By Robert Craven, MD of The Directors' Centre
Firms need to stop panicking and start taking positive action if they want to survive the downturn
Getting on the phone and actually talking to (potential) clients is brilliant — you get an insight into their world as well as how they see you.
When the recession started, my team asked me to roll my sleeves up and help out phoning potential clients for a seminar we were running. I was given lists of hot, warm and cold leads to contact, and it turned out to be a fascinating exercise. As anticipated, there is a lot of 'doom and gloom' out there.
I spoke predominantly to accountants and what are loosely described as 'professional service firms'.
What I learned about accountants and PSFs
One accountant said that they had "decided to focus on cost cutting and so the whole marketing budget was frozen". When I suggested a similar package but without any cost involved he said: “We don’t want to do any marketing even if it is free! We are focusing on cutting costs.” Curious - and a little bit stupid.
Another said: “I can tell you that marketing doesn’t work for us so we try not to do any.” More curious, and more stupid. Where does he think his existing customers come from? Marketing is not simply ads and promo; it is everything and anything you do that helps people to buy from you: everything from a word-of-mouth or referral campaign all the way through to a rebrand.
One said: “The last thing we want to do right now is go out and get more customers because then we would have to service them and I don’t think we could afford to do that.” Very curious, and very stupid.
Another said: “We’ll be too busy dealing with our year-end and it has been a lousy few months so that will be our priority for the time being.” Even more curious, and even more stupid.
What’s going on?
Am I losing the plot or are they?
I thought the whole point of being in business was to work with customers and clients. People use all sorts of excuses to get rid of a pushy salesperson but most of these quotes come from people who took my call because they vaguely knew me or my business.
Why are these people in business if they aren’t interested in getting more customers?
All the research talks about how customers inevitably leave you — 20% p.a. on average, according to Harvard Business School. This figure probably goes up in a recession, and it will definitely rise if you show no interest in them. What will happen if you don’t get new customers?
I find it incredulous that the majority of people I spoke to are only interested in battening down the hatches and hoping that they can survive the recession without too much pain. This is the strategy of an ostrich.
I worked with a large number of affected businesses during the foot and mouth epidemic...
The businesses that survived were those that sat down and literally planned their way out of it. And then took massive action. They looked at the options and made the tough decisions. I am not aware of any businesses that survived because of a simple stroke of luck. It is one thing doing well in a boom, but quite another in a recession. You need more than luck to survive in any economic climate. Right now plenty of businesses have run out of luck.
Don’t rely on luck. Sit down, probably with a trusted advisor, and take out a blank sheet of paper. Where are you now? Where are you going? How are you going to get there? What are the options? Ask the “what if...?” questions. Make the tough decisions. Don’t just wait and hope; death by a thousand cuts is humiliating for everyone concerned.
Hope is not a method. The first sign of madness is to keep on doing the same thing and expecting a different result. Is that you? Welcome to the asylum; there is probably only one way out and that is not via luck but bankruptcy! Stop dithering.
PS - I know that there are accountants out there who do want to deliver stunning remarkable service to their clients. Who are business people. Who do 'get it'. I just didn't speak to them on this occasion.
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