4 keys to executing successfully in tough economic times

Over the past 2 months companies have been besieged by uncertainty in both the global and local markets. In countless articles and news stories companies are given advice on how to scale back costs and survive, as well as how to keep pushing ahead, taking advantage of market uncertainty as your competitors fall by the wayside.

The fact is that great companies are built (and strengthened) in tough times, The difference is that the great companies figure out what's important to focus on, and they do just that - focus.

So, on what should companies focus? It’s our belief that there are 4 key activities that should be at the core of every company’s thinking and execution:

1. Improve Business Process
2. Enhance Competitive Capabilities
3. Understand Customer Acquisition
4. Retain Existing Customers
   

The truth is these 4 elements are rationally intuitive, and most people who are running a department, a division or a company would agree that these activities are core to achieving successful results, so no surprises there.

The challenge is that during the early phases of an economic upheaval people can sometimes become sidetracked, questioning their core values and looking for the silver bullet to get them through to the other side of an economic down turn.

Now is the time to regroup and focus, making sure that you are focusing on:

• Improving business processes - it's a fact that when times are good people become less efficient, and when the revenue is flowing, you just let it slide, making incremental improvements along the way because you are not under pressure to be efficient in everything you do.

Ask yourselves how many meetings you are having that pull people away from business development, client management or revenue generation, and whether you are using collaborative tools effectively to share information. Or are you running your business from spreadsheets and email that are hard to share, and what core business tools have you not updated in years because you were too busy to get them implemented?

Picking up a few hours a week per person in most companies can mean thousands of dollars in revenue efficiency and bottom-line profit.

• Enhancing competitive capabilities – companies will always have certain products or services which deliver more profit than others, and some customers that are more satisfied than others. The areas that you make the best profits and where you have the most satisfied customers represent your true competitive advantages.

In growth periods this can get a bit cloudy, because revenue is revenue and it is not often examined in great detail. In tough economic times it is imperative that you make the best profit that you can, and the only way to do that is to focus on your most competitive offerings. Sell always to your competitive strengths, invest money in improving them, and make sure your marketing message is clear about those strengths.

• Understanding client acquisition - there is always the 'perfect customer' for any company. The natural response to tough economic times can be to run out and try and build a new sales pipeline, bringing in as many new prospects as possible so that you feel you are making efforts in the face of adversity.

This can be a big time-waster unless you truly understand the attributes of your ‘perfect customer’. Being clear about the attributes of the right customer, and tracking and measuring those attributes, will optimise all of your sales and business development activities. The acquisition of the right customers affects every aspect of your business - profitability, capability improvement and reputation.

• Retaining and developing existing customers - because acquiring a customer involves a lot of work, the tendency is to think that the customers you have must be good and that keeping them all is important.

The fact is, that in order to have a great business you need customers that play to your competitive advantage. You must have customers that are profitable and buy into your concepts and ideas so that you can continue to invest in your business to improve your products and services. Although it may appear counter-intuitive, reducing customer levels can actually increase your profitability.

The next 6-12 months will require lots of hard work, and there will be lots of distractions as people and companies respond to the market conditions. The keys will be to stay focused, understand where you are in your business, and action the 4 elements above.

This will involve clear assessments of where your business is, and a review of the systems and tools that you are using to achieve results, But for those that can stay the course, the economy will work its way around and begin to improve, and you will be in an even better position to take advantage of the next growth phase.