Last week, both Seth Godin and I urged our readers to not use the current economic woes as an excuse to pull the covers up over our business heads and hide in fear. “When everyone else is being super-cautious, this is the time for business to move from good to great. When everyone else is pulling their heads in, poke yours out. Get noticed. Rise above the pack,” I wrote.
As others hunker down, we have an opportunity to stand out, to get noticed. As they hide, the marketing clatter lessens, making space for our messages to get through. Look, doing business is always a risk. Unless you are in Securities or Financial Services, this is no time to become extra conservative. Our clients and customers continue to want and need what we have. See this as an opportunity to reach out to them and offer them greater value than normal, immediately exceeding their expectations.
To current and former clients offer discounts. To new clients, throw in a freebie. Extend your guarantee. Do whatever is smart to grow your business. Although I normally never offer discounts, in times of fear doing so rewards your best customers. And that really is the point I want to hammer home.
Customers don’t want to talk to your products and services. I argue they don’t buy your products and services: They buy you. Show your human side. Understand their economic concerns and relate to them. Demonstrate that not only can you provide solutions, you also can provide extra value because you empathize with their concerns.
Remember, it always is about them, not us. Show your clients and customers you get it. Here are a few suggestions how:
* Send thank you notes to current customers and ask them how (or suggest how) you can help.
* Reach out to potential customers with value-added solutions.
* When you network, listen, ask if you can help and offer free advice.
* Treat every customer as if they are your only customer.
* Check up on former customers and clients to ask how they and their business are doing. Ask how you can help.
* Be sincere, giving, appreciative and positive. It isn’t about short-term profits but long-term relationships.
* Be human. Customers don’t want to do business with your product; they want to do business with you
What do you think? Am I nuts? Just plain wrong? What are you doing during these difficult economic times?
Lewis, Just 2 cents worth…
I like the idea of throwing in extra or freebies instead of discounts. I completely understand your POV on the discounting to your best customers but it could signal a bit of desperation.
Paul,
I hear you regarding discounts. That’s why the presentation of that discount needs to be carefully constructed. I suspect our best customers know us quite well, and mine will believe I offer the discount honestly, sincerely and because I care. I’m always throwing in a freebie, whether or not its time or advice without charge, etc.
Lewis,
I think you are right on. Now is the time to look beyond the traditional 4 P’s and onto to what I call Passion, People and Promises. I think that is the only to make it (in hard times or not).
Hey, Lewis. As I mentioned on my post today, I am concerned. I am practicing what you recommend, however, and marketing more. I am advising my clients and readers to do the same. But, the question is, what is in the short-term economic future? Is this period different than any other that preceded it?
Now is the time to add more value to the customer.
Bill,
Thanks.People, Passion and Promises Rock!
Elaine,
Perhaps it’s my age, but so far this period isn’t nearly as stressful as the decade between the late ’60s and ’70s. We were in a gruesome war (must more deadly and expensive than Iraq)and hyper-inflation.
To me, this economic crisis was brought on my stupidity and greed and is more a reflection of the market correcting itself. That’s why I question about government intervention. Will we make it better for simply the short-term and then have to go through another down cycle? Markets have been over-priced and over-extended with credit. In a free marketing, corrections along with pain happen.
Therefore, smart, strong and aggressive businesses survive and prosper. The scared and stupid might survive but the won’t prosper during this time.
Levin,
You are right. I would argue now (no matter when now happens) is always the right time to add value to customers. That’s how we differentiate ourselves in todays commoditization world.
Levon, sorry for the typo in your name.
“Now is the time to add more value to the customer.” Exactly, Levon. Couldn’t agree more. However, we tend to equate value with lower costs, but discounting is not the only way to deliver value. Far from it. Our customers perceive value if we as consultants offer them greater insights, actionable plans and sound, expert advice. Experience and results based on years of hard work in the trenches, earns respect. Results matter more than talk. That’s what business is looking for today.
Several studies show that continuing to adveryise during a recession pays off in terms of increased visibility and sales — if not for the immediate period, for sure over the long term.
