First, with the new jobs added this month of 192,000 and unemployment steadying at 6.7%--and the Fed still doing the 0% dance for at least another year--how does a small business hope to survive and prosper?
Combine that with a second article discussing the "wages" issue (stagnant, etc) and a third article discussing consumer "staples" (toothpaste, detergent, feminine hygiene products, etc) offering unheard of discounts--six bottles of detergent for 30% less, or something like that--and we're talking a nickel and dime economy.
A business owner friend of mine who sells higher end home furnishings told me recently of a customer who shopped their store--then Home Depot and Nebraska Furniture Mart and my friend was $200 more than the competition for the same product.
His business is family-owned and have been in this market more than 30 years. "Well, at least we're pretty competitive", he said. But what more can he do to compete with customers who are spending less, demanding more value and nickel and diming him to death?
My similar experience occurred in selling some items on eBay recently--where I noticed how price sensitive the winning bidders were..."needs a $10 battery--it was dead--can you give me a partial refund"? Yes--on a $30 winning bid, why not? Sorry we had cold weather and battery may have died.
So, let's assume we're seeing an economic shift in globalization, technological advances replacing jobs (think robots at Amazon), fewer older baby boomers staying in the workforce due to being able to get healthcare now or being laid off, fired or long-term unemployed, and wages (if you're earning them growing at half of what they were)...then boomers who used to have disposable income are now choosing to spend less and perhaps dip into savings? Add to that gas prices, food price increases from weather related events--and we may be seeing a very tight economy.
So--how does your small business compete? Three observations I have as a take away:
1. If we're beginning to see discounting for basic "staples" in our home---paring your products and services to focus on not only most profitable--but even most "affordable" might be a good move. Not just mixing up your customer offerings--but focusing more on your most affordable items that you're still seeing in demand. Recently--at our Verlin Studio's online store (www.verlinstudios.com)--we saw an uptick in interest of our PhotoGift Services--where we'll enlarge, enhance and edit your existing digital photo and print them into 8x10, 11x14, etc. However--our $9.95 price point competes well with the big box stores--but we'll be charging in the $14.95-$19.95 range for 9x12 or larger due to us being more of a "specialty" artisan business. Will it work? That's what we'll find out.
2. Being unique, different, insanely great are more important than ever--as consumers are not willing perhaps to purchase as freely as they used to. More and better service is important, offering value is important--but offering something so unique is becoming more crucial. At Verlin Studio's--we began offering a free 8x10 signed and numbered print with purchase of $50 or more of our PhotoGifts--and we saw an immediate increase. Just think--six bottles of laundry detergent for 30% less--how can I offer value to keep and grow my customers?
3. Finally--take advantage of local marketing capabilities. Most media today offer some form of reaching their audiences "digitally"--in conjunction with their standard or traditional platform. Competition keeps these packages pretty affordable--and can make a good platform for your business to targets it's insanely great message to prospects. And don't overlook social media for local customers. I recently joined a Facebook group of people who grew up in my hometown--and responded to a bbq owners offer of a St. Patrick's day $9.99 special. I ended up spending $25 to support that business (ok, got a beer and dessert). They reached me on Facebook and have an on-going campaign of daily deals (much like I have for our Verlin Studio's products).
This is why our ad agency (www.ondemandadvertisingsolutions.com) focuses on helping small business owners combine "traditional" media with the new digital elements. Customers can be generated just like the good old days of media--but also measured in response thanks to the new digital analytics that are available.
Through these methods listed above--your business can still succeed in spite of economic headwinds--but it takes us to be more diligent and smarter about what we're doing to succeed.
I'd like to know your thoughts on our current economic situation and any successes your business has had. You can email me at jverlin1@yahoo.com.
If you liked this post--please share with your friends. If I may assist you--send me an email or check out our websites listed above!
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