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Don’cha Wish I’d Shut Up About CRELoaded?
Some things have gone on behind the scenes. One small improvement has occurred, along with some other troubling things. We take heart from the improvement, worry at the indicators that things are still very much up in the air where the future of this much needed software is concerned.
Some shakeups in leadership. Unknown what the effects will be.
Some forum members reinstated. This is a good thing, and they’ve come back in and are posting without recriminations. A hearty cheer for greatpcs (Jason over at Hoosier Web Design), and discounttools (Jody – sorry don’t know your major business name). I’m sure some others I do not know well enough to know about.
So, it is with great trepidation that I release a report, of sorts, which is a listing of recommendations. I’m releasing this publicly for two reasons:
1. I don’t have the ear of anyone at CRE anymore. This is a way to put this out there so it can be received in whatever spirit they choose to receive it in, or they can reject it outright.
2. I think there are great lessons to be learned about the Open Source world, and about treating your customers well, developing a project, targeting a market, support and service, and cost containment. In presenting my conclusions about what should be done, publicly, I am not just complaining and listing problems. I am giving the other half of the lesson – not just what should NOT be done, but how it might be done better, to overcome both the long term problems of the company, and the newer ones precipitated by a misguided attempt to overcome the earlier ones!
I don’t know all the inside scoop at CRE. But I know what is happening on the outside, and what those things mean must be happening on the inside. All recommendations are based on the problems I see. I’d assume there are other problems under the surface which I cannot address.
You may download the CRELoaded Recommendations PDF HERE.
I don’t expect them to like it. I don’t expect everyone in the CRE user base to applaud what I have to say either. But experience tells me my recommendations are sound, sustainable, and completely achievable, and that implementing them will turn the project around in the way it needs to be in order to not just survive, but to thrive.
I hereby throw it to the wolves.
Note: The opinions expressed in this post and in the attached report are the perceptions of the writer, and should not be interpreted or quoted as fact without corroborrating evidence.
Recession Survival Tactics – Outsourcing
Part 6 of a 6 Part Series on Recession Survival
Outsourcing has a couple of applications within recession survival. It can help to manage growth more fluidly if you manage to continue to grow, or it can help you in downsizing if that is what you need to do.
Now, first, I have to make one thing clear. You hear all the time that it makes more sense to hire someone to do something if they can do it faster and more efficiently. The example is given that if you bill at $45 per hour, then you can save if you pay an outsourced subcontractor $25 per hour to do the job instead.
That ONLY works IF you have MORE profitable things to do in the same time! If you do not have enough work, outsourcing only saves money if it saves you from costly errors, or helps you make a leap forward in your business that you could not make without the service or which simply yield a higher result when done professionally (marketing, website services, printing services, etc). Otherwise, you really have no choice but to do it yourself, even if it does take you more time.
Outsourcing can help you find automation solutions (you can hire a professional to help you devise them, or to create or install them for you), it can help you create templates that you may not know how to create yourself, and it can help you handle work overflow (so you do not lose clients), without having to hire an employee.
If your business is scaling back, you can either offer a work at home option to your employee, and keep them on part time, or you can move to outsourcing to at least keep the services and preserve as much of the business as possible.
When you have a chance at something that you cannot otherwise handle yourself, or which you lack the expertise to do completely, you can find skilled subcontractors to help you with parts of the job.
If your services need to change in ways that offer different combinations of tasks than you previously offered, and you are not skilled in all of them, you can collaborate with other professionals to be able to offer something more. It is better to get $400 from a $500 contract than it is to not be able to GET the contract. In this way, outsourcing can help you be more flexible, to meet a wider variety of needs in changing circumstances.
Usually, outsourcing is built on a backbone of networking relationships. When you work with subcontractors, you develop a mutually beneficial business relationship. It often ends up being one where you refer other work to them, and they refer work back to you. It helps you build a network of people who know you, who know your work standards, and who are happy to refer others to you. Since they know you, they can speak with conviction when giving the referral, and that goes further than referrals from people who have not actually worked with you.
It won’t be a solution for everyone, but it can be a valuable tool in managing work loads, and in being able to supplement your skills with other specialized skills when needed.
