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Six ways to accelerate sales during slow times
By Jenny C. McCune • Bankrate.com
Conventional wisdom says that when the economy slides
into reverse, the best thing a small business can do is hang on
tightly, trim expenses and debt, and wait for the good times to
return.
But some believe that type of thinking could lead
a small company down the wrong road.
"It becomes a negative self-fulfilling prophecy,"
says Mark LeBlanc, president of Small
Business Success in La Jolla, Calif. "You think you are
in a negative downturn, so you end up in a negative downturn."
LeBlanc almost fell for the victim mentality himself.
"I kept on saying that our business was off slightly
because the economy was bad," LeBlanc says. For a while he
took a wait-and-see attitude, but a talk with a fellow business
consultant convinced LeBlanc that he needed to take action. He revamped
his company and had one of his most lucrative months ever.
Maybe a small business can do something to get the
good times rolling again. Here are six ways to rev up revenues during
slow times:
1. Listen to customers.
Find out what your customers' needs are now, not what they wanted
in the past, not what they long for in the future.
"You have to give people a reason to buy,"
explains Stan Mandel, a director of the Angell Center for Entrepreneurship
at Wake Forest University's Babcock Graduate School of Management,
Winston-Salem, N.C.
Very often a change in the economy can lead customers
to re-evaluate product, services and vendors. Ask your customers
what they want and what their top concerns are.
Even if their concerns (for example, business is off
at their companies) don't appear to be connected directly to what
your company has to offer, maybe you can make a connection. Explore
how your product or service can help a customer out of his or her
own downturn. Look at how you can tweak your product or service
to better accommodate customers.
And recognize that your customers may not be able
to clearly articulate their needs. Be careful to analyze their actions,
not just what they tell you.
2. Be a swift gear shifter.
LeBlanc learned the hard way about the need to quickly adapt.
He wracked his brains over how to increase revenues.
Since his business was down slightly, LeBlanc settled on an offer
he thought customers couldn't refuse: a one-time, 30-day consulting
rate, figuring this less-is-more strategy would stimulate demand.
He was wrong.
"It sounded like a great idea, but we got zero
response," LeBlanc says.
So he and his team went back to the drawing board
and devised a new marketing campaign that was a radical departure
from his previous one-shot consulting deal. Small Business Success
would promote a three-year counseling plan -- much longer and more
expensive than what it usually offered.
What LeBlanc realized when his first idea flopped
was that the key to surviving a downturn isn't just coming up with
a good plan, but being able to adapt and evolve.
"People get in a comfort zone. They want to keep
doing business the same old way, but that won't work," LeBlanc
says. "To be successful, in good times or bad, you need to
be flexible."
Customers enthusiastically embraced the longer, more
expensive consulting plan when it was unveiled in August. LeBlanc's
company did more business in that month than it had ever done before.
3. Adjust pricing.
You don't necessarily have to cut your prices, but you need to figure
out how to make your goods or services affordable to your clientele.
In LeBlanc's case, when he came out with a new three-year
consulting plan that would cost more than his usual services, he
asked his customers what he could do to make the plan affordable.
Based on customer feedback, LeBlanc devised a payment schedule different
from his normal pay-each-month-as-you-go plan.
"We asked for a down payment, then a monthly
fee that balloons at the end of three years," LeBlanc says.
The rationale: As LeBlanc's consulting produces results,
the client will be able to pay more at the end of the engagement
vs. paying one flat monthly fee for three years.
That payment plan worked fine for LeBlanc's customers,
but it may not work for your company. Some firms might offer a discount
if a customer pays in cash as a way to get payment up front and
avoid paying credit card fees.
The point is to find out what's right for your customers
and your company and deliver on it.
4. Diversify your sales menu.
Given the current economic situation of your customers, what can
you add or subtract from your offerings to stimulate sales?
For example, if your customers don't have the money
to pay for new products, maybe they would be interested in a maintenance
plan that would extend the life of the products that they previously
bought from you. Or maybe they'd like a refurbished, used product
in lieu of a new one.
Look for innovations related to your product or service
that will make customers buy now.
5. Reward loyalty.
When times get tough, you want existing customers to stick by you.
Set up loyalty programs to reward customers for giving you their
business.
Loyalty programs can work for a variety of businesses.
Something as simple as a book club card -- buy 10 books, get the
next book free -- can help keep customers coming back to an independent
book store. Schnee's Boots & Shoes in Bozeman, Mont., has a
similar program for shoe purchases.
6. Look for new customers.
A business owner doesn't want to get overextended, but are you overlooking
opportunities?
If your current market is business-to-business, perhaps
there is a way to tweak your product or service to appeal to consumers.
Similarly, look at ways to take a consumer product and turn it into
one that will appeal to businesses.
And where the slowdown is associated more directly
with a depressed local economy, is there a way to sell to other,
more healthy regional or national markets?
The good news is that the bad times won't last forever.
If you take these steps to shore up sales now, your business will
be doing better than ever, no matter what the economic climate.
Jenny C. McCune is a contributing
editor based in Montana.
-- Posted: Oct. 5, 2001
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