Hard times bring opportunity

This article was written in 1990, in the middle of a severe recession. It’s message is universal . . .

The current uncertain economic circumstances are polarising the business community into two distinct groups — there are those who are suffering a potentially terminal downturn in trade and are adopting a pessimistic and somewhat resigned attitude to their troubles; and there are those who see that even though things are not good in traditional markets, opportunities exist which can be exploited.

When money is tight customers become more willing to abandon old loyalties and try new experiences

When money is tight customers become more willing to abandon old loyalties and try new experiences

A chance to grab new customers

Two particular opportunities come immediately to mind. The first is the chance to grab business that has traditionally belonged to others because of long standing customer loyalty. Bad times bring out the pragmatic and sometimes ruthless side of most people. When money is tight loyalty goes out the window. Business managers who are faced with cash flow problems critically examine all their expenses to see if there are any potential gains in either quality, service or value to be had.

It is unfortunate that it is easy to take a long standing customer for granted and not deliver the same degree of performance as you would if you were trying to win a new one. Take food supply contracts as a perfect example; how often in this industry do you see premium produce trotted out for the first few weeks, then a slow deterioration in quality from then on?

Familiarity can spoil the relationship

If old customers start to question your value for money, they become open to new experiences

If old customers start to question your value for money, they become open to new experiences

The same occurs with service based businesses. I know from my own experience that I tend to get the worst service from the businesses where I am good friends with the owner and am regarded as part of the furniture.

Some of my clients have commented on the ease with which they have recently wrested important new customers from old adversaries. In one case, a client had being trying to win a particular supply contract for four years — with a

spectacular lack of success in spite of many approaches. He got desperate and tried again, and was quite surprised at the different response. Today is a whole new ball game; past assumptions are not valid at the moment.

Your staff will accept change and work harder

The second opportunity comes with your own staff. They are likely to be well aware of such influential matters as rising unemployment and business failures, and be ready to re-negotiate old values. Good times tend to make people intractable. If they think the boss is doing all right they consider their performance to be adequate. When times are obviously bad staff tend to opt for the security of the job they currently hold, and are often prepared to give more in circumstances where they were previously intractable.

I have found that staff are quick to grasp the ramifications of the laws of supply and demand in a shrinking market. They can appreciate that if there are substantially more available seats than customers, somebody has to lose. They can also appreciate that the loser will usually be the one who gives the poorest value for money.

With hardship comes opportunity

Better quality, service and productivity can be achieved more easily now than in my working memory. I guess it is the difference between being seen to be greedy by demanding more in the good times, or battling for survival by demanding more in the bad times.

Talk to your people, ask for their ideas, seek their help. Go out and grab all the new business you can find. If your marketing isn’t working — DO SOMETHING ELSE! Bad times sort the true leaders from the pretenders; the pretenders go out of business.