Recession Survival Tactics – Automation and Systemization
Part 5 of a 6 Part Series on Recession Survival
One key to saving money, and giving your customers higher value in a recession, is to systemize and automate where possible.There is NO BUSINESS which cannot benefit at some point from systemization or automation.
It may be as simple as creating a routine to do repetitive tasks faster. It may involve creating a template to start with each time you write a contract or proposal, or for producing products, documents, or other items. If you do something once a week, or more, you can usually find a way to make it faster.
Automation is something that can be implemented in a website, or through online services, or through use of the right tools in the office. It is one of the keys to breaking through to new levels of profit and getting past some of your time barriers, but it can also be a key to retaining high value while containing costs for your customers or clients.
For small businesses though, it is important that you automate the right things, and in the right way. There are three basic keys to good automation:
1. It should save you more time than it costs you. Done at the wrong time (too soon), or with the wrong tools, you’ll spend more time setting up and maintaining the automation than you’ll save. So think about the long term tasks involved before you jump in, or you’ll just bury yourself.
2. It should NEVER negatively affect your unique selling proposition, and it should not harm your customer relations. Good automation preserves what is unique about your business. It allows you to automate the IMPERSONAL parts of the business, while retaining the essential elements of personal contact or custom service that may define your business. This is especially critical for small businesses, because this is often what allows you to compete with larger companies that are fully automated.
3. It should save you time, while simultaneously enhancing your ability to deliver consistent and high quality service or products to your customers. The point here is that it should make business better for THEM, too. Done right, it makes your business better, and is not something that lessens quality or availability.
Some of this can be done through a website, and often it can save you money over other options.
Some can be done with free software – either on your desktop, or installed into your hosting space.
Some can be done through purchase of hardware or equipment in your office.
Some can be done with templates or other tools that you make, which eliminate the repetitive steps in a process.
Time can be saved simply by devising routines, or systems, for getting tasks done, that shave off time. Not “automation” per-se, but more of an assembly line procedure where you work from templates, start with the same base each time, or work out the fastest way to do something, then do it that way every time. Often, this lays the groundwork for automation, because it helps us spot the repetitive tasks that CAN be automated without harming quality.
Automation and systemization are one of the things that help you achieve extraordinary results, either in growth, uniqueness in your business, or in offering higher value for less money. In a recession, all of these aspects can be part of defining the success potentials and making you an exception in the sea of losses.
Recession Survival Tactics – Economizing
Part 4 of a 6 Part Recession Survival Series
I live in a double wide mobile home. I do not plan to move any time soon. Why? Because in 9 months, it will be paid for. The house payment even now is low. The house meets our needs, houses our business, and does not interfere with our ability to succeed. Since our business is conducted on the phone, by email, or in person in other locations, it does not harm our business success. It allows us to reduce our operating expenses considerably.
When looking at where to economize, you want to make sure that the economies do not harm your ability to effectively conduct business. If we held appointments in our home, we’d have to have a better house. The point being, use what works for your business.
Here are some ideas, in no particular order:
1. Refill ink cartridges. This works great for color ink, for some printers. It does NOT work well for black ink, the refill ink tends to bleed and feather.
2. Buy in bulk where you can. Share purchases with another business owner if you need to.
3. Recycle shipping boxes and materials. Make it a badge of honor by creating a 3X4 label that says, “This box proudly recycled by (company name.”
4. Use flat rate long distance. Try Qwest for Small Business. Only use internet phone service if it is good quality with your connection.
5. Make sure your website is functioning in all the ways it can to save you money.
6. Review all of your utilities and see if there are ways to cut them. A little caulk or weatherstripping can save on energy bills.
7. Consolidate business travel. Keep trips to a minimum. Tell clients that you are combining appointments to conserve energy. They’ll get it.
8. Stock up on closeouts and sales of items you regularly need.
9. Look for alternatives for your most expensive supplies.
10. Buy more RAM for a slow computer, instead of getting a new computer. Get a pro to help you clean up the hard drive, trim down unneeded programs, or scan for malware.
