both jobs for a package price. If my fee for the ad is $1,500, I may tell the client, "You also should send out a press release to all the publications in the field. I can write a press release while I do the ad for you; the additional cost is only $500."
Frequently the client will accept such a recommendation, and I get an assignment that is $2,000 instead of $1,500. It's easy to do the small add-on project, since it uses the same basic background information provided for the main assignment. This is an easy income-booster. Using this technique, you can increase the average dollar value of each project 10%-40% or more with virtually no extra sales effort. - Avoid being a prima donna. Face it: being busy, in demand, and having more work than you can handle is a great feeling. The tendency is to get a swelled head. My advice is: don't! When things are slow, it will come back to haunt you. Always, always act like a pro, like a helpful friend and consultant to your customers. Be useful, courteous, and accessible. If you give customers genuine reasons to like you and are always helpful to them, they will stick with you, and that can make a big difference when things get slow. Remember: in a depressed economy, continuous business from ongoing, current clients or customers is what keeps you afloat. Make sure you have that business when you need it tomorrow by acting professionally today.
- Postpone any planned fee increases. A soft economy is not the appropriate time to increase your fees or prices, even if you feel you deserve it and a raise is long overdue. Instead, defer any planned fee increase announcements until later, and keep your fees at current levels. Do not announce to your customers and prospects that you are "holding the line" on prices due to the recession and your desire to help them through it. Remember, even though you are feeling the effects of a soft economy, they may not be going through similar difficulties. Thus your announcement would clue them into the fact that you are in trouble, and some may take advantage of your perceived need for business by haggling with you on price.
- Downgrade slightly your acceptable client or customer profile. You have a set of written or mental guidelines that determine which clients are desirable to you, and which are not. During a business downturn, you may want to be more flexible in this area than usual. For instance, if you normally do business with Fortune 500 companies only, you may want to consider taking on assignments from smaller local firms, provided the pay is decent and their credit rating is good. Or, if you normally work only on large projects, you might consider knocking out some smaller ones to generate needed revenue.
This does not mean throwing your standards out the window and working for anyone who calls; far from it. Instead, simply readjust your acceptable client criteria during this temporary lull to accommodate a wider range of prospects and projects. How far should you take this? It's up to you. If, for example, you normally have a minimum project fee of $1,000, you might accept $500 assignments. But probably you should stick to your guns and not take on $100 assignments. - Plan an aggressive new-business marketing campaign. When things are slow, increase the percentage of your time spent on marketing and prospecting for new business. For instance, if you normally devote 10% of your time and energy to marketing and sales, you might increase this to 25% during slow periods. Take advantage of a lull in business to make an extra effort to attract clients or customers, follow up on leads, and close sales. To prevent a lull from happening in the first place, market consistently and aggressively all year long, every week, not just when you need the business. Planning an ongoing marketing campaign ensures a steady stream of new business leads. Marketing done today begins a selling cycle that will result in new business when you need it six months from now.
- Repackage your services to accommodate smaller clients and reduced budgets. When you are busy, there is a whole group of prospects you probably turn away without a second thought. These companies are too small (read: too under-budgeted) to afford your product or service. But when things are slow, it pays to look for ways to generate revenue from this normally-overlooked market segment. This is best done by repackaging your service or product line to accommodate smaller clients and reduced budgets. For instance, the client who cannot afford to pay you $5,000 to write his direct mail package can afford to pay you $400 to critique a package he writes himself. He can also afford to pay you $100 an hour for your consultation services, take your full-day direct mail seminar for $200, or buy your book for $25.
Freelancers, consultants, and other service providers can repackage their expertise and services in a variety of formats, including hourly consultations, critiques, telephone consultations, newsletters, special reports, booklets, audio tapes, instruction manuals, books, seminars, and more. Manufacturers and other product sellers can offer compact models, economy sizes, no-frills versions, special discounts, payment plans and smaller minimum orders. These alternatives may not provide as complete a solution as the deluxe package, but they give the smaller client the help he needs at the price he can afford. - Add value to your existing service. In a recession, customers in all areas are more concerned with price than ever before. However, their real concern is making sure they get the best value for their dollar. You can win new accounts and retain existing clients by enhancing your service and providing your clients with more value for their dollar. For instance, if you are selling a commodity item, you can add value by offering faster delivery than your competitors, or a larger selection, more colors, more options, easier payment terms, or a better guarantee. There is no need to give away the store by promising an excessive amount of extra service. However, a little extra effort or service on your part will be perceived by the client or customer as a significant increase in value.
- Keep busy with ancillary assignments or accounts. A slow period in your business is a good time to busy yourself with other projects, such as cleaning out your files, developing a new marketing strategy, making technical improvements to an existing product or service, auditing your customer support procedures, revising your standard proposal or sales letter, redesigning your slide presentation, or any of the hundred things that need doing, but never get done. Now you have the time, so do them! Do not waste the extra time moping. Instead, put it to good use by being productive.
- Stay positive. The most important thing about a slow period is not to be depressed by it. When you are depressed, prospects sense your desperation and fear, which has a negative effect on your dealings with them. Remember that everybody in business has slow times; those who say they never do are liars. You are talented and successful, and the lull is temporary. People will call you and buy from you again. Above all, do not despair, and do not give up too soon. If you follow the strategies outlined here, you can turn things around, and become busy and profitable once again.
Over 25 years of trial and error, Bob developed a method of selling that was both effective and comfortable for him. You can learn the secrets to his "zero-pressure" method to get more clients and increase your income even in these difficult times. Click here to learn more about Bob's Zero-Pressure Selling program. This is one of the smarter $39 investments you can make. Sphere: Related Content
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