Like all of you, I’m familiar with the word “recession”. My community hasn’t been hit as hard as some others but even here, jobs have been lost and budgets torn asunder. There’s no question that it’s going to take time to recoup and recover from the pillage of those in power within the financial and housing markets. Greed, an unsatible desire for profits, and a total lack of caring for those who may be hurt are, unfortunately, part of the American way
As a result, Americans have become more conservative in their spending — which is not a bad thing. Those of us, who are old enough to remember the days when your every whim and desire couldn’t be added to a credit card or purchased for nothing down, are shaking our heads as we say “we told you so.”
But all these changes–which any intelligent person could have seen coming–don’t mean that every business is in a “hide the cash under the mattress and wait it out” mode. As a matter of fact, the great depression, as well as other times of recession, have proven that companies which are proactive during a recession come out far ahead of those companies that adopt a “hold it steady and wait and see” attitude.
We have to remember that a recession doesn’t mean that people stop buying. It means that the blinders of “easy credit” have been removed from their eyes and they are more cautious about what they buy. Value for their dollar is suddenly important to them. But what is value?
Value is diferent things to different people. It could be a purchase with a discount. For another person, it could mean buying a product or gift basket that is easy to order, looks like it’s worth what they paid for it, and is delivered promptly with no hassles. What we, as business owners, have to determine is what our customers see as “real value” and then give it to them.
Customers will continue buying gifts even in a down economy. They still like to say Thank You, Welcome to that new baby, Get Well, Happy Birthday, and even I Miss You. But they look more carefully at what they buy and they look for a gift that gives them the biggest bang for their buck while being able to keep some of those bucks in their wallet.
“Ah,” you may be thinking, “I’ll just cut prices and downsize my profits.” But cheap isn’t the answer. Value is the answer. Even in a down economy, people are still buying expensive gifts when it is important to them and when they feel the value is there. These people may be using coupons at the grocery store for the first time, cutting back on going to the movies or out to dinner, but they are willing to pay more for a gift that makes them look good or feel appreciated. Consumers don’t stop buying in a recession. They just need to know that what they are receiving for their money is going to be worth it to them.
In order to provide this “value”, we have to look at our own businesses and see what we can do differently. Trimming our inventory levels and buying products that enable us to create baskets that offer value is necessary. Looking at our expenses and determining how we can control them while still offering high levels of service is important. Thinking more about your customer’s needs and desires should be at the fore front of your marketing.
Your job as a smart business owner is to provide value and convince your customers that it exists. If you can do that, profits are still here to be had.
Your comments to any of these posts are always welcomed.