May 10
21
Survive the Economy by Reading Between the Numbers
Every day I turn on the news, it seems there is another report about some company ready to lay off thousands of their workers. While it may not be the worst times there ever were, there’s no denying that the economy is throwing some tough challenges our way to keep our businesses going. Big business, small business — no one is exempt.
I’ve recently received an increasing number of emails from micro business owners and independents sharing the many fears that come with such economic uncertainty. While there is no one-size-fits-all solution to survive the downturn, a good place to start is to “read between the numbers.”
How?
We are all quick to notice that the economy is affecting profits. Yet, it’s important to identify what’s really going on by examining the numbers of your own sales reports more closely. Compare your most recent report to one that was more profitable, then ask yourself questions like:
- Am I making fewer sales-per-customer?
- Am I making the same average sale-per-customer, but getting fewer customers?
- What products or services attract the majority of sales?
- What products or services attract the least amount of sales?
- How much business came from new customers? Where did those new customers come from? What are they buying?
- How much business came from repeat customers? How often do those repeat customers come back? What are they buying?
- What promotions spiked sales, but resulted in minimal profits?
- What promotions contributed to my greatest profits?
Gathering and comparing this kind of information puts control back into your hands.
Then what?
The worst thing you can do is sit back and hope the economy will turn back in your favor. The best thing you can do is take action and move your business in the direction your research points you. Armed with this comparison information you can:
Reassess what your customers are doing. Customers and clients are moving targets. What they wanted yesterday may not be what they want tomorrow. Ask yourself:
- Does my target customer still exist?
- Can that target customer still afford, or still want, what I have to offer?
- Has a different target market emerged BECAUSE of the changed economy? If so, how can I revise my marketing strategy to reach them?
Reassess what you’re doing. Are the products and services you offer still valuable to your target market? The products and services you offer must be valuable to your customers. If they aren’t, no amount of promotion will significantly change the numbers you found on your profit and loss statement. Ask yourself:
- What product/service do I count on for the majority of sales? Has there been a significant decline in demand for this product/service?
- How can I update, add to, or reposition this product/service to add value for the customer?
- If I can’t, is there a secondary product/service that is a potential candidate for becoming the primary?
Implement change. By reassessing your target market and your products / services, you’ll be able to determine what, if any, changes need to be made to get your business back on track. Do you need to:
- Change your target market to better fit your products and services?
- Change your products and services to better fit your target market?
- Change your methods for reaching – and keeping – new and repeat customers?
Being able to ask yourself honest questions and adapt to the changes you can’t control, by implementing changes you can control, will keep your business strong, and force you into practicing the kind of flexibility needed for long-term existence – and growth.
I’ll be first to admit that I’d rather devise some incredibly creative marketing promotion than stare at and analyze numbers all day. Yet, I’m also willing to concede that, by taking the time to ‘read between the numbers’, that creative marketing promotion is destined to bring in far more profitable results in a challenging economy.
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