Ten Tips to Competing in Challenging Times
|As we’ve all been reminded lately, business is cyclical. When your company enters a down period, it’s a good time to fine-tune your strategy to improve your chances for success. Here are 10 guidelines for doing just that.
|Know Your Company: Develop a clear vision for your organization. Define what it does, how it does it and what it stands for. Base your vision on a broader view of what your products or services actually are rather than just how they work. Since people buy solutions, articulate what problems you help solve. Communicate your vision consistently through advertising, packaging, pricing and customer-service policies.
|Know Your Customers: Define who buys and who influences the purchase of your product or service. Know who uses it and how it is used. Develop a process for tracking and reporting all relevant sales data. Find out what your customers and prospects want by asking them, either through informal polling or formal research studies.
|Know Your Competition: Learn everything you can about the competition, including their mission and objectives; how they position, manufacture, price and distribute; which markets they serve; and what their strengths and weaknesses are. Start by shopping your competitors, or asking your customers and suppliers about them. If the company is public, become a shareholder in order to gather information.
|Create a Competitive Advantage: Competing effectively in challenging times involves creating, managing and exploiting assets and skills that competitors find difficult to match or counter. Developing this advantage is a continuing process, not a fixed event. The key is to build unique core competencies that customers want, so you can leverage them to develop new products or go after new markets. This ability helps firms achieve economies of scale and scope across geographic areas and business units.
|Focus on Customers: Let dissatisfied customers know that their complaints don’t fall on deaf ears and that their problems are taken seriously. You can turn a negative customer experience into a positive one by sending a replacement item (or refund), along with a personal note of apology and some additional item of value. This unexpected extra – which can be a coupon, product or discount on a future purchase – can transform an unhappy customer into a loyal one.
|Build Customer Loyalty: Every business seeks satisfied customers who return again and again because they trust its product or service. Their repeat business comes at a much lower cost than that of someone who must be constantly enticed into buying.
In addition to working on core product and service attributes that build customer loyalty (such as treating each customer as a valued individual), businesses must work on such issues as instilling a helpful staff attitude, delivering on advertising promises, developing a favorable return policy and providing accurate product information.
|Target Market Segments: Divide your market into niches, segmenting it by age, income, product type, geography, buying patterns, customer needs, lifestyle and psychographics. Understand which segments have the greatest growth potential and which of your products/services serve them best. Emphasize these niches in your marketing efforts.
|Engage in Growth Initiatives: Identify opportunities such as geographic expansion or new target markets. Enter those markets using the most effective method (e.g., strategic alliance, outsourcing, direct). Where risks are high and/or adequate internal resources are unavailable, search for a partner who can join in developing a cooperative venture. Select partners with complementary resources and appropriate strategic intent.
|Create Buzz: Spread news about your products and services through marketing that moves, grows and persuades everyone it touches. A variety of devices can be used, including topical surveys or newsworthy events.
|Stay Flexible: Competing in challenging times requires a continuous rethinking of current strategies. Strategic flexibility gives any firm the ability to respond quickly to changing conditions and thereby develop and/or maintain a significant competitive edge.