So what is so different about 2010 compared with say 2006. In this low growth economy, what new tactics are getting traction? In the next few blog postings I’ll explore some differences I’ve observed and some possible solutions that might work for you. I’ll refer to current research and war stories where I can.
The Annual Budget
2006: Building a budget had a certain optimism built into it. We made relative vague guesses about what made our customers happy. How wrong could we be?
2010: You are listening, monitoring, questioning constantly what makes your customers successful. And not just the general body of customers but specific individuals within your customers. Your first budget will reflect these insightful judgements of what products will work. Granular stories will drive the assumptions behind your spreadsheets. But you will apply agile thinking, small, fast iterations to lock onto your clients needs. You will deploy social media cleverly and cheaply to engage in conversations about what matters to this market. Your budget will be a constant evolving set of forecasts with bang up to date thinking from marketing, sales and R&D driving them.
2006: You talked a good game about value achieved for your clients but you knew you could win more clients with more marketing, trade shows, PR!
2010: It is now very expensive to win new clients. It’s noisy. Money is tight. Its very competitive. The people you are competing with have survived the worst recession in history. They are tough. Service your existing clients with great care. Invest heavily in their success. Understand in detail how your customers make their customers happy.
2006: Cash was plentiful, credit was easy to find. Look at these share buy back programs tracked by the WSJ of the S&P 500: 2007 $600 billion plus, 2008 $300 billion plus, 2009, $75 billion. That is some drop off!
2010: Cash hoarding to still alive and kicking. You need to create demand in the minds of your prospects. You need to present compelling ROIs. Make it easy for them to justify that expenditure. Show them hoarding cash at this stage of the cycle is risky not safe.
Visibility of Sales
2006: Sales lead times were manageable. Businesses were procuring products and services. There was an urgency to get stuff done. Order books were strong.
2010: You can’t find your prospect with a search warrant (thanks Jim)! Lead times are stretched. You need to diagnose carefully the symptoms of your clients. You need to translate that into harsh consequences. Simplify your messaging down for your clients into practical paths for instant gratification. But remember they need to believe 2 things; the issue you are describing affects them and secondly they need to believe you can solve their problem.
More observations in my next blog.
Give me your thoughts and observations.
Right on – these are good points. I would only add that compare to 2006 the much lowers costs and greater efficiencies of marketing and PR offset the lead times somewhat.
Also, at least in the software business, costs of development and infrastructure are lower primarily due to more efficient technologies and software tools, so that has a bit of an offset as well.
Great thoughts as always Ian. Everyone wants instant ROI or else! Procrastination has hit new heights – yikes. It requires even more drip marketing and a laser-like focus on four principle needs: make me money, save me money, save me time, or make me look/feel better. You have to fill two of these needs now to get the order. – cheers, Paul
Stas, marketing & PR comments well made, I’ll be highlighting some new research on social media in the next post.
I totally agree, you really need to be clear on the exact need you are addressing.
I had some other thoughts about your latest post. Specifically – what are the implications of the new economic environment and how to take advantage of it?
First, as you say – productivity demands are increasing and the cash is tight. This means that existing staff is already stretched thin-thin-thin. The most efficient way of improving productivity in these circumstances is to use tools that a) do increase productivity, and b) do not require much additional work from the existing headcount; or at least the additional work should have clear headcount demand estimates (example: “we need 2 hrs of your designer’s time a month”).
Second, this may mean that creating better packaging for a product is one of the greatest competitive advantages one can have. Example: “Here is our product; here is the implementation project plan; here is the milestone definitions and criteria; here are the workforce demand estimates; here are the progress reports you can show to your boss, updated weekly; here is the itemized budget entry for next year projections.” All accessible through a big fat button or simple, clear charts.
Third, fundamental plays have always been the best plays in business, but now they may be the only profitable plays. I can go ad nauseam on this one 🙂
Stas, keep them coming – I’m hoarding some good ones for my next post, Best, Ian