Bottom Line: How can your business avoid dramatic business swings? BLC's John Landsberg provides some tips in the current issue of KC Small Business Monthly. 02-15-2008 http://www.kcsmallbiz.com/february-2008/sales-marketing-avoiding-dramatic-business-swings.html Avoiding Dramatic Business Swings Rather than doing what you have always done, analyze the past year and adjust your marketing accordingly. By John Landsberg
A common problem business owners experience is how to even out all the frustrating ups and downs a business seems to experience on a monthly basis. First, while there is no one perfect answer, at the top of the list should be planning. It is amazing how little time many business owners spend analyzing various aspects of their business. Many say they simply do not have the luxury of spending hours analyzing things when they have 50 other hot issues to handle. Basic Questions for Planning But, planning is well worth the time and effort. Can you answer these basic questions off the top of your head?
What is the best month of the year for your business? Second best?
What is the worst month?
Who are your very best and worst customers?
If you can�t answer these simple questions, then you had better stop what you�re doing right now. This is February, so you still have time to effectively plan for 2008. The first thing you should do is examine your results from 2007 and 2006 to see any possible month-to-month trends. A simple spreadsheet of previous years� monthly sales will enable you to see your best and weakest months for revenues. Don�t simply rely on your gut feelings. You need to take an honest, realistic, bottom-line look at your business, and then you can take an informed plan of action. With the data in hand, you can start asking yourself a series of questions: What months were your best in terms of revenues? Anything you weren�t expecting? What were your low months in terms of revenues? What do you think caused the downturn in these months? The question about your best customers can be very revealing. Once you have identified them, your objective should be to make them even better customers. You can upsell to your best customers and reward them at the same time. How about designing a direct mail piece that offers a special �Thank You� for being a loyal customer and includes a discount or a special gift the next time they use your service? Customers love businesses where they feel appreciated. If they take advantage of your offer, you can show them new products or services. At the very least, your �Thank You� is a positive reminder to them of your business.
Make the Most of Current Customers A common myth is that businesses must constantly troll for new customers in order to grow. The truth is that your existing customers are your best option for growth. If they like the products and services your business provides, then they are much more likely to buy more from you. Sometimes businesses make a big sale and then promptly ignore that customer and, instead, put all their emphasis on getting new customers. That is absolutely the worst strategy possible. Acquiring a new customer is much more costly than upgrading an existing one. As an example, have you ever ordered something from a catalog? All of a sudden you are being bombarded with catalogs from that business (and sometimes others your name has been sold to). The catalog folks know that once you place an order it is extremely important for them to ship another catalog to you within a few weeks. They realize you have used them once and are likely to use them again if they can get their products in front of you again. On the other end of the spectrum, after examining your customers ask yourself if some of them simply are not worth the time and effort necessary to keep them happy and still be profitable. Sometimes it is better for all parties to simply part ways. Yes, sometimes a wise strategy is to �fire� certain customers.
Adjust Your Marketing to Reflect Business Cycles Once you have done some planning and research about your business, you might have to adjust your marketing planning to determine how to even things out throughout the year. If July is a down month, maybe you need to increase your advertising or public relations activities heading into it. But don�t stop there As noted earlier, a simple direct mail �Thank You� offer to customers can be delivered prior to a traditionally down month. Is there a local event during the month (e.g., civic, chamber of commerce or non-profit) where your business can participate? Are there any trade shows? How about contacting local community groups, such as the Kiwanis and Rotary, to see if you can be a guest speaker on a topic of interest to them? Is there something new your business could offer during the year that would even out the swings? In many areas lawn service businesses used to sit on their hands during the winter with employees basically doing minor repair work. Then many realized that with the equipment they had it would be easy to provide snow removal services. That evened out the down months. If you are a financial planner, you could offer a free financial analysis during a slow month. Restaurants might offer a free appetizer with a meal, car dealerships a free tire rotation. The key is to make the offer strong enough to overcome traditional customer inertia and get them in the door. Consider enhancing your existing Web site. A good Web site can generate sales and interest in your business on an almost 24/7 basis. It can be a tremendous sales channel and a very profitable one, but you must update it regularly. There is not one, easy panacea that will totally eliminate the ups and down swings all businesses experience during the year. But, with some strategic planning based on an analysis of your previous year(s), you can frequently level things out and reduce the frustration of your annual roller-coaster ride.
John Landsberg operates Bottom Line Communications, a Leawood-based marketing communications company (www.bottomlinecom.com). He also is an adjunct professor of marketing, consumer behavior and public relations at Baker University. You can reach him at
[email protected] or (913) 338-5760.
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