Episode # 10 – Marketing in a Down Economy
About a year ago, Ingrid Cummings invited me to be a guest on her radio program Rubicon Salon. In the course of the hour, we talked about marketing, social media and staying ahead of your competition in an economic downturn.
While the entire program is too long for More Than a Few Words, I thought it would be fun to share a few excerpts over the next few weeks.
In this first segment, we talk some of the strategies small business owners can employ when the economy slows down.
From the interview: “When everyone is pulling back it is a wonderful time to invest. It is easier to look bigger then you are”
And now, as the economy is starting to pick up, those same strategies will work. Don’t wait for a full blown recovery, it will be too late. Start investing now!
Click here to listen to the interview
Shop Local!
As the internet makes the world seem smaller and smaller, it is easy to forget that you are part of a local business ecosystem. As you make purchase decisions you choices impact the local economy. If, like me you are concentrating in a specific community, hoping to generate revenue from the community, then you need to put money into that community.
As consumers, we have power. Use it to actively support the businesses you care about and force change in the ones we don’t. Seth Godin summed it up well when he said:
If you don’t like what an organization stands for, work actively to spread the word and force them to change
AND
If you will miss a product, a service, a book, a site or a professional when they close up shop, stand up, speak up and bring them masses of new business.
This was the theme of my presentation at Rainmakers last month. ( I just got the video links) . The video is in two parts and it contains a serious call to support local businesses.
With this local focus in mind, I thought I would share just a few of my favorite local restaurants. These are places I would miss if they were gone. . I hope you will consider voting with your dollars this holiday season, paying them a visit, and helping to build a strong local economy.
No links to websites sorry, but more importantly I have listed address so you can check them out yourself.
Ocean World on 86th Street and Ditch. Some of the best and most reasonably priced sushi in town. The food is so good it is easy to overlook the mediocre service. It is usually busy, but not overcrowded at lunch time, 1/2 prices specials on Sunday, and always a long wait on Friday night.
LaPeidad 6524 Cornell Ave – Great, authentic TexMex. Fast friendly service, good food, reasonable price. Nice outdoor dining when the weather permits. When I need a TexMex Fix this is my favorite.
Kona Jack – Meridian and 96th Street – Not to be confused with the Kona Grill chain in Clay Terrace. This Indy tradition has a wonderful, diverse fish menu, and even sells fresh fish for you to take home and prepare yourself. Sharing a kitchen with Daddy Jacks, you can often convince your waitress to serve something off the menu from the other side.
Santorini Greek Kitchen – 1417 Prospect Street, in Fountain Square – Well worth the trip to Fountain Square for the huge portions, home-style Greek food, and great service. It is also the only place in the city that makes Eggplant parmesan the way I like it – I think you will too.
These are just a few of my favorites. What are yours? List them here, and more importantly, pay them a visit this month!
Local Economic Ecosystem
At the October Rainmakers meeting, I had a chance to talk about my passion for LOCAL business and the impact we make every day with our purchase decisions.
This is just a short excerpt from the program, the rest of the presentation will be available on the Raincast soon.
The Local Economy – by Lorraine Ball from Dave Anderson on Vimeo.
Friends Don’t Let Friends Buy Starbucks
The other night, I think I surprised a number of people with my presentation at the Rainmakers Main Event. Folks in the audience who are familiar with my typically motivational, marketing and personal development messages, were introduced to my other passion : local business!
In a brief 15 minutes I advanced the argument that as business owners, we need to go out of my way to support other local business owners. If we don’t support and promote these companies, they may not be there when we need them.
Asking the audience to think about the companies they would miss if the businesses closed their doors tomorrow, I was surprised by the range of responses. From local coffee shops and resutants, to a neighborhood dry cleaner and a web hosting company it was clear we as a group depend on these local companies and need to do more to insure their success.
And it just isn’t enough to talk about it. We need to put our money where our mouth is, and shop local. If we are annoyed when the ICVA hires an Ohio based marketing firm, then we have to stop drinking at Starbucks and support our local coffee shops. Erik Deckers explains the cost of this choice in a follow up post he wrote Wednesday morning:
In fact, out of every dollar you spend at a local business, 40 cents of it stays in the community. When you spend a dollar at the big chain stores, 13 cents stays in the local economy.
