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![]() Romancing the Stone Cold Customer in the New Economy
By Vince DiCecco, President, Your Personal Business Trainer
How exactly does the new, post-recession customer behave? How might specialty graphics business owners woo them? These are questions every wise entrepreneur must consider. The nature of decision making for potential buyers seems to have changed forever. Customers will still buy from people they like, trust and with whom it is convenient to do business.
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By many accounts and indicators, the Great Recession is receding and the economy is finally moving again - but in what direction? Consumer prices are relatively flat, up less than one percent this year, and have not rebounded from where they were in July 2008. In 16 states and the District of Columbia, unemployment is more than 10 percent. Economists warn that any growth will be tentative, at best, and will become sustained only if consumers start spending more money. It took the government-backed Stimulus Act and "Cash for Clunkers" program at the end of 2009 to stifle inflation and jump-start the economy enough to generate a reversal in consumer spending and manufacturing production. But those programs ended and we are on our own again. How exactly does the new, post-recession customer behave? How might specialty graphics business owners woo them? These are questions every wise entrepreneur must consider. The nature of decision making for potential buyers seems to have changed forever. Customers will still buy from people they like, trust and with whom it is convenient to do business. But what they buy, when and how much will be drastically different than just a couple of years ago. In more prosperous times, shoppers splurged on $5 lattes and $200 blue jeans; retailers reacted by opening more stores and offering more choices. Today, consumers embrace frugality with a vengeance and are limiting their purchases to the essentials or the best deals. Succumbing to customers' demands for lower prices or offering deep discounts just to "move the goods" are not good strategies for long-term success in any business. The most logical alternative is to study and try to understand post-recession customers and adapt by finding ways to get them to think of you first when they are finally ready to purchase the goods and services you offer.
Who Are You? Belt-tightening in bad times is normal. But after every recession since World War II, penny-pinching quickly falls out of fashion as many Americans resume their thirst for new cars, new homes and everything on the cutting-edge of technology. This time, things are markedly different. As with the Great Depression in the 1930s, the Great Recession seems destined to convert many Americans into eternal coupon-clippers, scrimpers, savers and do-it-yourselfers. The redemption frequency of rebate offers - a practice that manufacturers count on to almost never be submitted - are at a record high. Today's average household has dug a debt hole over the past decade from which there is no easy way out. Many homeowners, if they have not yet lost their houses to foreclosure, owe more on the principle of their loans than the dwelling is worth. Consumer spending, which accounts for about 70 percent of the economy, is forecast by many market analysts to grow only weakly the rest of 2010 and into 2011. A study by research firm AlixPartners concluded that once a new post-recession "normal" settles in, Americans will spend at about 86 percent of their pre-downturn level. In an economy driven by consumption and job creation, the implications of this study are far reaching. For every kitchen not remodeled, there will be lost sales of appliances and cabinetry and fewer jobs for designers and contractors. As homeowners do work around the house themselves, there will be less work for handymen and gardeners. For every shopper who trades down from designer luxury stores to discount merchants, it will mean fewer profit dollars for retailers and manufacturers. Retailers will, predictably, offer fewer product choices and carry leaner inventories. They will also continue to reassess store locations and advertising. Frugality may be great for the family budget, but it is difficult for the national economy. I have painted a bleak picture here, but as Walter Cronkite said: "It is what it is." Uncertainty, fear of the unknown, a demand for greater value and selective loyalty seems like a perfect storm upon which to capitalize. However, as the customer's experience was critical to business survival before the recession, it will play a crucial role in business survival throughout the recovery. The worst illusion a business owner can have is that, in time, everything will revert to the way things used to be - but it will not. Though the future is uncertain, this much is clear: Businesses will need to develop and deliver greater value, a more pleasurable and memorable shopping experience and deeper emotional and sensory engagement with prospects and customers. Buyers will demand it, and they will severely penalize those vendors unable or unwilling to deliver it. We, as business owners, must be ready for it.
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What's the Frequency? As Dr. Phil McGraw asks: "How's that workin' for ya?" The post-recession customer wants you to talk with her, not at her. And it all begins with the frequency with which you initiate a sincere, mutually beneficial dialogue. During my sales and marketing seminars at regional trade shows, I often pose the following questions to attendees:
I offer the following rules of thumb to determine with what frequency it is appropriate for a particular specialty graphics business to contact clients and prospects:
The ultimate test as to how often you should initiate contact with customers and prospects is to ask yourself: "What lasting impression is my business leaving when it reaches out to communicate with our customers? Will my efforts cause them to seek me out when they are in the market for my goods and services? Will they think of me first and go out of their way to do business with us?"
The Right Thing to Do The intuitive and clever business owner or sales manager will insist that their sales people implement some of these disciplines and practices:
Vince DiCecco, owner of Your Personal Business Trainer, is a business development and training consultant based in the Atlanta suburb of Acworth, Georgia. With more than 30 years experience in sales, marketing and training, Vince offers a unique perspective on business and management issues. vince@ypbt.com This article appeared in the SGIA Journal, 3rdd Quarter 2010 Issue and is reprinted with permission. Copyright 2010 Specialty Graphic Imaging Association (www.sgia.org). All Rights Reserved.
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