How Your Business Can Survive the Economic Collapse

Even though I knew our world was bloated and out of control. Even though I groaned every day when I saw the stock market rising into the stratosphere, and even though I wrote a book about marketing that pointed to the inevitable out come of our reckless spending; I never dreamt it would get this challenging. Who did? Yet here we are and I for one am energized by the challenge.

As a business owner I have lived through many recessions; and I have also endured an industry with shrinking demand. All challenges that we survived. When the good times came again we grew and flourished with a more realistic view of the world. However these good times have gone on for so long that many of us have gotten away from the basics. If you are under 40 this is a revelation. Doesn't feel fair does it? Well embrace it for the near future it is your life.

Now it is time to go back to the very ideas and strategies that built your businesses. As I say to the marketing staff at the various businesses we own; "pretend you were just hired by a new company that markets on Mars. You don't know the market place and need to find a way to attract the Martians to your business." Because the truth is we are on Mars and these consumers are ones we have never met before; not even me with my years of experience.

I believe the pendulum that Francis Fukeyama speaks about in his writing has swung in the entirely opposite position from the excess of our time. Now everyone is as frugal as Ben Franklin; even if they have the money to buy. How long can I survive without shopping in the boutiques on Rodeo Drive? Maybe forever. I just don't feel right bringing home another pair of shoes when so many in our society don't have the money to put a proper meal on their family's plates. Maybe this feeling will pass, but not soon. People say to me "if your not buying Lynda, who is?" Well read your mail as they say; very few. Yet people must buy sometimes, they must eat, and soon they will need a new lipstick, or dress to lift their spirits. However that dress may come from H&M instead of Saks.

The basic tenet of a successful brand is Value - it was before and it will always be. It is more important now to our Martian consumers than anything else you can tout. Go back to the intrinsic value in your brand and concentrate your advertising efforts on highlighting that value in the minds of your consumer.

What is your Unique Selling Proposition? What makes you different than your competitors? Wrap your advertising message around that USP and communicate it in a clear and concise manner.

Don't stop advertising. People will forget you, I promise. If you can afford broadcast, print and outdoor...you will be amazed at the savings. Renegotiate all your media buys, assuming money hasn't changed hands. You will get as much as 50 to 65% more for your dollars than you would have a few months before.

But if you can't advertise go back to basics. If you have a business website; make it stickier; redo the merchandising often and try new things until you hit the right homepage...then try and beat that. The most important audience drivers on the internet are paid search and key word optimization. Concentrate on those. They are very inexpensive compared to banner advertising.

At the point of sale, relook at your packaging; can you slap offers on your shrink wrap, can you entice through shelf strips and danglers - do what you can to speak directly to your consumers.

Do you have a relationship with the bloggers who report on your industry? If not start one. It isn't an overnight solution but it sure is a great grassroots one. You can find them on Technorati. Engage them in your plans and your product's virtue. They are the news media today.

And don't forget Public Relations. Tout the virtues of your brand to the media - editors are they are looking for ideas to spark up their content; help them out.

Take this opportunity to streamline your business of every extraneous activity. Get rid of the deadwood and rethink every plan that was made last year to execute now. Don't proceed with capital expenditures unless you are more sure of the potential outcome.

There will be opportunities abounding for those that survive this moment. There is an end; there always is. It may take 18 months or 3 years but we will get out of these bad times and we will start our economy up again. There are big lessons to be learned. I don't know about your experiences in life, but in mine, the worse the lesson the longer the recovery. When it is over those that ran on lean (not empty), those that went back to basics, those that listened to the marketplace like a good friend and responded, will have new opportunities to grow in a healthy way. Business is a marathon not a sprint. Welcome to reality those of you that have never seen a downturn. You will grow from this; you will become wiser I assure you. Good luck.

Comments

[Reez]

Right on. This is prime time to run your business on table scraps. This is when every dollar counts. Decisions should be precise and well thought out. Execution is key. For those who can stay in business during this recession there are good times ahead.

It is scary to see the economy turn so fast. Over consumption and irresponsible spending have caught up to America.

There is a cleansing upon us. Embrace and tighten your belts. Spend $$ wisely and don't forget about your consumer. You may not see them as often as you would like but non the less they are more important than ever. So entice them and listen to their needs.

For the start ups, this is the best time in the world to build your brand presence. Pick your spots wisely. Only put effort into initiatives that will connect you to your end consumer and align your brand with like brands. Plant seeds and watch them grow.

[KillTheMessenger]

Here is a simple recipe: offer twice the performance for half the price. That's what my company does and we live happily because our customers keep returning to us.

[sonoffestus]

Kill, you are right. It is a simple recipe. A great product, fair pricing (not the cheapest), added value and real service. Kind of the opposite of what the big 3 offer their customers. Though things have slowed down, we just picked up a new client today. One of our other clients suggested they call us. Guess, I'll have to send out a "Thank You" note.

[KillTheMessenger]

When I joined my current company I was kind of surprised about how they do it because it is counter-intuitive that one can be better and cheaper at the same time. But I did learn that actually serving the NEED of the customer rather than being flashy (none of our products is glamorous) gives us access to a rather dedicated base of customers who regularly come back. And when in doubt we treat the customer fairly. In every case that the product failed and there was no obvious abuse by the customer (which happens so rarely that we can be nice about it without losing money or sleep about it) we do the repair for free.

Being the absolute cheapest does not work, either, just like you said. We are aiming at delivering 100% functionality for 100% price. Neither our competitors who deliver 50% functionality for 50% of our price or those who do 125% for 200% of what we are charging are doing nearly as well. Sometimes we miss but more often than not we occupy the sweet spot where we make good money and the customer feels they are getting their money's worth. And that just feels good.

[SparXter]

I agree. It is difficult for the consumer to differentiate between the two types of abuse in the U.S. marketplace... Corporate abuse is well-known with countless illustrations like the automotive industry and so on. Mom 'n' Pop abuse is less visible, but nobody is paying employees enough to live a decently fed, sheltered, clothed life, and that fact is going to kill everybody. I am job-hunting right now, (anybody need a good writer?) and it seems like just about every job offers $10 per hour. Well, I can't live on $10 per hour, and certainly cannot afford to locate any charity toward the higher prices of Mom 'n' Pop.
Buh-bye, now!

[wulfsbane]

The way to economic recovery is not putting the onus on businesses. Its by changing the mindset of the consumer, and appealing to their sense of decency and fair play.

Small businesses did nothing to warrant the economic disaster, big businesses did. By trying to put small businesses out of business, by selling at or below cost, with loss leaders, and unfairly favorable pricing practices, the giants like Wal Mart, and Blockbuster have made this a third world country where everyone expects to pay wholesale, allowing no one to make a profit.

And then those people sit in their own empty stores wondering where everybody is. How can someone expect to make a profit at their business when they turn around and support a major chain, which hires children overseas for pennies a day to manufacturwe their product.

We have to start allowing people to make a profit in this country, so they can turn around and allow others to do the same.