All businessmen and businesswomen recognize that when the economy is growing customers buy and businesses expand, creating new sales opportunities. However, sales opportunities exist in a declining market, too. When businesses and government agencies cut back they look for ways to save money.
As a small business, to succeed in a declining market you must be willing to make a few changes. The following are a few ideas you may want to consider.
- One-Down the competitions by cutting out features to provide a lower-priced option.
- Use your speed as a small business to respond to changing conditions and opportunities more quickly than your larger and slower competitors where decisions and execution take much longer in what I call leveraging your underdog strategy.
- If you offer a product or service with high operating leverage (low variable costs) consider offer customers an all-you-can-eat plan so they can have one price and no consequences for using more of it.
- If you don’t already offer volume discounts, considering allowing customers to buy in bulk. This saves them not only costs but the logistics to making multiple purchases.
- Offer “buy three get one free” offers as an incentive to encourage customers to save by buying in higher volumes to get the discount.
During a declining market, companies and government agencies also cut costs by consolidating and outsourcing non-key functions.
- Look for ways that any service offerings can be extended to a new customer base looking to outsource a function previously performed in-house.
Finally, make sure your own house is in order financially. Your goal should be to survive an economic downturn as a bad economy kills off poorly managed or over-extended businesses.
Are any of your competitors about to go under and release their customers into the market?
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