John DiJulius | Customer Experience Blog

The Recession is a Terrible Thing….to Waste!

The success stories of the next decade are being born right now in 2009 during this recession. Guaranteed, over

John DiJulius

John DiJulius

the next several years you will hear hundreds of incredible success stories about companies that were forced to reinvent themselves, out of desperation for survival, and creatively found new revenue streams and opportunities by revisiting the fundamentals that they focused so heavily on during the early years.

Hidden Opportunities Found in a Recession

Reinventing Yourself – We all enjoyed the economic boom that we saw over the preceding decade, which I like to call the “busy bus.” At times it seemed like new business would just fall in to our laps, with very little effort. As a result it made many companies content and over confident. They lost focus on the fundamentals of business such as their culture, employees, customers, and the experience they should consistently provide.

Working Harder – Success should be hard. It should require long hours, creativity and sleepless nights. Obtaining new business should be about researching the company and the decision- maker’s hobbies and interests. Keeping existing customers should require touching your customers on a regular basis, obsessing about their satisfaction level, and genuinely thanking them for their business.

New Revenue Streams – This is where the biggest opportunities have been reported already. Businesses having difficulty selling their stale product and services have invented new revenue streams with many times lower price points, but many times more profitable. Companies have been able to go deeper with existing customers, and acquire new business. More importantly, they provide solutions to customer’s needs. These new revenue streams, which would have never been created in normal economic conditions, now represent a larger percentage of their revenues.

Fish when the Fish are Biting – I have spoken to so many business executives who have found that when times were good, they focused so hard at diversification, i.e. promoting non-peak products, services and hours, that it became a detriment to the “cash cow” portion of their business. They tried steering customers away from their busier days hoping that would drive more business to slower days. They also over-focused on marginal selling products at the expense of hurting sales of their bread-and-butter products and services. However, good times camouflage many of these poor strategies until it is too late. Examine your staple products, services, and peak times to ensure you are positioned to take full advantage when the fish (your customers) are biting.

Customer loyalty is every company’s greatest asset in any economy

Experience is your marketing – Providing an experience versus making a sale (which is very similar to “fish when the fish are biting” theory), means you concern yourself with the “hungry fish” and stop trying to force feed the fish that aren’t hungry. Quit going after new business and focus on the customer’s who are trying to give you more of their business. Go deeper with them, build stronger relationships, anticipate their needs, follow up, say thank you spontaneously, and fix it. Fight for every customer.

Staff “buy in” – Employees read the paper and watch the news and know how tough times are. A more sensitive issue is that everyone knows someone who has lost a job as a result of this recession. As a result, employees have never been more willing to cooperate, band together, and make sacrifices to step up and fight for a cause. The success of their company and the security of employment depends on it. For example, had we approached our staff a few years ago about increasing Saturday hours, we could have encountered an employee revolt. However, during these times, our employees were so willing to help out by adding more hours versus being asked to cut hours.

A recession is like a business enema

Less Competition – During economic highs, you see industries get flooded with too many phantom businesses, giving reputable businesses a black eye. Every industry has seen its fair share of casualties, and businesses closing are at an all time high. While this is unfortunate, it also means significantly less competition for the businesses that have survived, and an opportunity to pick up new customers.

Employer Market – Unemployment is at an all time high, meaning there is a tremendous amount of talent available for existing businesses to choose from, as they emerge stronger than ever and can build their culture on purpose versus adding warm bodies, like many have done in the past.

Better conversion rates – I have also heard from many that while there may be less new customers to fight over, the ones that we do come in contact with are better candidates. There are fewer window shoppers today and more serious buyers. I asked one owner why his business was not nearly as affected as others in his industry. This is what he shared with me: During good times, his typical sales person would average a 23% conversion ratio of potential sales leads. They would get 75 leads per month, which means they were closing about 17 new customers a month. Since the recession, they have dramatically increased their focus by building stronger relationships from the first hello. He says while today his leads are about half what they use to be (about 35), their closing ratio is about 44%, which means they are closing 15 customers per month versus 17 during good times. So while you may not be getting the volume, you can make up for it in your conversion rates if you focus on creating value, improving the experience and building relationships versus pushing a sale through.

Extremely profitable when demand comes back – Every business has been forced to find more cost effective ways of trimming fat, reducing down time, increasing staff productivity, etc. These are things we all should have been doing all along. So here is the bright side: when the tide turns and the economy gets stronger, think of how profitable we will be with our new, sleeker model.

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