Six Lessons From the Downturn
Six Lessons From the Downturn
Many of us still reeling the world economic crisis surrounded by the debris of corporate collapses, career fallouts and companies teetering on the edge, not knowing where to turn next. The downturn has shown us some harsh lessons of competition in lean times. Whilst many companies are struggling, there are some which are flourishing. We take a look the 6 strategies which are crucial for companies to flourish in the new economy.
1. Get closer to your customer.
We have gone through dramatic change in the past year, from a world where banks were safe places to keep you cash, the stock market was a lucrative investment vehicle and jobs were relatively secure. Consumer outlook was optimistic, liquidity was abundant and expectations were high. Not only has the customer been shaken, the entire playing field has changed. It's now time to go back to the customer and find her new agenda. Most importantly, it's overdue to ask the customers what they are prepared to actually buy. Investigate and get very very curious. What do they like about your product or service? How does it make them feel? What place does it play in their lives and how does it touch the lives of those around them? What do they really think about your industry as a whole? Gaining these insights will ensure you will stay ahead of the market. If you have been guessing the answers to these questions chances are your customer will be further away from you than you think. Remember, the closer the customers, the less marketing dollars you need to shout at them. It is crucial now to research your market.
2. Innovate and create.
Innovation has become all the more important in this downturn. Many companies have attempted to implement innovation by going to corporate retreats, or playing strange games with different coloured hats. This is unnecessary and most likely too expensive when times are tough. How do you innovate to improve your customer experience? The answer is that if you have followed step one you already know the answers to step two. Ask your clients what they want to see, how they want the product or service improved, ask what annoys your clients - or ex-clients about your offerings. This will provide you with the key of how to create and innovate, not for the sake of innovation but for the sake of your customer.
3. Pricing matters.
The Wal-mart model has proven to be one of the champions of the downturn. The company was up 18 percent at year end 2008, proving that pricing matters more in the current environment. It's crucial to examine the pricing structure of your products. You might have one of the most recognised and desirable products on the planet and you still may find room in the budget to drop the price or add value. Case in point is the new iphone™ released in June 2009 which was priced to sell. The demand for iPhones are unmistakable, as is the apple strategy to price their phone in line with their customer's reduced income and value-driven mind set.
4. The world has changed, have you?
Do you still have the same tired old strategies tactics and repeated mantras masquerading as innovation since before we heard of Bernie Madoff? Now is the time to take stock and examine your overall strategy. If your approach is the same as it was before September 08 most likely your customers will find it stale and you will be losing market share to your more dynamic competitors. Remember it is not the survival of the fittest; it is the survival of those most adaptable to change.
5. Cash is king.
Managing cash flow is increasingly important, no matter how big or small. Companies offering enticing payment terms for prompt payment do well in this environment as do those using invoice factoring. In times like this it is crucial to credit check your clients, you can do this simply and inexpensively with online services. And of course the obvious strategy to maintain cash flow is to cut costs where ever you can.
6. Focus, focus, focus.
We all know how easy it is to lose focus. Closely following the steps above and keeping the client as the heart of the business will ensure not only success through the coming period but increased market share and profit. Focus results in following these steps repeatedly to be the best in the industry.