Every time I have Starbucks, a the majority of my expenditure leaves the Indy economy and heads to Seattle. Now don’t get me wrong, I have nothing against the people of Seattle, but they aren’t sending me any money! So until I get a client from Seattle or those people simply start sending me money, I won’t be sending them any more! Look for me at LuLu’s and Hubbard and Craven instead.
Remember, Friends Don’t Let Friends Buy Starbucks!
Local Business is Key!
As an advocate of the Indianapolis Small Business Community, I am often frustrated when I see our city and state government spending money to support the large business community and ignoring this vital segment.
Most recently I read about Indianapolis investing in training companies how to do business with firms in Taiwan and increasing economic development activity focused on bringing more, bigger companies to Indy.
While important, I am frustrated by the mathematics. There are 65,000 small businesses in the Indianapolis metro area, with sales under $1 million. That is 65,000 chances for success!
This article by Jeff Stibel, from the Harvard Business Review suggests I might be right after all, and gives some very specific suggestions for outsourced execs considering a switch to small business ownership. He says:
- Action. This is an entrepreneur’s best weapon
- Planning is important. Plans aren’t.
- Innovative financing
- Give the people what they want
Rest, measure, refine, repeat
Pull Your Head Out of The Sand … Unless You Want to Be Buried There!
The ostrich is a strange creature. When frightened it will bury it’s head in the sand, convinced if it can’t see the danger, whatever is creating the threat can’t see it either. Over the last few months I have noticed a number of small business owners behaving like an ostrich. Instead of facing the challenging economy head on, the are hanging around with their heads buried in the sand, hoping they can ride it out!
But it doesn’t work. Hiding with your head in the sand is a good way to get run over, or simply miss an opportunity that comes along. Now more then ever, small businesses need to be making and executing growth plans, investing in their business and reaching out to existing customers and prospects.
Seth Godin touched 0n this topic in a post entitled Death Spiral as he cautioned small business owners against trying to shrink their way to greatness. He provides several examples of how companies sabotage their own survival by trying to cut back when things slow down:
The fish monger sees a decline in business, so they have less money to spend on upkeep and inventory, so they keep the fish a bit longer and don’t clean up as often, so of course, business declines and then they have even less money… Eventually, you have an empty, smelly fish store that’s out of business.
The doctor has fewer patients so he doesn’t invest as much in training or staff and so some other patients choose to leave which means that there are even fewer patients…
The newspaper has fewer advertisers, so they can’t invest as much in running stories, so people stop reading it, which means advertisers have less reason to advertise which leaves less money for stories…
What should you be doing? Invest now! Invest wisely, but spend some of your available cash on marketing, new product development, system development which will allow you to provide better or expanded services to your clients. As Seth says:
Right this minute, you still have some cash, some customers, some momentum… Instead of squandering it in a long, slow, death spiral, do something else.
Big Connections, Big Ideas!
On a regular basis people tell me people in Indiana aren’t as cool, hip, smart or interesting as people on the coasts. And I just don’t believe it. I have found some amazing, passionate, interesting people with life changing idea, right here in Indiana. And yesterday about 275 of them gathered at the Cabaret Theater for the Inaugural Smaller Indiana, Bigger Ideas Conference.
If you were there, please share your thoughts. If you weren’t here is just a taste of what you missed with some of my favorite quotes and thoughts from the day:
Scott Massey -
- Leaders need to be four things: Scout, Knower, Witness and Conduit
- The pace of change today should change how we think about ‘change.
- If your not doing something that is bigger than you, you may be wasting your time
- And an intriguing question for Scott: What constitutes work in a concept economy?
Jenni Devoe
- Your old customers want to cast you in your old mold. Want to change the direction of your business? Change your customers!
- You’re not going to get where you envision being if you don’t first take the time to envision being there
- Dream until you die
Mark Hill
- It is about mote than ideas. It is about execution
- Wishful thinking is the enemy of execution
- People that are successful are the people that do what they say they are going to do.
