Business Coaching

We have all heard read the reports. Our world is in an economic downturn. Many say it’s a severe recession while others use the word depression but regardless of the label, business owners are only concerned with how their numbers look.

For some, such as those in discretionary industries like apparel and travel, you are among the hardest hit.  We all know that eventually customers will purchase and profits will return but what can we do right now to preserve customers and profits?

There are two actions to take right now to ride out the tough economic times.

First, businesses must find the value in their current customer base.

In other words, business owners need to understand that the greatest asset of their business is their current customer base.

It costs upwards of six to eight times more to acquire a new customer than to sell an existing product to an existing customer, so in our current “economic winter,” it is vital to treat current customers well and find ways to add value to your current product and/or service line.

While some companies would have us believe that they are customer centered, in reality that may not be the case.  When the phones are ringing wildly with sales, customers are crowding showrooms and battling over the last item on the shelf, some owners forget that their customer’s money was earned by hours of hard work and because of that they are going to maximize the value they receive for the money they spend.

A great customer experience is the key to creating and maintaining a business relationship. As Dale Carnegie said, having a genuine interest in somebody is the first step to that person feeling valued.

Second, businesses must streamline. While it seems logical to think that having a larger range of products which appeal to the widest of range of people would be the best way to increase sales, some successful business owners to think differently.

Diversity doesn’t mean that you have a great business. It may be more profitable to sell lower volume items at higher price points and higher profit margins.

While product diversity may be important if you are a large scale retail establishment who is known for being the one place that customers can shop for just about everything, the specialty business owner may have a different focus.

In this case, selling the highest profit margin products may make more sense.  Product bundling and customer appreciation days may increase the perceived value while preserving a high profit margin.  Businesses rarely survive over the long term by focusing on low prices.

Finally, keep in mind, downturns force companies to pare marginal products and services, and focus on what they do best.

This is one of those times.

There is no denying that when the economic climate is challenging, streamlining operations is pivotal to the bottom line but remember that those customers who have believed in your business in the past are the best assets you have.

Don’t offer more, but, instead, optimize the value of our current offerings.

You can buy the cheaper office supplies but don’t discount the customer’s experience.

One of the more well-known filmmakers in America is taking unique steps toward advertising his latest movie, he’s not doing any.

Kevin Smith, the director of such films as “Clerks” and “Dogma” is taking his new movie directly to the people. He will be using social media and word of mouth to get the message out about his film, “Red State.” You won’t see advertisement for the movie in your local newspaper, on television or in any major media outlet.

Smith’s move is a response to the growing lack of control artists feel in the movie making industry. Smith said that he’d distribute the movie himself and wouldn’t spend a single cent on advertising. Instead he plans to use word of mouth, podcasts and Twitter to promote his movie.

This isn’t Smith’s first extensive foray into social media. He’s well known for starting a Twitter fight with Southwest Airlines when the rotund director had an issue with the size of the seats on the airline, so Smith has experience getting his message across through social media. But what can businesses learn from this story?

If the makers of a multi-million dollar movie are willing to tie their marketing exclusively to social media and word of mouth what does that say about the state of advertising today?

The first thing to be taken from this is that you don’t have to spend a lot of money to effectively market your product. For Smith, odds are that a lot of the people that might be targeted through a traditional marketing campaign might not be interested in his movie anyway. To that way of thinking, traditional marketing is a money pit, an expense rather than an investment

Smith has a thorough understanding of his target market and by refusing to waste money on advertising he is taking a very proactive stance in movie marketing. He’s even referred to this position as “Indie 2.0”, a different way to finance and publicize for the rest of the independent movie market.

What do you think of Smith’s strategy? Would this type of campaign work for your business or are you still tied into traditional advertising? Tell me what you think…

ActionCOACH Business Coach David Drewelow knows what he’s talking about when it comes to the recession. He’s managed to coach Marion Mixers’ president, Doug Grunder, through the recession, and instead of downsizing the company, Grunder managed to stay afloat without having to lay off any employees. Instead, Drewelow managed to help Grunder turn the recession into an advantage for his company.

Marion Mixers manufactures horizontal mixing and blending equipment, supplying equipment in the food, plastic, chemicals, minerals and recycling industries.

Grunder bought into Marion Mixers in 1995 with several other investors. About a year ago, those investor agreed the best long-term strategy in the down economy was to reinvest any revenue back into the company. But after attending Drewelow’s ProfitCLUB, Grunder decided to work one-on-one with a business coach to get the information he needed specific to his business.

Drewelow broke that one-year plan into 90-day increments for Grunder, and in addition to dealing with day-to-day issues, together they work out what needs to be done on the plan over the next two weeks and what tools Grunder may need to assist him.

Curious as to how Marion Mixers made it through the recession with Drewelow’s help? Read the full article in Edge Business Magazine here.

Is your business healthy enough to survive, recession or no recession? Take our Business Health Check to find out. Or, if you want to give coaching businesses a try, see if you qualify here.

Beetles have survived centuries by adapting.

It’s a new year, and if last year taught us anything, it’s to always be prepared for whatever the economy has in store, good or bad. It’s a basic law of Darwinism: adapt, or you won’t last through the winter. The survival of the fittest is precisely why some companies have gone under (resistant to change, stuck in their ways) in these times… but others haven’t.

Financial Times published an article early last year that still applies now about how surviving the recession could be compared to Darwinism and how animals that adapted to their conditions survived. The Financial Times is quick to point out in the article that “It is not the strongest species that survives, or the most intelligent, but the ones who are most responsive to change.” Know what the most adaptable being on earth is?

The beetle.

Beetles are some of the most adaptable living organisms in the world, and have survived centuries because of their talent for adapting as the times change. Companies have to sharpen their points of difference to survive.

Bears are strong, but now endangered. Eagles are smart, but now endangered. The beetle, however, is still around, due to its adaptability. It’s something for business owners to think about, especially since the recession is still very much here for many businesses. Being stubborn, resistant to change, or just plain being in denial won’t help you or your business through a recession.

How is your business doing? Fill out the Business Health Check and find out if your business has what it takes to adapt with any and every market change.

It’s a tough job market out there for those who have been laid off or, even worse, just graduated college.

According to the National Association of Colleges and Employers, 19.7% of 2009 graduates landed a job.

Who knows how many tries that took, too…and the unemployment rate in some states is either climbing or stagnant.

However, if you’ve still got your job and business afloat, now is a great time to really prove what you can do.

Whether you’re a manager or work for a manager, secure your job and position yourself for success – even in the recession.

If you’re an employee:

• Do your research and find out which managers are moving up the chain or overwhelmed. Then volunteer to help out as necessary.
• Along with the first point, be prepared to take on work you might not normally do, work long hours, or difficult tasks.
• Maintain contacts – work with other departments and form good working relationships…you never know when you may need them again.
• It’s a recession, so any worthwhile suggestions in how to cut costs are appreciated – just make sure you play a part in the effort.

Some extra pointers for managers or business owners:

• Save now to make a smart investment for the future
• Motivate employees to do great work
• Find out if you’re meeting all customers’ needs
• Find ways to differentiate your business from competitors

It’s probably a good idea to take a cue from ActionCOACH’s 14 points of culture, too: be positive, grateful, a team player and commit to excellent and successful results.