“If we don’t change, we don’t grow. If we don’t grow, we aren’t really living.” Gail Sheehy
Column by Phillip Chichoni
Deep in the Serengeti jungle, the game of survival plays out to the extreme. In the summer months of January to March, the rains keep the grass lush and green, providing plenty of food for calving wildebeest. Lions literally grow fat as young wildebeest are ready meals, with no need to even hunt.
As the dry season approaches, the grass eating wildebeest herds start moving, on the famous great migration, looking for fresh grasslands. They travel more than 500 kilometres North West, crossing dangerous crocodile-infested rivers and deep gulleys. The lions remain behind. Unfortunately, the once plentiful wildebeest and gazelle are no longer there to provide food. Tougher species of herbivores remain, such as buffalo, giraffe and elephant. These animals don’t have lots of babies that lions can feed on. To survive, the lions have to change their strategy. This time they have to take on the big game, using stealthy and co-operation, even between enemy prides that don’t see eye to eye when things are good.
When a brutally competitive business environment meets a soft economy, entrepreneurs find themselves like lions in the dry Serengeti. It is no longer business as usual. Fresh strategies are needed to survive.
In 2009, the New Zealand Department of Trade commissioned a research project to look into the tactics and strategies used by firms to survive and prosper during recessionary periods. The resulting report entitled, Changing the Game: Recession Survival Strategies, discovered 13 global firms that emerged strongly from three different recessionary periods and revealed seven key factors that seemed to have the greatest impact on their ability to do so. A link to the report is available at my website.
One of the key factors I found eye-opening is that of increased advertising and marketing. Nearly all firms studied in the research maintained or even increased their marketing and advertising efforts during a downturn. This is an area where many firms seek to cut back on their costs. But these companies effectively used advertising and marketing to help weather downturns and strengthen demand for their core products. Cutting costs is a reasonable reaction for difficult times and marketing is usually one of the first to go as it is not viewed by many entrepreneurs as a necessity.
A study by Profit Impact of Marketing Strategy (PIMS) researchers showed that companies that increased marketing spending during a recession gained market share three times as fast during the recovery compared to companies that cut spending. Consumers don’t totally stop spending when times are tough, they buy smarter and wisely, looking hard for good deals and good value.
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Fresh strategy: targeted marketing is not expensive To survive and grow in this changing economy, you don’t necessarily have to spend big bucks on expensive advertising and marketing campaigns. The internet has equalised the playing field between big players and smaller businesses. What you really need is targeted marketing.
Traditional marketing is aimed at the masses, broadcast to everyone in the hope that some might respond and buy your products. This is wasteful.
With the internet and its various tools, a small business can reach only those customers who are interested in the product or service being offered. This focused approach reduces waste. Look at the metrics: the 10% rule of thumb that applies in marketing. It says, on average, if you broadcast your marketing message to a population of one million, 10% will see it, that is 100 000 people. Of these, 10% will show interest, that is 10 000 people. Then 1 000 will actively respond or request for more information or price. Finally 100 will buy.
Unless you are selling to everyone, like Econet or Coca-Cola, this strategy is inefficient and expensive. With the internet, instead of sending out your marketing message to potential customers, it becomes the other way round: customers actually look for you and your product. Internet companies like Google have grown tremendously because of their ability to connect customers to suppliers. In the developed world, most people actually Google in order to compare products before choosing the one to buy. Many buy things they see being praised by their friends and family on social networks. In this country, with the advent of affordable broadband and smartphones, the trend is quickly catching up. Use the internet to market your products If customers look for suppliers of your product line, will they find you on Google? A website is now as basic as a phone number. And the costs of having and maintaining one are now so low that everyone can own one.
I have developed a new eBook with more information and fresh strategies on this topic. A half-day seminar on the same theme is scheduled in Harare on December 19. The eBook is entitled Accelerate Your Growth in 2013: Create an effective marketing action plan to drive sales. People on my mailing list have already received a copy by email; if you haven’t received it, you can join the list at my website or you can send me an email.
- Phillip Chichoni is a strategic business planning consultant who works with entrepreneurs and growing businesses. You may contact him by email on [email protected], or visit http://smebusinesslink.com.