- Find something you’re passionate about and you’ll never have a job
Sally Brown
- Quoting Helen Keller: Life is a daring adventure or nothing at all
- Measure your success with something other than money
- Ask yourself four questions. What can you do? What should you do? What will you do? And How will you inspire others
David Forsell
- Life is a gift
- It wasn’t that David had less to say then the other speakers, I was just so wrapped in his story, that I stopped taking notes. I hope someone else will fill in the blanks
Ken Johnson
- If you are the smartest person you know, your circle is too small
- Then mentality of low expectations is all around us – Call for greatness!
And then there was more… Jon Ketzenberger and his panel left us with a few more thoughts but I was running out of steam. My favorite from the panel discussion:
- – We don’t have to embrace fear when we have the resources to embrace innovation.
And from some of the attendees:
- Jon Speer ( @creoquality) summed up the event in three words Passion, Connect, Execute
- Mike Magan ( mikemagan) Indiana is in the early stages of a positive transformation.
And along with the speakers and the panel, were the unexpected performances from the Indianapolis Ballet Company and “Married to Magic” performers from IndyFringe.
For more, check out the Twitter Stream at @ #SIBI and www.smallerindiana.com home page for the videos when they go live in the next few days!
Why I am Going to Smaller Indiana Bigger Ideas
Mike Magan stopped by the other day to talk to Andy and I about why we will be attending Smaller Indiana Bigger Ideas. Here is just a little of what we said.
It is going to be an amazing event. Will you be there?
Start Up Fuel
In the last few months I have seen a number of people write about the amount of innovation we can expect to come out of the current economic recession. Many people talk about necessity being the mother of invention and the shift from larger to small, and as I started reading about Y Combinator that I got a real glimpse of this incredible innovation in action.
In just a few years, Y Combinator has funded 150 different software and Web services startups, with small investments: $25,000. But more then the cash, it is the co-location of these firms, housed together at Y Combinator which I believe really makes the difference.
Scott Anthony, writing for the Harvard Business Review summarized four elements of their model which he believed were a cornerstone of their success:
- You can do a lot for a little. It amazes me when corporations complain that they lack adequate financial resources for innovation. With open source software, online market research tools, and the ability to create virtual prototypes, you can do a huge amount for $10,000. A lack of financial resources is very rarely a rate limiter.
- Tight windows enable “good enough” design. Most Y Combinator–funded companies are expected to release a version of their idea in less than 3 months. That tight time frame forces entrepreneurs to introduce “good enough” software packages that can then iterate in market. This approach contrasts to efforts by many companies to endlessly perfect ideas in a laboratory, only to fail the real test of being exposed to real market conditions.
- Business plans are nice, not necessary. Y Combinator doesn’t obsess over whether entrepreneurs have detailed business plans. Again, the focus is getting something out in the market to drive iteration and learning. After all, if you are trying to create a market, most of the material in a business plan is assumption-based anyway.
- Failure is an option. One of the benefits of the Y Combinator approach is it forces quick decision making — if the team can’t produce a prototype, or the prototype bombs in market, the end comes quickly. And the low, up-front investment makes it easier to wind down ideas. Corporations that say they lack resources often have those resources tied up in the wrong projects. Saying no is not a bad thing.
Maybe we need more Y Combinators – VC companies lead by former entrepreneur’s who will push, prod, and coax start ups, encourage them to share ideas, information and resources, and learn from each other. If small is the new big, then companies like Y Combinator are are the center of it all.
Recession Survival Strategy – Expand Your Marketing Department!
Sound crazy? Just as you are fighting to keep the lights on and all of your employees on the payroll, I come along and suggest that you expand your marketing department. But when things slow down, increasing your marketing activitiy is the most important thing you can do, but it doesn’t have to be more expensive!
In an article by Rosebeth Moss Kantor , the author suggests five smart strategies to expand your marketing department, without spending a lot more money by simply engaging everyone in your organization in the marketing effort. Several of her suggestions include looking inward and motivating your team:
- Increase customer contact and communication
- Start looking for new markets now
- Invest in employee moral
- Emphasize and reward small wins
- Stick with your values
I would expand this list by focusing on your referral partners as well. Schedule time to meet with other business owners who offer related services. Ask about their business, and look for ways to work together.
In recent days, we have begun to see glimmers of a recovery starting do these things now, and you will be prepared for the upswing in the market.
