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P.O. Box 1421 |
| Reid periodically writes articles on marketing,
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Even in a Recession People Buy Dog Food
How to make your business more recession-resistant
by Reid M. Neubert
The businesses that are hit hardest in a recession
are those that deal in "nice-to-haves." These are the discretionary purchases
such as dining out, entertainment, and vacations. Many people hold off
buying new clothes, a new car -- as Detroit well knows -- or the coolest
new electronics.
The must-haves continue to sell. People still buy toilet paper and dog
food. And it is not just consumers that cut back during downturns, businesses
do it as well. So, if you are not in the toilet paper or dog food business,
what do you do?
Often there are ways to position your business as a must-have rather than a nice-to-have. Or, at least move in that direction. Let me give you an example that is, admittedly, near and dear to my heart.
My significant other, Moira O'Sullivan, is an architectural color and design consultant. She helps home owners primarily, but also commercial property owners, contractors, architects, and interior decorators select interior and exterior colors and finishes. For home owners, having colors that work well with their furnishings, the style of architecture, and that flow well from room to room, enhances their enjoyment of their homes.
But, clearly, this is a nice-to-have service.
Another part of her service, however, is to help people selling properties fix them up so they show better. This involves not just color selection, but recommendations on removing or rearranging furniture, updating fixtures and such.
So, where is the must-have in all this? You have probably heard of home staging. Full-blown staging can involve a pretty extensive makeover of a house, including repainting, bringing in new furniture and objet d'art, and setting up rooms to show well and help hide a house's shortcomings. This can also cost thousands of dollars. An acquaintance of ours recently spent $10,000, in fact, to stage his $million-plus home he put on the market.
With property values depressed as they are now, staging is very much a nice-to-have service. It was much easier to justify spending $10,000 on staging when it might net you several times that much in the formerly hot real estate market.
Movin' On UpThe problem remains that many houses just don't show well even if they have been comfortable homes to live in. As a result, they sit on the market for months and months, and sell at a much reduced price when and if they do finally sell.
Most such homes can benefit immensely simply from freshening up, decluttering, and neutralizing – toning down things that are too taste-specific. It is next to impossible for homeowners to do this effectively for themselves, since they can't look at their homes through fresh eyes.
As I said, this is something Moira helps some clients with already, and I know from personal experience that she is very good at it. But she didn't think to positioning herself as a cost-saving alternative to staging. It was only after talking with a number of people in the industry that the light bulb went on.
Instead of spending thousands with a home staging company – which isn't an option for most home sellers these days – they can just invest in a few hours of Moira's consulting time. She recommends popular colors to enhance the home, and demonstrates how to rearrange or pare down the home's furnishings and decorations so that the home shows better and appeals to more prospective buyers. What a concept! Plus, for people who are not do-it-youselfers, she can bring in painters, handymen, and the like, to get the sprucing up done quickly and easily. How appealing is that?
By promoting this side of her business, she is able to move from just being seen as providing a nice-to-have service, to providing a very economical alternative to an expensive service. And without reducing her fees.
In terms of marketing, her target in promoting this service is different, too. She will concentrate on real estate agents in the area. They are the ones who recognize the need. When realtors are contacted by prospective sellers who have properties that needs some "TLC" to show well, they will now have Moira as the affordable alternative to full staging.
Move Over to Move Up
Sometimes repositioning something you already do can put you in a strong
competitive position you had not considered before. If your business
could use a boost in this down economy, I hope this example will
inspire you to consider ways you can move from being a nice-to-have
toward being a must-have.
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