Change is great. We all love to see people try to improve things. Where
would we be without adventurers and risk-takers? If you are in search of
glory or wish to make a fortune, it obviously pays to be first.
Nevertheless, during an economic depression, it can happen that early
birds just get eaten first.
Prudence is crucially important
That does not mean that we should be
sceptical about innovation, but only that, when money is tight, it is
advisable to be extra careful. If you are running a business these days,
you are probably watching your cash-flow like a hawk. Well done. My
guess is that, right now, you need to make a major mistake like you need
a hole in your head.
Managing a company in recession mode
demands more of the ant than of the grasshopper in our souls. When the
market recovers, there will be plenty of time for taking bold risks. In
the meantime, a miser's frame of mind might be what you need to ensure
business survival. In my view, in difficult times, one should keep in
mind the following three principles:
Go for the easy catch
If you are running a specialist service
company in Minnesota, forget about the Chinese market for the moment.
Chances are that you'll be able to detect better opportunities if you
concentrate your attention on people next door. Transportation costs
money and communication takes time. In times of deep economic trouble, I
believe in focusing all efforts on the easiest markets and putting
aside, temporarily, risky expansion ideas.
Deliver high-quality work
If you are delivering services, such as painting houses,
what level of quality should you try to achieve? How often do you give
grounds of complaint to your customers? If your answer is never, you are
doing great. If not, that might be good news as well. Quality
improvements, as perceived by customers, often involve negligible costs
for business. Delivering impeccable quality saves you money. For this
reason, during an economic recession, I wouldn't recommend launching new
products with potential quality problems that might take you down
beyond hope of recovery.
Spend money wisely
An economic recession blurs the line between fixed and
variable costs, production and overhead. When money is tight, you need
to take immediate decisions about where your cash is going. Evaluating
every expenditure as an investment is a technique that brings about
outstanding results. Is your inventory going to make you a profit within
the next two months? Which steps of your process could be eliminated
without negative impact for customers? In periods of crisis, one should
eliminate investments in new technologies with long payback periods,
since they might eat up the cash that you need to survive right now.
When
you look around and see people going bankrupt, it is not unwise to
become risk-shy. Before you explore new countries, take a walk down the
street. Before you invest in new technology, make sure that you can
afford it. Before you take additional cargo, stabilize your ship. One
day, hopefully soon, the storm will be over and we will be able to go
back to plain sailing, bold innovation, and massive expansion.
For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living
[Text: http://johnvespasian.blogspot.com]
[Image by robstephaustralia under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]
"Love goes towards love, as schoolboys from their books," wrote
Shakespeare in Romeo and Juliet. Since the 17th century, times have
changed to remain essentially the same. Is it not a force akin to love
that moves customers in the direction of their favourite product? Or
spectators to watch every game of their preferred team?
The two primary success factors
Luckily
for us, modern men and women, hundred of years of accumulated science
have identified the keys to success in romantic and business
undertakings. Is it not high time to proclaim that marketing wisdom has
rendered Shakespeare's plays obsolete for didactic purposes?
Theatre
might continue to exist as harmless entertainment for summer nights,
but when it comes to learning dating and salesmanship, you are much
better served by the teachings of hard science. Won't you agree with me
that only fools would refuse to adopt a proven formula that knows no
contrary views? Here is my condensed version of modern marketing truth:
1. A clear idea of what you want
An entrepreneur promoting
a new product or service would be ill advised to walk around blindly
trying to convince everybody he meets to make a purchase. Most likely,
in that way, he would just waste his resources and make no sales at all.
Like
in dating, efficient salesmen establish minimum requirements for their
prospects. If you identify your prerequisites in advance, you will be
able to discard quickly anybody who doesn't hit the mark. Draw a sharp
picture of your target and focus your marketing energy like a laser.
2. Thoughtful persistence
Investors know that the
best kind of assets are those who produce long-term compound growth
with little risk. What you want to avoid is a situation where you must
continuously shift your money from place to place. Even if you manage to
make a decent return on your investment, the need to reinvent the wheel
every day will leave you too exhausted to enjoy life.
Effective
start-up marketing is about acquiring a few enthusiastic customers who
tell their friends about the unique experience that you can provide. In
the case of dating, it is even more important that uniqueness in the
being goes along with consistency in the telling. From this perspective,
dating is a one-number game and marketing is the same.
Anyway,
should the scientific formula fail, you can always go back to classical
theatre for inspiration. Marketing is, in a way, distilled philosophy,
an almost exact discipline as you know, or as Shakespeare wrote in his
most famous play: "Hang up philosophy, unless philosophy can make a
Juliet!"
For more information about rational living and personal development, I refer you to my book The 10 Principles of Rational Living
[Text: http://johnvespasian.blogspot.com]
[Image by SearchNetMedia under Creative Commons Attribution License. See the license terms under http://creativecommons.org/licenses/by/3.0/us]
