Recovering from the GFC

In the BRW article “Road to Recovery” (D’Angelo Fisher , 10 September 2009), ten of Australia’s leading management and business advisers provide a checklist for companies to prepare for the recovery. Two items of note on the list are:

• “Throw out the old business plan”. The author qualifies that “many of the plan’s core elements will remain relevant…[but] certain issues need to be continually tracked and refined to reflect changes in the market and economic conditions”; and
• “Get your systems and processes right”. This is “not just to cut costs, but to position companies to be able to hit the ground running when the economy comes good”.

The article highlights that “success in the upturn, whenever it comes, will require planning and, in some cases, fundamental change”. It is this planning that businesses need to get right. To make any significant change, businesses should look to remove or mitigate the risks as much as possible. Using a sound process to develop the plan and to make the planned changes (especially managing the risk throughout the change) is imperative to ensuring you are making the right changes for the future success of the business.

The current environment provides a good opportunity to review a company’s systems and processes. D’Angelo Fisher states that “few, if any, businesses can expect to carry on ‘business as usual’” in the new economic environment. Using external expertise can help extract maximum benefit from the business’ processes – a fresh pair of eyes and someone who is not “the owner” of a process can challenge the value of those business systems. A proven way of doing these system reviews is to use a process known as ‘Outside In’ or ‘Customer Expectation Management’ (see Steve Towers reference below).

The article also highlights that “reviews of systems and processes should occur as a regular part of doing business, not just when times are slower”. This is important to remain competitive and continually improve the way the business performs. Treating the Business Plan and the strategy it contains as a living entity is also a good way to ensure the tactics you employ remain relevant to the ever changing business and economic environment.

All signs are showing that the recovery is now upon us (or soon will be) – how quickly individual companies recover and take advantage of the opportunities will depend on their business plan, systems and processes.

References

Leo D’Angelo Fisher, “Road to Recovery”, BRW Magazine, 10 September 2009, http://brw.com.au/viewer.aspx?EDP://20090910000031535225

Steve Towers, “Don’t give customers what they think they want”, http://www.towersassociates.com/Towers_Associates_Customer_Expectation.html

Craig Hansom. 16 September 2009.

Marketing in an Economic Downturn

Things are tough. A lot of organisations are struggling. Sales are down and profits are tight. But there is hope. People and Businesses are still spending money. They might be more selective, but there is still activity. The challenge is to target those customers that have got money to spend.

Now is not the time to stop marketing and cut your sales effort. Now is the time to ensure that your sales and marketing resources are being maximised. In the good times, sales and marketing was relatively easy. If you had a reasonable product or service and got a few good customers and referrals, then customers came to you. Now you need to work harder. You need to work to find and retain customers. But don’t just work harder – work smarter!

So, how do you maximise your sales and marketing spend?

The first objective is to look after your existing customers. Do you know who you key customers are? Make sure you don’t lose them to a competitor who undercuts you with a better product, service, price or after-sales service. You need to nurture your relationship and make sure you are meeting their changing needs. How is your customer hurting? How can your product or service change to help them? What other products or services do you offer that they could use right now?

While we are talking about existing customers, ask yourself this – how loyal are they? You should be trying to make your customers loyal rather than just satisfied. Do you exceed their expectations? Do you elicit a “wow” response? Working with your customers and trying to help them through these tough times will certainly help.

The second objective is to look for new prospective customers, new opportunities. But I wouldn’t recommend just pulling out the telephone directory and cold calling just yet. This is where a little bit of strategy and doing a situation analysis will save you a lot of wasted effort and time. Start with analysing your existing and past customers. This is where a CRM system comes in handy, but if you don’t have a traditional CRM tool, don’t despair – you are likely to have the data you need in other systems, such as your finance system or even files and emails. What you are looking for is groups of customers or product purchases that will help you determine where to spend your sales effort. You might discover some of your customers in a particular market segment are still spending – how can you target other prospects or past customers in that same segment? Or maybe a particular product or service is doing well – what other customers might be interested? While you are doing this analysis, consider which opportunities are most likely to pay off. Focusing on the high probability, short sales cycle opportunities will start filling your pipeline now. Try and get some quick wins on the board that will then give you more time to focus on the longer term deals. While you are analysing your data, if you can acquire metrics such as sales per customer and even sales per call, this can help you focus on getting the best result for your marketing spend.

If you get it right, not only will your organisation ride out the storm, but you might even prosper. The ultimate reward for getting your sales and marketing right now is to increase your market share and then be ahead of your competitors once the market recovers. Depending on what business you are in, this might be sooner than you think. Well, that’s what I hope.

Craig Hansom. 16 May 2009.