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How to Rise Above a Down Economy
Many business people find themselves in the midst of a serious growth crisis. Even before the housing crisis, recession, and market crash, sales were dropping, and clients seemed to be more price-sensitive.
Old-school solutions such as advertising more promotions or new flavor-of-the-month fads such as displaying images on boutique, graphic-enhanced web site and brochures, or using pretty delivery boxes won’t attract people who find many businesses, unresponsive, and over-priced.
There is a parallel between many businesses and the current housing market and auto industry. Luckily, we can learn from them and consequently avoid a similar fate.
Here’s the comparisons:
PROBLEM: Home sellers acted as though home values would continue to rise indefinitely. And builders overdeveloped in an attempt to anticipate demand.
PROBLEM: Likewise, many business owners raised prices year after year with little regard to what consumers would pay. As a result, compeitors began taking advantage of this opportunity to enter the market with comparable (based on consumer perception) products and services, at lower prices. In many areas of the country the market is “over-developed” with more competitors than demand requires.
SOLUTION: Now is the time to increase, not decrease your marketing efforts. In order to increase the gap between you and your low-priced competitors you must do one or both of the following:
Introduce new (really, REALLY new) products, and change the old-school business model experience for your
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clients. To attract a significant number of clients you may need to do almost the opposite of what you’re doing now, otherwise not enough people will notice, and minor changes will be easy for competitors to quickly imitate. Dramatically raising or lowering your pricing is very risky. So to compete with lower-priced studios, or to increase marketshare, add a new “department” within your business that offers a standard level of features, with fewer products at lower prices. If you’re priced substantially higher than most competitors you may be viewed as over-priced.
PROBLEM: Many first-time home buyers joined in the optimistic buying frenzy only to discover that they didn’t really understand the complex mortgage instruments that fueled the frenzy and often resulted in very bad outcomes as interest rates rose and market values dropped.
PROBLEM: Likewise, few business owners started their businesses with extensive management, sales, or marketing experience. When there was less competition and a strong economy, simple business imitation could compensate for their inexperience. But now, when consumers have more alternatives they have become more price-sensitive. This demands a thoughtful and precise response to new market conditions.
SOLUTION: Because not enough people can distinguish the quality of your products from your competitors your focus must now be on creating a unique message. Then, using new marketing tools get that message into the minds of potential clients in your market area. At the same time, perform a complete analysis of your pricing and management to maximize your profits. Just raising prices or verifying that your cost-plus formulas are correct won’t be the answer this time. Like any other successful retailers, you must price yourself by market and for the buyer types you hope to attract.
PROBLEM: US auto makers didn’t take the lead in producing dependable cars that Americans could drive well over 100,000 miles. No amount of marketing or “education” could convince enough Americans to buy the gas-guzzling, repair-prone, short-lived cars produced by Detroit over the fuel efficient, dependable foreign cars. As a result US auto makers fell behind their competitors.
PROBLEM: Similarly, owners have maintained their businesses for decades, without introducing significant innovation. The experience
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they provide to clients and the products they offer haven’t changed much in years, if not decades years.
Meanwhile, consumers have been expecting new products and the convenience technology offers. This discrepancy between what most have offered, and a rapidly changing marketplace, provided an ideal opportunity for competition to enter the marketplace.
SOLUTION: Motivated owners will take quick and decisive action and prosper. Remember, every crisis also presents opportunity, but only if you act.
If you’re not getting consistent referral business it’s because in part, your products, and services aren’t generating the buzz this new marketplace demands. Now, more than ever, is an excellent time for an Extreme Business Makeover. Regardless of what you have planned, taking action to sustain your business should come first. Learning from the lessons of Detroit and the recent housing bubble means taking decisive action rather than blindly following hackneyed industry notions.
Fortunately, you don’t have to create the solutions yourself. The tools 3 LENSES offers will help those who have the drive and the desire to succeed. We know of no more powerful investment. The only thing you’ll regret is not taking control sooner.
"You want to be greedy when others are fearful. You want to be fearful when others are greedy. It's that simple." – Warren Buffett
To paraphrase an old saying, there are three types of photographers:
- those who make things happen
- those who watch things happen
- and those who just wonder what happened
Which are you?
If you want help, or would like to discuss a program that includes all the materials you will need, contact me.
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