I don’t have access to the studies now, as I’m in Savannah for the Jewish holoiday, but I’d be happy to send it when I’m back later this week.
I agree with all these comments if this turns out to be a short-term downturn. But with Congress rejecting the “bailout” today, are we heading down a very different path?
Of course, I hope it’ll all settle down like difficult times before. But, with the credit market shutdown, this may affect all business, which, in turn, affects marketing.
David, Shana Tovah!
Elaine,
Nothing changes in terms of running a business, unless you are dependent on credit to survive (and most businesses are not); are in the housing industry; or the financial industry. The market is correcting and it is painful.
Even with the bailout, problems remain because of the current crisis in those industries. We will watch our investments decline; they will come back at some point in the future.
David,
Good stuff!
Thanks for the great post and practical thoughts Lewis. I completely agree that the most successful will be those who recognize the present state of the economy for what it is and find ways to turn this reality into an opportunity.
Your post rang very true for me, as the startup that I work for (Simplaris) is concentrated on helping small businesses operate efficiently, grow and succeed regardless of economic conditions. Historically, when the economy is doing poorly and unemployment is high, more people turn to self-employment as an option, either to supplement their regular income, spouse’s income, retirement savings, or otherwise. Anyway, catering to micro/hobby businesses is just one example of carving a niche that recognizes the present reality. Thanks again.
Rob,
That’s what I’m talking about. Innovation. Creativity. Entrepreneurship.
TO ALL:
I don’t want to sound Pollyannish. The economy is experiencing a serious downturn. Difficult decisions need to be made. For example:
1. Credit is hard to obtain, which will hamper retail during a time when stores normally are setting in inventory for the holidays. Retail needs to find creative ways to finance that inventory.
2. A run on cash is causing banks to hurt and possibly go under because they can’t get credit for commercial paper. The FDIC, for example, should increase the cap above $100k to perhaps $250k.
3. Businesses that need credit to meet payroll might have to lay folks off or go under. Try flex time or asking people to job share. Be creative.
The credit crunch is serious. But responding to that fear by hiding is wrong-headed. As FDR said, “We have nothing to fear but fear itself.” Meaning, it was, and remains, fear that drives such things as a credit stoppage.
I believe those businesses that follow the example described by Rob by using creative thinking and innovation and actively work to grow their business are the ones most likely to succeed.
Some budgets might have to be cut. Some jobs might be lost. But keep the customer experience great, meet customer’s wants and needs, and continue to market your products and services aggressively.
What’s the alternative? Live life or die. Business is a risk. We knew that going in. We reduce the risk by being proactive, not by running away and hoping a downward market spiral doesn’t catch us.
Lewis,
Exactly. Although the overarching theme applies to businesses of all sizes, I truly believe that small businesses in particular have an edge right now. Capital is tight, and more and more companies need to evolve at lighting speed to succeed: http://www.mpdailyfix.com/2008/09/is_the_speed_of_decision_makin.html
However, big players typically require a tremendous amount of capital to make major shifts in their big bulky established enterprises. Plus, they’re likely in survival mode right now. On the other hand, savvy small businesses are more nimble. They can creatively innovative more rapidly with little to no capital, aggressively leverage low-cost marketing approaches (like social media), maintain strong personal relationships with customers and, in many cases, take larger risks (after all, if it doesn’t gain traction, you do something else). And, they’re better positioned to adopt some of the creative staffing strategies you discuss (I would add paying staff in stock on top of their salaries, particularly for start-ups) without being bogged down by unions and convoluted HR structures.
All advantages in the downturn.
Thanks for the praise, and I’m glad to hear you like what we’re up to.
P.S. We have a launch blog that you can subscribe to if anyone’s interested in staying in the loop on the development of Simplaris: http://launch.simplaris.com
Now is also the time for LAUGHTER.
You crack me up Lewis. Your sense of humor is so dry and so funny.
That first sentence is hilarious — “Last week, both Seth Godin and I urged our readers…”
Hubris humor from Lewis Green! Funny, funny, funny.
Very great article. Most of the current economic state is simply from FEAR and SPECULATION and nothing more, nothing less. If the rest of us can keep our cool to some extent, we may just save ourselves from going uner even more.
