How Has the Economy Changed Your Approach?

I am not an economist, but as an entrepreneur relying on the spend of other entrepreneurs I would have to say that faith in the economy has not yet arrived.

Everyone I speak with says things are great ‘considering’ and yet I watch as they hesitate to hire, market or invest in their companies. A few cocktails later and I might hear just how much their business has fallen off.

Panic Pieces

I also receive marketing pieces through email, tweets and snail mail that I refer to as Panic Pieces. They are emails screaming "PLEASE BUY FROM ME" or offering "GREAT VALUE FOR LOW PRICES". The language used in these marketing campaigns smell of panic. As a potential customer, I immediately pull back with a vision of a wild animal trapped, wounded, and who would certainly bite a helping hand.

I believe that if one sees a company willing to sell off its inventory at reduced prices, one might jump in and reap the savings. If however, someone is offering lower prices for their time and expertise, then the value is immediately questioned.

We are becoming smarter shoppers and bargain hunters for tangible items. Service however remains one of those areas where you might shop price and use that market information to negotiate. However, when it comes to making a buy decision, cost is often not the deciding factor.

Service is something customers are unwilling to compromise. Restaurant week in NYC is a perfect example when throngs of diners set out to experience the epicurean delights of the city’s best restaurants at a fraction of the price. These diners knowing full well that they were getting a great discount, still would not tolerate any slight in either table service or food quality.

So why would business owners result to panic marketing? Struggling firms are doing what they believe is ‘what ever it takes’ to generate cash flow. But I question the judgment of pursuing cash flow that eats into profitability. It might prolong the death throws but will certainly bury you just the same, and maybe even deeper.

Business owners vs. Entrepreneurs

Tough times call for tough choices. Cutting costs and eliminating expenses are prudent acts of sound business practice, just as increasing sales and marketing are. Actually, these are prudent practices even in a strong economy.

Business owners selling below cost to keep the cash flowing might be executing a really bad idea. If your marketing looks like, sounds like, and smells like panic, you invite vultures (not clients) into your business. If these are not your best customers then it might not be a good idea to send these types of marketing messages.

An entrepreneur might take a different approach. A hard analysis of their business model and recalculate or even reinvent offerings. Maybe survey customers to uncover unmet needs, discover problems they face and create solutions. If not surveys, then calculated informal interviews to uncover opportunities.

Make it a point to meet once a week with your sales and service teams, mentors, friends and even customers to brainstorm new revenue streams or new models for efficiencies to deliver your current goods and services.

Now is the time to dream, not scream!