During a recession relationship is more important than ever, because it is relationships that will hold you, your customers and vendors together. Together, during a recession, you can increase market share easier than increasing profits. If you, your customers, and vendors survive and / or thrive during weak demand, you will rise together as demand increases, which it always does. Here is how you do this.
Recession Value Proposition
Adjust your value proposition to fit the new economic circumstances, and train all people who interact with customers to implant this in the minds of customers. For those of you who are in the B-to-B space, at some point in time your customer will be in a meeting with corporate leaders asking, "What vendors can you eliminate? How can we reduce our costs and be more appealing to our customers?" At that time you want the voice in the back of your customer's head to be saying that your company is a keeper for the reasons you have implanted. Likewise, if you sell to the consumer, you want the consumer thinking that your products will help them live better in this economy. The consumer advertising, packaging and PR should be positioning your brand as the answer. Your new value proposition should to targeted and ever present.
One of my B-to-B customers mission is to provide "Engineered Solutions" that improve the efficiency of their client's factories. They explain, "We will work with flexibility and expertise." They are making sure all their customers have this on the top of their minds. Another client, who sells to consumers, vision statement is: "Better Products ... Better Life." They are sure their advertising drives home how their products provide twice the value at lower prices. They are working on getting this message into the scripts of their customer service teams around the world. The most successful businesses during a recession implant their new value proposition at every contact with customers. This makes the relationship strong, and creates hesitation before a customer changes brands. That relationship will benefit all as the tide rises.
Extend Your Team Into The Market
Make it clear to your vendors and customers, that we are all in the same boat floating on a low tide of demand, and that we must work together for mutual success. Continuously reach out to customers to understand their changing needs and wants and make temporary deals with the customers and vendors that will carry all through changing economic dynamics. If your customer needs a price break, ask your vendors to reduce their prices. If they need to reduce their inventories, get your vendors to help you create just-in-time inventory programs. Find out what your customers and vendors need to help their business prosper, and have the flexibility to change your products or services to fit. Do not get stuck in business as usual. Business as usual will be a death sentence.
Build a community of strong relationships with your customers and vendors. Talk about your mutual missions and synchronize them so all can succeed during economic change. Make it clear to all that you and your company are committed to mutual success. Let them see and feel your commitment to mutual success.
Attack Weak Competitors
As your competitors fail to adapt to the changes in the wants and needs of the market place, their customers will be moving. Be sure they move to you. Conduct research to determine your competitor's weaknesses and focus on acquiring their customers, who will be frustrated with those weaknesses. If your value proposition is right, and being communicated in the market place at every point of contact, they will come to you. The most venerable competitors have the following weaknesses:
1. Overextended credit
2. Old technology
3. Cash flow problems
4. Poor customer service
5. Inability to adjust prices
6. Lack of flexibility
Once you understand the nature of the weaknesses of your competitors, select the three weakest and develop a strategy to acquire their customers. Position yourself as the life raft for the customers tied to a sinking ship. People in corporations tend to change at a slower rate than people in the market. Be ahead of the wave of change and find competitors who are not.
Business has always been driven by relationship and trust. During high demand it may not be as important because of the lack of supply for surging demand. During economic and social change when demand is falling, relationship and trust are even more important. If you have ridden the wave of demand, maximized your profits and weakened your relationships, it is past time to change, but never too late. Do not hesitate, find and communicate the correct value proposition for your business, extend your team to include customers and vendors, and rescue customers from the sinking ships of your competitors.