Retreat or Advance? What Should You Do in These Turbulent Times?
Warren Buffet recently said, “It’s wise to be greedy when others are fearful.” In recent conversations I’ve had with some B-to-B catalogers, I’ve found that some are aggressively planning to acquire faltering competitors and/or taking steps to grab market share. Just like the banking world, will the next two years bring rapid consolidation to the catalog industry? I think so.
Undoubtedly, the weaker companies will struggle in these tough times, and some will fail or be acquired. Where does that leave you? Should you position yourself to be acquired or be the one that acquires? Here are some things to think about when making that decision.
* No matter what side you ultimately end up on, now is the time to open the lines of communication with companies that you might partner with.
* Watch the mailing plans of your competitors and marketing partners for significant changes. If some competitors start mailing less, that might be the beginning of the end for them and a good time to broach the idea of joining forces.
* Keep tabs on companies that have filed for Chapter 11 bankruptcy protection. There may be a good opportunity to purchase assets and/or see what the ultimate market value of those comparable assets might be.
* Watch the divisions of larger B-to-B conglomerate companies. Such companies might be willing to spin off a division that doesn’t fit their new strategies.
* Review your own mailing plan. Is there an opportunity to test less expensive mail pieces and use the savings to increase prospecting? Do you have an opportunity to target the customers of your weak competitors?
* Review your outsourcing options. If business conditions worsen, develop a plan now on how to deal with it. One option is to outsource noncore functions. You should certainly know what those options are by now.
* Continue to watch your key competitors and suppliers closely. Watch what they do, not what they say. You don’t want to be caught off guard by a major move from either.
* Without alarming your management team, take it into your confidence and enroll each manager in watching key marketplace trends. It takes a group effort to keep tabs on what’s going on in the market, as things change fast.
Wild, Uncharted Ride Ahead
One thing’s for sure: The next year is going to be a wild ride like we’ve never seen before. It’s uncharted territory. We’ll need to keep our wits about us and, above all, have contingency plans in place and remain flexible.
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Terence Jukes is president of Ability Commerce, a 140-person firm that designs, builds and runs e-commerce and related marketing programs for catalog companies. He can be reached at TerryJ@AbilityCommerce.com.