Getting up this morning the valley was full of mist, and the hint of the start of Autumn was in the air. It was a beautiful morning and as we took our dogs for a walk up the hill and along the ridge, it made me think of what happens in Autumn, apart from apples, blackberries and sloe gin!
And the biggest thing that happens in Autumn is market meltdowns: it happened in 1987 and in 2008: always in the autumn it seems …
… and never have we been more ripe for a meltdown than now, I would suggest: with record levels of debt, the world economy in crisis and central banks printing money like crazy.
In conclusion. It looks like a very long and painful winter lies ahead – and we’re not even mentioning the hugely likely scenario of further spikes in Covid 19 and the accompanying lockdowns…
But I don’t want to be a doom and gloom merchant: after all, they say that forewarned is forearmed, so this blog is about 2 key things you can do to survive, or even thrive in the, probably certain, economic meltdown that’s coming.
In tough times, it seems to me that there are two things to focus on:
- Survival: by having more loyal customers and winning business because you’re better than your rivals, and
- Innovation: because massive opportunities open up in times of crisis
As Charles Darwin famously said: ‘It’s not the strongest of the species that survives, nor the most intelligent … but those most adaptable to change’: never will knowledge of that law be more important than in the next five or so years!
So, what can you do now?
I think the 80/20 law can help us here: as a general guide, this law states that: 80% of your profit comes from 20% of your customers, 20% of your customers cause 80% of your problems and 80% of your opportunity comes from 20% of your activities.
For survival you could perhaps:
- Get really close to the most profitable 20% of your customers: gather feedback from them: what do they like and dislike, and what are they worried about for the future? How can you help them more? How can you keep them and make them fiercely loyal? What could you do to encourage them to recommend you to their friends? For example, I developed my ‘Effective time management’ training and coaching material in response to customer needs, which has gone on to make me many £000’s in income and many new customers over the years.
- Start proactively cutting down the time and effort you spend on the 20% of customers who give you 80% of the problems. You may also want to gather feedback from them, find out what they REALLY want and decide if you want to keep giving it to them (and maybe find opportunities to improve the relationship), or not (and find ways to stop serving them and using up your valuable energy on fruitless pursuits that could be better used for survival elsewhere). For example, when we ran a pub many years ago, we banned two very profitable (but troublesome) customers, and were very worried … but instead of a downturn in trade, we saw many new customers arrive who hadn’t wanted to use the pub while these two characters were at the bar!
For innovation you could perhaps:
- Listen closely to the feedback from the 20% of most profitable customers: what services do they want that you’re not providing … but could? What frustrations do they have that you could develop a service to sort out? Some of the best innovations come in times of stress and chaos: get ahead of the game! A good example of this would perhaps be a lawyers who also offered negotiation training and support … or an accountants that built a valuable business training and advice service.
- Look at the 20% of activities that you do that give you 80% of your profit: how could you offer add-on services to profit further? What are you really good at and how could those skills be used to generate new offers elsewhere? A good example of this was Dunlop, who used their rubber expertise, learned in tyres, to offer all sorts of different rubber products.
All these ideas come from the principles of ‘Slow Selling’: if you slow down and focus on listening to what your customer REALLY wants, and continually innovate by the inch, you can build an ever more robust and profitable business … no matter what’s happening in the world around you.
It’s all about:
- Wanting to be ‘remarkable’ as your main driver
- Building relationships with customers
- Continual adaptation and improvement, inch by inch, through effective systems
- And measures to keep you on your toes for the right reasons
And these principles work effectively for you, no matter what else is happening in the market because they’re common sense … but rarely common practice!
To listen to the Podcast on this subject, please click below:
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