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Don't Just Survive, Dominate
People behave in contradictory ways during times of stress -- like a recession. However, recessions are part of business cycles, just like growth periods.
But what should you do differently? The answer is a lot, but not everything. If you have managed through recessions before, you may remember what to do, assuming you did the right things.
The secret is not to concentrate on survival. Instead, concentrate on taking steps to dominate the competition. When the recession ends and recovery comes, you'll be on top.
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PSI PLASTIC GRAPHICS
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TOP SHELF TIP NO. 59
"Be still when you have nothing to say; when genuine passion moves you, say what you've got to say."
D. H. Lawrence, English writer, 1885-1930 | |
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Today and tomorrow, Promotional Consultant Today will look at steps you can take to survive a recession, and dominate the competition.
Attack: By definition, a recession means negative growth, but that doesn't mean there's no business. There's just less, and it takes more effort to capture it. That's when domination comes into play. Get out there and get a larger share of the remaining business. Attack; don't defend. Be proactive, not reactive.
Customers: Sort customers in descending order of your annual revenues and profits -- also consider their potential. Get closer to the top customers and sell them more. Eliminate complexity added by bottom-dwelling customers; they cost more to keep than they yield in profits.
There are some winners in the middle who need attention, and losers who need to go -- now. Firing customers is always hard, but when the cost to serve them exceeds the profit they generate, money and time that could be used on better customers is wasted.
Products: Sort your products the same way, in descending order of annual revenue and profit. First, consider the items at the top. Where are they on the product life cycle -- new and still growing, or old and declining? Which have hit a plateau (neither growing nor declining)? Those will decline next. Now is the time to rejuvenate them or drop them. Reduce the complexity drain of old, tired products, dump them and make room for new ones.
Expenses: Quit spending. Cut all but truly essential expenses, but don't cut spending on new products and marketing; those are your future. Get rid of all the nice-but-not-necessary things -- temps, contract services, subscriptions, high-priced travel, parties, premium flights, expensive limos, hotels, and meals out -- at the company's expense.
Tomorrow we'll discuss cash flow, headcount and lowering the break-even.
Source: John L. Mariotti is the author of eight books business books and hundreds of articles and columns. He serves on several corporate boards, advises companies and does public speaking. The former president of Huffy Bicycles and Rubbermaid Office Products Group, he is president and CEO of The Enterprise Group. His newest book is The Complexity Crisis-Why Too Many Products, Markets & Customers Are Crippling Your Company -- And What To Do About It. | |
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Copyright 2005-2007 Promotional Consultant Today. All Rights Reserved. |
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