Happy New Year?
Given the lackluster sales that most B-to-B catalogers are experiencing, many are wondering just how happy, or sad, 2009 will be. Clearly the marketplace has shifted in a way we've never seen before. But everyone knows one thing's for sure: The way you did things in the past won't be what you need to do in the future. The burning question is, “What do we do?”
The first thing is be brutally honest with yourself. I hear many companies that are in denial, believing business conditions miraculously will return "in a few months.” Forget it. What you see now will continue for 2009 and most of 2010, at least. Start thinking radical adjustments if you haven't already. Here are five tactics to consider.
- Outsource. You no longer can afford to perform activities that outside service bureaus can do better and cheaper. It just doesn't make sense to run a call center or handle programming, payroll and a host of other areas when there are service firms that specialize in your business area and perform these functions on behalf of 10 or more similar B-to-B catalog operations. "But our business is different" is often the refrain I hear, but you need to take a very close look at that justification. It's very likely you no longer can afford that bias. You must reduce your operating costs.
- Manage your risk. Most companies know their profit and loss statements fairly well, but what they don't understand is the level of risk they're taking in a down economy. What will happen if sales fall 5 percent, 10 percent or 15 percent? What about if your supply chain in China is disrupted (think food or toys) or costs increase dramatically? Where are the "shock points" that could put you under?
- Look for the bright spots. With a new president coming into office, there will be changes. Look for the bright spots, and adapt quickly. Infrastructure rebuilding, health care and renewable energy all look like potential bright spots. Also, the tectonic shifts in the lending industries will present new opportunities. Lenders and mortgage brokers are fast becoming loan medication officers and asset portfolio managers.
- Focus on the "must-haves," not the wants. Go through your product offering, and promote the items your customers must have to keep operating, not the discretionary items. Reposition offers with quick paybacks or lower prices. Give bonuses or rebates for loyalty and higher value orders. Your customers don't want to spend; you need to entice them further.
- Look for acquisition opportunities. As smaller competitors falter, you have the opportunity to acquire good assets at very reasonable prices. Stay alert and in touch with any acquisition prospects you have.
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