Just as “a rising tide lifts all boats,” the extended period of economic growth over the past decade has given almost all businesses a free ride toward profitability. Now, however, the tide is ebbing and many companies are struggling to remain afloat.
Unfortunately, with customers and cash pouring in so easily for so long, many business owners have forgotten how to be competitive. After all, there was plenty of business to go around – let’s all share in the good times!
Well THAT party is over. It is time now to sharpen your competitive edge and ramp up your marketing in order to capture your share of the business that is out there. Let me correct that last statement: You need to capture your share plus a healthy chunk of your competition’s share in order to survive. And that means getting lean and mean and going on the attack.
What is the first thing weak competitors do when times get tough? They cut their prices. That is the first step on the road to insolvency. Recent reports confirm that retailers and automobile manufacturers who rushed to offer steep discounts earlier this year in order to attract shoppers are now paying an even steeper price in lost profits. Plus they have now conditioned customers to expect a sale, and reinforced their behavior by rewarding customers for waiting to make a purchase. Wrong, wrong, wrong.
The right way to approach the market is by differentiating your company, its products and services. When you convince customers that what you offer is different and better than anything else, you can rise above “commodity pricing” and stand a better chance of maintaining your profit margins.
But differentiation takes an investment in marketing. You must tell customers – both old and new – how good you are and how smart it is to do business with your company. Pull no punches, and don’t worry about hurting the feelings of your competitors. Keep hammering home the benefits of choosing your company in order to attract the attention – and money – of a wider range of customers.