In This Issue
- Don't retreat in tough times
- Brand management is vital
- Knowledge is power
- Can we help?
A trap that many business owners fall into when times are tough is to go defensive, cut all spending, lie low and hope for the best.
There's a difference between being cautious and being ineffectual. You cannot afford to drop off the consumer radar, because when business comes back, you'll get lost in the promotional noise.
First, you need to continue your networking and building strong customer relationships. You need to be visible and proactive in the marketplace. If you're not communicating with your existing and potential customers, somebody else might be. Keep the communication lines open by focusing on low-level marketing activities aimed at servicing, up-selling or cross-selling to existing customers.
Customer retention is your number one requirement, because if you look after your customers well, then they will look after you and they'll recommend you to other people.
Next - value your staff. Good staff are invaluable when times are tough and the competition even tougher. You need them now and you will need them even more when growth returns. Don't forget how hard it was finding skilled staff and how much you've invested in them. The commitment of your staff and their ability to value-add your business is what keeps you competitive.
It is also important to remember that when the economy improves, Australia will still face a skills shortage and an ageing population. Manufacturing Skills Queensland predicts that over the next five years, there will be 195,000 less workers, which makes now a good time to recruit or retain quality staff.
Thirdly, don't stop doing the things that work. Focus on your core competencies - those things that you know you do well, underpin your profits and drive your customer base. Now is probably not the best time for new ventures or different directions. What are the things that worked best for you during the good times?
Also, don't take a business-as-usual approach. Innovation doesn't need to cost a fortune but it may help you create messages that stick with potential customers. Just doing the same old stuff probably won't cut it. Above all, get the message out there!
During a downturn, it's essential to pay attention to detail on the bottom line. Make sure you review your business strategy along with a detailed market review so that you understand how the market has changed, you can identify any opportunities and you can set goals for the next 18 months. There's also a need to manage risk, especially exposure to debtors.
Other things to avoid in tough times are:
- Inappropriate discounting, which can damage the brand you spent years establishing. Aggressive, targeted market-leading offers will grab attention and attract new customers, but broad discounting reduces profit and overall sustainability.
- Cutting effective marketing - the key is to maximise your return on marketing investments by focusing on those activities that deliver the best bang for your buck.
- Not tracking sales or keeping a customer database (which helps you identify what is working for your business). Either online or face-to-face, ask easy questions such as: "How did you learn about us? Why did you choose us? What do we do really well and where can we improve?"
- Cutting costs too far - don't throw the baby out with the bathwater. With clear marketing objectives and cost-effective ways to achieve them, the economic downturn is an opportunity for you to build your market share as your competitors falter.
The biggest mistake is not getting the right help - and early on. When times are good, many business owners think that they don't need any help, and in tough times they say they can't afford any help ...so they never get any help.
"For every action, there is an equal and opposite government program."
How often have you heard someone talking about their "brand", when they are actually talking about their name logo, corporate image and/or tagline? What worries me the most is when I hear this from people who tout themselves as marketing professionals.
Brand is such a critical business concept, yet many business owners and managers do not clearly understand their brand or how to manage it effectively through marketing and promotional activities. So, what exactly is a brand and why is it so important?
Your brand is the sum of the tangible and intangible benefits provided by a product or service, and encompasses the entire customer experience that you deliver. Brands are pivotal to the relationship between companies and their customers. A successful brand has a unique point of differentiation from the competition, exhibits values that the customer segment really wants and provides competitive advantage in that it is anchored in the mind of consumer.
Brands are much more than just logos or names. A brand is the effect on the customer of everything the company does and how it behaves, with every employee influencing these brand encounters. Get it right and the brand strengthens, customers become more loyal, the value of the business increases, business partners are attracted and employees enjoy a better environment. Brands also offer their customers a specific promise and must deliver that promise at every customer contact.
We may believe that we make rational decisions when purchasing products or services, but the reality is these decisions are based on emotion and personal values. As a consequence, we purchase those brands that fit best with how we see the world and how we see ourselves. The brands we accept in our lives, as well as those we reject, reflect our personalities and our values.
Successful brands build relationships with their customers based on the key elements of their brand, which include the attributes of the brand, the benefits it delivers to the customer and its core values. Brands have personalities that appeal to their customers by exhibiting values these customers can relate to and accept. The relationship between the brand and the customer is underpinned by an emotional bond, which at times can be quite intense and evoke a lifetime commitment (Holden, Ford, NQ Toyota Cowboys, Surf Lifesaving Australia, Fourex and Townsville).
The importance of a brand is that it differentiates the product or service from its competitors and, through this, simplifies the decision-making process for the consumer. Imagine trying to do the weekly shopping if all the containers were the same and the only way to differentiate was by reading the ingredients! It is much easier to trust the brands you know and the promises they make to you. You simply don't have time to consider, test and evaluate every alternative.
Some questions you should ask yourself are listed below:
- Are you managing your brand effectively and therefore spending your marketing and promotion budget wisely?
- Do you have a clear understanding of the key elements of your brand, what is working and what isn't and how this affects your relationship with your customers?
- Does your brand allow you to differentiate effectively your business or product from your competitors and, through this, retain and attract customers?
If you didn't answer "yes" to all the questions, you might want to contact us to talk about the options available for defining your brand strategy.
"Experience is a wonderful thing. It enables you to recognise a mistake when you make it again."
Over the past six months, there has been a massive shift in consumer attitudes to spending, products, services and our economic outlook. This means your customers are thinking quite differently about your business and your products than in the middle of 2008. Times have changed substantially.
How well do you understand your customers' wants and needs as they cope with the fallout from the global financial crisis and look to a future offering greater uncertainty than they have had to face for decades? If your customers are changing, then you will need to make changes to the products and services you deliver. Get it right, and you will maintain your customer base and possibly gain new markets as you tune in to altered perceptions. Get it wrong, and you will be left behind as customers look for products and services that better fit their current circumstances. Now is the time for sensible customer research to understand changing markets and ensure that you are the best able to meet your customers changing wants and needs.
Good customer research does not need to be expensive, particularly if you have already established an accurate and comprehensive customer database. The important thing is to get professional advice and support in the planning and preparation of the process, along with the analysis of the data collected. Good research is all about asking the right questions, in the right way, and being able to correctly analyse the data collected. The main thing to remember is that "rubbish in, rubbish out" means if the data collection process, including the questions asked, has not been done correctly, everything from that point on is at best useless and at worst dangerous.
Balfour Consulting has been conducting research projects across Queensland for the past 7 years and has over 22 years' experience in initiating, planning and analysing market research across Australia, New Zealand and South-East Asia. If you think now is a good time to find out how your customers view your business, talk to us as we can tailor research projects to meet specific budgets and specific circumstances.
Balfour Consulting Pty Ltd has a proven track record in the following areas:
Business strategic plan development
Marketing strategic plan development
Facilitated planning workshops
Market and social research
Media and presentation skills development
You have received this newsletter because you are a client or friend of Balfour Consulting Pty Ltd, or because someone we trust thought you might be interested. We will probably produce four e-newsletters per year to give you some up-to-date marketing and communications information and to let you know what has been happening as well as what we have planned. If you do not want to receive any more information, please let us know by email. We welcome your comments on the newsletter, or any other aspect of our work.