January 8, 2009 By John Stanley
Weathering the storm: Increasing sales in a tough economy
The world changed in October 2008, have you changed your business practices as well? If you plan to carry on doing things in the same way in 2009, you
will be in for a shock.
The world changed in October 2008, have you changed your business
practices as well? If you plan to carry on doing things in the same way
in 2009, you
will be in for a shock. Every business will need to adapt to the new
economy we all find ourselves in.
The consumer is bound to “cocoon”. With less money in their wallet
or purse they will spend less. They will still shop, but will be less
adventurous and that impulse spend is going to shrink. All retailers
are going to have to work harder to get the purse to open. In the
short term a sale may work, but it will not be a long term strategy to
keep the purse open.
So, what are you going to do?
Every business owner and manager should be asking three key questions of themselves and their business.
– What should they keep doing?
– What should they stop doing?
– What should they start doing?
– What Should you Keep doing?
You already have customers and the most important thing to do is to
keep those customers. The most cost effective way of growing your
business is to keep your existing customers happy. I have already come
across one retailer who has told me that they are cutting back (in fact
eliminating) their training budget. They are cutting costs.
They have also told me that the average sale per customer has also gone down since they stopped training their team.
Now, they are putting it down to the economy, maybe it is a factor,
but the last thing I would be doing is stopping the training program.
I accept the “old timers” should maintain standards of customer
service, but eh new guys will be facing the customer with less skills
and no understanding of your customer culture. According to research,
in the situation it can take up to two years to lose a customer, but it
only needs your competition to carry on training their team and that
process could be speeded up.
What should you stop doing?
If the above business had told me it had stopped using
“interruption” marketing in newspapers, radio, billboards etc to get
brand new customers, then I could agree that was a logical decision.
the impulse spend shrinks, it gets a lot more expensive and difficult
to attract a brand new customer. The conversion rate to get that new
customer may not be cost effective. But, how many businesses will
reduce the training budget and increase the interruption marketing.
They plan to yell louder to an audience who is not listening.
What should you start doing?
best marketing strategy you can invest in is permission marketing.
Getting your existing customers to come in more often and to refer you
to a friend.
My local town has just launched a “Local Shop”
Program. The retailers and Small service businesses in the Chamber of
Commerce have combined forces to develop a loyalty club that crosses
over all their customer bases. Shop Local vouchers from these
businesses are downloaded from the group’s webpage. This keeps the
costs down in developing the program.
If you’re not investing in
referral or permission marketing then the present economic climate is a
time to start. You are marketing to somebody who knows you and like
what you do. They are friendly to you and your business and want to
see you weather the storm. The key is to ask them how they can help
and how they would like to receive information from you. If you just
bombard them without asking them, you are abusing the trust that has
been built up between you and the consumer.
It may be time to start up a focus group with your customers, it you haven’t already done so.
What’s your action plan?
If you haven’t considered the following, I would encourage you to do so.
1. Employ a mystery shopper organization to ensure you are maintaining a high level of customer service.
2. Increase the budget in effective team customer service training.
3. Introduce an empowerment policy so that your team have the confidence and support to excel in customer service.
4. Reduce your Interruption Marketing budget.
5. Increase your referral marketing budget.
6. Work on building the database of your existing customers.
7. Introduce a “bring a friend” campaign with existing customers.
8. Introduce surprise “customer perks” to keep customers coming back.
9. Keep the team in the picture with the average sale per customer.
10. Reward the team when they exceed set targets.
don’t ignore what’s happening in the world, keep in touch with the
economic global journey, but tailor your business accordingly and keep
John Stanley is an internationally recognised conference speaker
and retail consultant. He has authored several successful marketing and
retail books including the best seller Just About Everything a Retail
Manager Needs to Know. John’s retail experience covers hands-on
retailing in supermarkets, hardware stores, garden centres, farmers
markets and drug stores. For more information on John Stanley and how
he can help your business prosper and grow, visit his website www.johnstanley.cc
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