6 Tips For Gaining Market Share In A Tight Economy
Posted by Jason Lancaster on March 12, 2009 in Internet Marketing [ 0 Comments ]
During tough times, it’s easy for people to say “stay positive,” and it gets annoying after awhile. None of the people telling you “don’t worry, be happy” have to pay your mortgage. Still, I’m going to join the chorus and say that this recession has a silver lining. The reason: I know what it’s like to manage a business in a recession.
I had the opportunity to work in the domestic auto industry for most of the last 10 years, and I can tell you that domestic automakers have been in a steady decline since my first days all the way back in 1998. Granted, there were some exceptional points in time (the sales spike in late 2001, for example), but most of my days in domestic auto sales were marked by year over year declines, shrinking sales, and slimming margins. The domestic auto industry has been in a recession much longer than the US economy, and I can tell you that managing a business during a recession is tough, especially one with razor-thin margins.
Still, one of the most important lessons I took from my time in the car business was this one, simple fact: Even if the market as a whole is shrinking, your business can still grow by grabbing more market share.
A recession is a great time to gain market share – here’s why:
1. Mismanaged competitors will bleed customers. Poorly managed businesses can survive (and sometimes thrive) when the economy is booming. After all, there are plenty of opportunities available to cover-up bad practices during the good times. For the next 18-24 months, however, your poorly managed competitors will be coughing up customers left and right. Attack your marketplace by investing in new technology – develop a strong Internet marketing presence today and take advantage of your reeling competitors.
2. Customers use tough times to re-evaluate. During tough times, many people review each and every one of their expenses looking for ways to save. More and more people are using search engines to investigate their options and seek out alternatives. A search engine advertising campaign is a great tool for educating potential customers about the value that your company provides.
3. Customer service counts. During boom times, customer service isn’t necessarily essential to success. In boom times customers don’t have a lot of alternatives, so they’ll usually endure the occasional bad experience to get what they want. However, during a recession, customers have many options available and they don’t need to tolerate poor service. Can your customers (or potential customers) find your business online? Does your company web site provide useful information? Can someone contact you from your website? Are their emails being responded to quickly? If you’re answering “NO” to any of those questions, your customer service is lacking.
4. Your employees will do more. It’s human nature – when the economy is good, everyone relaxes. Your staff isn’t too concerned about job security, so they’re not always interested in taking on new responsibilities or working extra hours. During a recession, however, employees tend to look for ways to make themselves irreplaceable. Now is the time to ask your staff to do more.
5. Trimming the fat is easier. Every business has “fat.” Perhaps you have an employee or a vendor that consistently underwhelms. During boom times, it’s hard to sever that relationship because of your concerns about capacity and keeping momentum. During a recession, it’s much easier to get leaner, meaner, and more efficient. Cut loose employees and vendors that aren’t performing to your satisfaction. When it comes to advertising expenses, ask your advertisers one question – “How much business are you generating for me, exactly?” If they don’t have an answer for you, it’s time you looked at advertising online. Most Internet marketing firms can tell you exactly what your ad budget is accomplishing in terms of web site visitors, email leads, and phone calls.
6. There’s no better time to expand. It’s anathema to recommend business expansion during an economic slowdown, but I’ve seen many auto dealers expand or acquire competitors during tough times. The rationale is simple – during an economic boom, it’s difficult (and expensive) to expand. Hiring new employees, buying real estate, equipment, etc is always pricey when times are good. During a recession, however, things change. Hiring is much easier – you’ll be amazed at the quality of talent you find just sitting on the open market. Capital costs – like buying new equipment and expanding your office – are lower too. It takes guts to expand during a recession, but if you’ve got cash flow, a good product, and a good team, the long-term benefits can be immense.
The bottom line: By utilizing technology, emphasizing results, and improving customer service, your business can gain market share and grow – even in a recession.
Author Jason Lancaster is a Search Engine Expert and President of Spork Marketing, a Denver Internet marketing firm.