Aesoph Group

By Christopher Aesoph, MA

     The Bad News: There are more bumps in the economic road ahead, and so many variables in the world economy, no one can say with certainty how the economy will fluctuate, or when. I have access to leaders in many industries when we compile customer research for our clients, and they all concur: high and consistent economic times are not around the corner.

The Good News: rather than despair, learn to deal with reality. Here are five methods that will make this roller coaster ride tolerable, even enjoyable: 

1. Be sure your products and services are remarkable. One might be tempted to say, “Be sure your products and services are needed,” but this is a matter of taste. If your product is remarkable, someone is sure to need it.
2. Return your company to apprenticeship status. Like most companies, in the past two decades of extravagance, you’ve marched an incline to a point where your products cost more than they did when you started. True, you’ve added features that increased the value. But that added value doesn’t do anyone any good if you have priced your products beyond what customers can afford. I’m not suggesting you simply cut prices. Enough of your competitors will do that, in a panic. I’m suggesting you simplify your offerings. Go back to the basics of why that product exists and what your customers want at its simplest level, and offer that again. Chances are you moved “beyond” that entry level product offering some time ago. Go back to it. Make it easy for new customers to have a first good experience with you.
3. Be bold. Most people, in trying times like these, hunker down. They cut costs. They don’t take any risks. Cutting costs helps, no doubt, but don’t let caution turn to paralysis. Even as you cut costs, talk with your teams about how to do everything better. Reexamine the link between what you’re doing with what your customer needs.
4. Speaking of boldness, if possible, now is the time to acquire the markets and ancillary companies you need to secure a position in the world. Many studies support this kind of move. Companies that took the lead after the 1999 recession spent significantly more on selling, general, and administrative (SG&A) costs than did companies that lost their market leadership. They also spent significantly more on R&D, and advertising.*
5. Educate your best customers as to why your products and services are the best buy, and why they can’t achieve the same excellence without you. Excellence won’t be enough to mollify every customer. Face it, some customers are going to seek the cost cutters. Let those customers go. Build your company on the customers who want the best, because that is what will pull you forward into innovative new frontiers. At a small risk of self-promotion, customer research and process review are not programs to be used only when times are good. They are especially effective when times are tough, precisely because they provide the kind of bold, forward-thinking actions that are required to stand apart from the crowd.

 *McKinsey study: http://www.ftadmin.co.uk/downturn_web/mckinsey_report.pdf