A great article. If you want to start a business, just do it. And leave the fear at the door. Alot of hard work ahead and be prepared for this if you want to be successful. These are the steps I follow everyday. I am still working on being successful. Just get up and do it….
I just finished working on the first draft of our holiday campaign. As I told my boss who’s been on the warpath over waaaaay past due receivables, “we’ve gotta forge ahead, feel the fear and do it anyway.”
That’s really all we can do. If we pack up our marbles and go home because of a little rain, the playground will be mighty crowded when the sun comes back out.
This whole bailout-rejection fiasco is politically motivated. Congress is stalling this measure as long as possible, just in the knick of time of the election. The whole gas price issue has run out of gas (sorry, folks) politically, so now this.
What bothers me about this is that the small businesses will suffer the most. Many of the customers I do business with for my full-time job, as well as my own consulting business are small. Everyone is concerned with the big businesses, which I know feed smaller businesses, but there has to be some protection for the mom-and-pop outfits that make up the majority of our country’s business base.
Bob,
I guess that was a bit of hubris. Frankly, I wanted folks to see what Seth said with a link but I guess I could have worded it better.
Nick & Carmen,
Words to live by.
Dawn,
I understand your concerns. They are legitimate.
The Golden Rule is always a good philosophy.
Though we’d just as soon do without them, times of hardship provide opportunities to anyone willing to do the extra work, to go the extra mile, to provide comfort for one’s fellow man.
Those who do it effectively will be rewarded. But the practice can only reliably endure for those who don’t do it for the material rewards they will receive.
Cam,
I totally agree. Business is about service to customers and our communities first and foremost. What are we as businesses (or as individuals) doing to serve others?
When I read Seth’s post last week, my first thought was the goalkeeper in soccer and hockey. When faced with an attacking opponent one on one, he (or she) does not take a step back. They step up, and cut the angle of attack for the opponent. They take charge of the situation and determine the outcome.
It takes commitment and courage and a willingness to mis-step but is better than the alternative of letting the opponent determine the outcome solely.
Dennis,
I love the metaphor. Right on target. Step up or lose.
To Elaine and Lewis,
Recessions are part of the business cycle. They are almost a force of nature. They are painful.
However, they are unavoidable. When the economy comes back it has engaged in a bit of Schumpeter’s creative destruction and resources are re-allocated. For example, when the dot- com bubble collapsed, resources were re-allocated to other productive uses.
What concerns me is when government distorts the whole process. The government encouraged bad lending practices and now they want to reward those who engaged in them (i.e., the bailout).
Yes, we have a crisis but is a trillion dollars thrown at those who are at the center of it really the solution?
I can think of a lot better ways to spend a trillion dollars or provide appropriate tax credits (okay, so they say 700 billion) but what’s a few billion between friends?
Of course, immediately FDIC insurance should be shored up to prevent a run on the banks. Of course, more liquidity needs to be injected into the market.
Elaine, fear has always been used as a scare tactic in politics. Don’t let them scare you.
Here is what an Economist has to say and I think he has it right:
http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview
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Lewis:
which is there is zero credit available at the moment.
One tiny detail missing from this, esp. Seth Godin saying “I’d start a new business today,” is where would he get the capital to get off the ground? And where would all the readers of mprofs who dont have budgetary control get their funds to do the things you suggest (which are all excellent btw)?
There is a reality to this crisis different than last time (I’m old enough also
Over the course of this summer I assisted a pitch for a client wanting a million-dollar website relaunch. By the time we “won” 2 months later, the client asked if the agency would do it and take payment END OF NEXT YEAR.
It is bad out there…
Kevin,
Not sure where Seth would get his capital to start a new business. Note, I didn’t suggest that as to your point, unless we have that captial borrowing more debt might be a bad idea.
However, my recommendations are easily applied, although we might have to move funds around, cutting some budgets while increasing others. What I fear is a cutting of all budgets.
Neil,
Good comments. I hope others chew on your food for thought.
Great post! One way to give importance on customers and giving quality work.