What to do in difficult times?
With business as difficult as it is for many, there is a temptation to attempt to pursue any and every opportunity, whether we are the best solution for them or they are going to be good for us or not.
If we are not the best solution for them we are doing the customer a disservice. If they are not good for us, ultimately, we are not helping ourselves and potentially storing up problems for the future. As a general rule of thumb,
If you wouldn’t have chosen to work with a particular customer or pursue a piece of business when times were good, don’t do it now!
Experience shows that this is rarely, if ever, a recipe for success.
It’s understandable that when times are tough it can be very seductive to pursue an “any business is better than no business” approach. Before you do, just take a step back and consider whether it is going to be good for you, either in the long or the short term.
The same applies to pricing. Offering lower prices, discounting on demand, extending payment terms, deferring payments all have an impact on your business that you shouldn’t underestimate. In tough times customers are much more risk averse, less willing to change and more likely to stay with those they know. They are disinclined to take risks and make decisions that may well be wrong and have major consequences for them (going to a cheaper supplier and ending up with quality or stock availability issues for example).
Like the temptation for us to pursue an “any business is good business” approach, they may be tempted by the low prices approach. Now more than ever, you need to understand the things the customer really values and the value that you can deliver. Ask customers about the things that they value right now – I can almost guarantee that it will be very different from the things they valued 4 – 5 months ago. Help them to recognise the risks of pursuing the cheapest prices and the impacts that could have on their business. Cheap prices do not always lead to lower costs – often quite the reverse. Make sure that your customers recognise that cost and price are two very different things.
You must be able to justify what you do, how you do it and what you charge for it. Focus on finding out what things your customer really values and is willing to pay for and demonstrate how you can help with this, rather than just dropping your price. What to do in difficult times? You could start by giving me a call!
Understand, create and deliver great customer value – and get paid for it!
If you want to book a meeting to discuss the challenges you might be facing right now, visit my diary: http://bit.ly/mikesdiary