Do you see opportunities when others see risks?
In July 2008, I brought home a new puppy – Lily, a border collie cross kelpie. Little did I know that Lily had sized up the opportunity (a home with food) and quickly developed a product (cute and well mannered puppy) to appeal to her new target audience.
Over time, it become apparent that Lily and I have different opinions about many things. Lily clearly sees the act of jumping a fence as an opportunity to meet new friends while I only see the risks of Lily encountering a car. Do you have children who see opportunities where you see risks?
So why do some companies emerge from a recession stronger? A McKinsey study found that companies that perform better in recessions refocus their cash on innovation, growth and acquisitions rather than cutting costs. These companies simply seek out new opportunities while other companies see risks and cut costs.
Activity 1: List three opportunities for your business next year.
Activity 2: Where could you refocus your resources to achieve a better return?
Have you changed your strategy to respond to economic change?
I was amazed at how quickly Lily modified her strategies to suit her environment. When Lily first arrived, she growled to get her own way. This strategy resulted in Lily being put outside. She uses a different strategy now – she looks at me with sad eyes, which works every time!
Did you develop a business plan for your business when the economy was booming?The changes occurring in the global economy will require business owners to respond quickly and constantly to the changing economic landscape.
So why should you revise your business plan and marketing plan? Changes in unemployment rates, equity prices and housing and fuel costs have changed the profitability and risks of different segments. For example, many baby boomers will have less money to spend on clothing, home furnishings and travel.
Activity 1: Who will be your most profitable clients next year?
Activity 2: What product features will these new clients demand?
Activity 3: How have your competitors changed strategies?
Have your re-prioritised your investment in marketing?
There are times in our lives when we need to re-prioritise our resources. Lily eating three mobile phones, bouncing my laptop and destroying my backyard was just one of these times. So I re-prioritised my cashflows and invested in four months of dog training. A peaceful house – priceless!
Have you identified your most profitable customers? It is now important to prioritise your investment in marketing on the most effective ways to reach and influence them. To do this, you will need to measure the ROI for each vehicle.
The most effective marketing strategies use a mix of traditional and new marketing. Consider investing 10-15% of your marketing budget in new media such as the internet and social networking.
Activity 1: Define your value propositions and key messages to meet changes in emotional drivers of consumers
Activity 2: Refine your products and pricing to meet current needs of consumers
Activity 3: Focus your marketing on the most profitable or future growth segments
Companies that are able to dynamically assess and respond to the changing business landscape will be better positioned to create more sustainable profits.
