Upside Strategies in an Economic Downturn

It’s not hard to find bad economic news these days. Whether it is the flagging value of the dollar, higher unemployment, or inflationary pressures, there are plenty of sour economic indicators that can send even the most seasoned business owner into a panic.

In their book: The Performance Power Grid: The Proven Method to Create and Sustain Superior Organizational Performance, David F. Giannetto and Anthony Zecca provide a roadmap to help business owners weather an economic storm. While the information provided in the book can be useful during any economic condition, the tips provided are especially helpful during a downturn.

In business, only the strong survive.

Customers need a reason to spend their increasingly limited funds with your business rather than somewhere else. It is easy to forget that the competition is doing business in the same economic environment and suffering too. Take the opportunity to sharpen your business. Evaluate your value proposition. Ensure that you’re running your business in a financially responsible manner. Economic malady can also be a good focusing point to rally employees. The authors call it a “momentary unifying factor” where employees are able to set aside personal concerns and rally around a greater cause. By coaching employees to provide exceptional service, a business can keep valuable customers and ride out the downturn.

It may be time to grow

Because all companies are competing in the same environment, an economic downturn will mean that weaker companies will be cutting back, leaving opportunities in their wake. A savvy company will be watching for these opportunities to gain customers and market share. This often means expanding your marketing and advertising efforts so that customers who are left behind by other businesses know that your business is ready to meet their needs.

Remembering the difference between revenue and profit

In desperate times, it is easier to forget that all customers are not created equally. Business owners have a tendency to look at all customers as a source of revenue even though some are more profitable than others. Use the opportunity to evaluate your customers and the market segments that you target. Asking yourself what it costs to gain and keep different types of customers can be very telling when it comes to their impact on the bottom line. Focusing on catering to your most profitable customers and gaining more like them will help you correctly place emphasis on certain segments over other, less profitable ones and rebalance your customer portfolio.

By using the current climate to take stock, sharpen your business, and be poised to grow, you can not only ride out shaky economic times, but emerge a stronger, better company.