1. Research the customer. Instead of burying your head in the sand, you need to know more than ever how consumers are redefining value and responding to the recession. Price elasticity curves are changing. Consumers take more time searching before purchasing and negotiate harder when they do purchase. With consumer products they are more willing to postpone purchases, trade down, or buy less. How does this affect wholesale door buyers? Now is the time to ask your customer's how you can help them by modifying your product offering. If you are cutting staff, are your customers willing to have an increased lead time for a price break? Or how about the opposite? Since you are slower, are you able to produce and ship your doors out more quickly so your customers can get their jobs installed and collect faster? Speak with your door buying customers to see if there is something your company can do to help them. This will keep them buying from you, and also a healthy and happy customer is a better paying customer.
2. Shift images and advertising. If you are still advertising why not cater your advertising to the current emotions within the market? When economic hard times set in, consumers seek comfort, images of home, warmth and safety. Please avoid any advertisements or promotions that seem desperate, frantic or unsafe. Nobody wants to do business with a company that is insecure or not healthy. Think carefully about what message you are sending to your clients.
3. Maintain marketing spending. Be cautious about cutting advertising or sales staff. One of the biggest mistakes is to stop promoting your company. Its a natural instinct to want to cut costs however this is the wrong place to cut. You may need to change your message or what you are promoting, however you should not give up all sales and marketing efforts at this time.
4. Adjust product portfolios. Your previous customers who sold budget kitchens to single family home developers will be super slow. Now look to:
- Hi-end apartments. They will be looking to cut costs from wood cabinets and may also be looking to upgrade away from white melamine doors and go up to a woodgrain slab thermofoil door.
- Refacers. Tile guys, countertop guys and many others will resort to expanding what work they are willing to do. This will create new customer opportunities that will buy doors from whomever gets to them and services them first. Think also of offering thermofoil with a phenolic or peel stick backing (note that Dackor stocks this).
- KB Dealers & Custom Cabinet guys. Yes you've sold to them in the past but remember that there are many ones who would never promote thermofoil doors in an up economy. Now the consumer is demanding them to cut costs so they may be more open minded to a thermofoil door Kitchen.
5. Support distributors. In uncertain times, no one wants to add new sales people. This could be an ideal time to set up new distributors who need to get their revenue up by taking on new products.
6. Adjust pricing tactics. Door buyers will be shopping around for the best deals. You do not necessarily have to cut list prices, but you may need to offer more temporary price promotions, reduce thresholds for quantity discounts and extend credit term durations to long-standing customers.
7. Stress market share. Certainly there are some companies who will not be able to stay in business, however there are others that could stay in business by taking the financial hit over the next few years. For those few but liquid companies who are willing to take a hit during the next year, they may come out even stronger on the back end. Many companies will be closing this year and it can be an ideal time to cut deals with former competitors. You can over take their market share by buying their customer list or turning your former competitors into commissioned reps. You can bet that if a door producer closes his doors that those customers will be willing to buy doors from this sales rep if he or she should go and work for a new and more stable company. Imagine your company growing this year as a result.
8. Emphasize core values. Now is also a good time to further cement your company's identity to your employees. It could be that you may have to lay off some people, however you should stress that its only to protect those who you have chosen to keep. Now is the time for managers or owners to spend more time with employees and customers, to maintain quality rather than cutting corners and servicing existing customers in a more precise way. Successful companies do not abandon their marketing strategies in a recession; they adapt them.
DACKOR: While other 3D Laminate companies are cutting colors, closing warehouses and cutting employees, Dackor will be adding 10 to 15 colors, re-vamping our brochures, literature and website. As a special promotion, we are willing to produce custom colors with as little as 600 Linear Yards. We are doing this by producing 3,000 Linear Yards, but only requiring your company to take 600 yards. I hope that as you read this that you start thinking of expanding your customer base, adding new colors and aggressively position your company so that you can join us in our pursuit to obtain market share during a down economy.
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