In the world of B-C (businesses selling to consumers), the winners are recognizing that the consumer is being forced to choose necessities over luxury items. Now, obviously there is a continuum on the spectrum between these two extremes, and a continuum that changes constantly as a given consumer’s income changes. For example, the consumer who has traded going to Starbucks for coffee to going to McDonalds for coffee has implicitly decided that Starbucks is a luxury item, but coffee is…for the time being….still a necessity. Another consumer, may decide that coffee itself is a luxury and give up drinking coffee entirely.
In the world of B-B (businesses selling to businesses), the winners are recognizing that their clients are in survival mode and are totally focused on helping their client to survive and prosper in these tough times.
Any businesses with an attitude that the world revolves around their needs is ripe for quickly becoming extinct.As is often the case with tough times, one needs to quickly get back to the basics. Serve the needs of your customers or clients well and you will be able to survive, thrive and even prosper in tough times.
You don’t have to take my word for it…you can already see it happening in the markets, both consumer and industrial. Which is why these really can be great times for those with the agility to embrace the changing market conditions.
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2 comments:
Where do you draw the line in helping your B2B customers succeed? We continue to give fast shipping and high in-stocks and competitive terms, but we cannot give into their credit demands every time. Do you have a quick set of do's and don'ts?
Thanks for your thoughtful post...a great illustration of why the downturn will test the mettle of all managers.
A couple of do's:
1) Thoroughly understand your competitive position, so that you don't bid against yourself.
2) Aggresively pursure new quality business so as remove the pressure to accept "bad" business.
3) Be relentless in continuously improving your own cost structure.
A couple of don'ts:
1) Don't compete on credit risk. Terms are one thing, but assuming increased credit risk is sure to put your company at risk at this time where so many companies are ailing.
2) Don't surrender to the tough times...embrace them! (The subject of my latest series.)
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