When changes disrupt your business from market shifts in your industry, or from larger economic downturns, it is imperative that you re-assess the market’s response to your offerings that have been working prior to the disruption.
This means that you must ask these questions, as if you were starting your business anew:
What does the market need now? If your current offerings don’t fit the market’s need now, then you must either direct your offerings to alternative (often smaller or niched) markets that still want them, or shift your offerings to meet the general market’s new preferences.
What price will the market pay for your offerings now? Usually during a market or economic disruption, the market will pay less than before, or will not pay at all. You must determine the price tolerance of the “new normal” – no matter how long that condition lasts – and package your products and services in new ways to meet the price points the market is dictating.
What positioning will attract the market’s attention? With this information – what offerings at what price points – you can begin to re-think your positioning to your target market (the alternative market or the general market) to write the language and tag lines that will bring you customers and clients.
What value proposition will resonate with the market? With all of this – pricing, positioning and new offering packages – you can then create a value proposition to carry into the market that will create new opportunities.
For example, if you have a software development and consulting practice and your target market is no longer buying, adapt the software and your services to solve the pain in your key market, which will likely be focused on cost cutting, staff reduction, and whatever can increase profitability. Try to build into the new version of the software some technology that will replace or reduce your personal services to the client, to increase your own company’s margins.
Or, if you are a service business or a consultant, look at your clients’ pain points: Are they working longer hours with reduced staff? Increase your service hours and add pick up and delivery services for a premium charge. Do they need specific roles filled in the company rather than general consulting (but cannot afford a full time employee with benefits)? Offer to step in to fill a part-time tactical role for a fixed project fee or monthly charge. Look at all the expertise your company can offer, and broaden your offerings and how you deliver them.
Get flexible about pricing – experiment with ala carte, bundled, one time cost, subscription fees or retainers until the market says yes. Keep an eye on your margins, as it is your bottom line that will support you through the downturn, even if your top line dips.
Change your positioning and value proposition language to buzz words that touch the market’s fears and promise a solution that you can deliver. Focus on tactical deliverables and results: “profitability in the new economy” “cost reduction,” “unlimited services” and so on.
Apply these strategies to adapt your business to the new economic realities. Keep experimenting and testing various packages, price points, positioning and value propositions, until you find success.
In all, in a long recession, you can expect to work harder and longer and get less revenue for your trouble. That is what I am hearing everywhere. The point is to survive the recession in order to build again when the economy or marketplace turns back up.
I have written a much longer version of this blog with more detailed examples. If you would like a copy, please leave a comment here with your email address, or ping me at firstname.lastname@example.org/~joeyta5 and I will be glad to send it to you.