By now, there's no question that the U.S. economy is mired in an economic slowdown. While your specific industry may be strong, slowdowns are epidemic in nature and have a way of leaking into otherwise solid sectors.
Expectations drive consumer behavior. A mindset of limitations is replacing an attitude of abundance. As a result, people are hedging their bets and risking less.
All of this has put business owners in a precarious situation that they didn't experience during the roaring '90s. But your business doesn't have to stop growing just because the masses are taking a wait-and-see attitude.
Here are 12 tactics to help ensure your business doesn't follow the downward trends.
B>Obtain warranty and maintenance contracts that extend the useful life of the status quo.
B>Offer programs/products and services that promise reduced costs and greater efficiency. They will be more attractive than those promising increased sales.
Recognize that channel power will go to those with paying customers or the ability to retain their margins.
Pick and choose your partners on both the supplier and the customer side. Loyalties and relationships of convenience/laziness will be broken. In times of stress, relationships either deepen or disappear. You can't be all things to all people.
Move cautiously. The transition from having not enough people to having too many people may be sudden. "Bargain-price" human resources can help increase customer service or search for new customers.
Focus on the PACER circles (best and highest use, target market and customer pain). As demand slows, every purchasing decision will be questioned. The practice of finding the best suppliers may be replaced by finding the one lowest cost supplier.
Be aggressive. As people become more risk-averse, selling on the basis of fear, uncertainty and doubt will be effective.
Target your bottom line. Capital goods will be harder to get approved by customer finance departments. If they are approved, they will be prioritized in the following order:
* Those that improve profits
* Those that increase sales
* Those that decrease production costs
* Those that decrease administrative costs
Utilize technology. When tech capability becomes greater than the market's capability to absorb it, prices falls when everyone beyond the early adopters stop buying it. The minute the technology isn't used, the value drops. Technology starts to be given away and revenue streams are devalued. Inevitably, the technology is adopted and price goes up, or, more likely, the next great thing replaces it as the cycle repeats itself.
Outsource part of your operations. Demand may or may not decrease, but the need to deliver your product or service doesn't.
Leverage goodwill if you've already created it with your customers.
Rethink the time vs. money tradeoff. People may have more time to spend on tasks they formerly might have paid others to perform.
While there is no surefire way to avoid a slowdown, if you're proactive in your approach, odds are you'll be better off than your not-so-prepared competitors. Andy Birol (email@example.com) is president of PACER Associates Inc., a Solon-based firm that provides expert advice to owners and leaders who need to grow their businesses. He can be reached at (440) 349-1970 or at www.pacerassociates.com.