11. Postpone haircuts for 1-2 weeks longer. Wear just a little less makeup. Use a dollop less shampoo. Wear pants an extra day before washing. All of these things reflect on business, even though they aren’t precisely business expenses, but they can often be nudged a bit without causing negative effects.
12. Go paperless as often as possible. You’ll save on paper and ink.
13. Look for Free and Open Source software first – There is a ton of really good free stuff out there, for basic business purposes, and specialized purposes. Try Open Office, NotesBrowser, Serif PagePlus, The GIMP, Inkscape, Scribus, Audacity, CamStudio, and much more.
14. Look for bootstrap options instead of debt. Debt places a burden on you each month, bootstrapping gets you profiting faster, by work and workarounds. As business grows, you can move from bootstrapping to a healthier cash flow based on revenues instead of debt.
15. Invest in things with reasonable assurances of returns. Don’t gamble, and throw away money in the hopes that it will yield a high return. This goes for marketing, buying more computer or web services than you need, and other business purchases.
16. Set up a support forum – you can reduce support costs this way, because even though you have to answer a lot of questions there, the answers benefit more than one person. Other users will come in and help you also.
17. Review your internet connection. Too slow a connection can cost some businesses more than the price of an upgrade. Faster speed for others mean only minimal compromises that do not harm productivity. Analyze your needs, and adjust your plan accordingly.
18. Save money in your home. If you can live on less, you can survive tough times better in your business. Our best advice for saving on groceries? Use your crock pot. Soups, casseroles, and roasted meals are easy to prepare, just a few minutes tossing ingredients in the pot, and you’ll have dinner 8 hours later. Combined with a bread machine, a crock pot can be a means of avoiding fast food and quick fix purchases. Since dinner can cook while you work, you save time, and avoid impulse purchases.
Look at your business with new eyes. Where can you find alternatives, cut waste, save pennies, and compromise without killing the essence?
Keep what truly matters. Take the cuts where they are less important.
Recession Survival Tactics – Products and Services
Part 3 of a 6 Part Recession Survival Series
Sometimes you are going to have to change more than marketing messages to survive great changes in the attitudes and priorities of your target market. Sometimes you have to change your very product and service line.
At its most obvious, it means offering lower cost options. That is sometimes possible by offering less. But sometimes “less” guts it of value. So to offer a lower price, you have to find a way to do it that is new – that preserves the value while lowering the price.
But it can also mean simply finding ways to change your product from a non-essential product to an essential one, or making your luxury a more affordable one, finding ways to enhance the value of the product or service, or changing the offering to make it more fitting to people who are struggling.
And sometimes you have to completely abandon a product line, and move to something else. Some product lines just won’t survive. If there is a high chance that your target market is going to dry up, don’t delay! Explore alternatives NOW, and get them lined up, ready to roll. Start selling them alongside, and have your fallback product or service line working as soon as possible.
When looking for ways to offer more, for less, start with office economies first. We’ll have an entire article on that, but basically, look for ways to save first.
Then look for ways to produce faster. This may mean starting with templates, creating package deals instead of custom deals, investing in intelligent automation for selective areas, or developing systems for speeding up your work.
If you can’t do that without removing some value, then look over your product or service carefully – what is the MOST ESSENTIAL value point? What are the least essential value points? Can you drop a few of the less essential ones, while keeping the most essential, and lower the price that way?
When you are looking at new product lines, consider things related to what you already offer if at all practical. Then you don’t have to completely change your business. The key is though, that you want to either pick up your existing target market as they drift (to a different pricepoint or value emphasis), or you want to pick a newly emerging target market early on. Look at where your customers are going when they leave you, or look at what they are retaining while they let go of your product or service. Go into that, because it is more likely to last through the crunch.
Self-sufficiency and affordability are on the rise – those markets are booming. But they are also becoming much more competitive. People are looking HARD for the best deal, and you’ll have to work harder to persuade people that YOU are the best deal, in more than just price.
For 90% of the businesses out there, change will be required. And some of it will be dramatic, painful change. But without it, you sink. With it, you grow in new ways, and become a better business person.
CRELoaded’s Bad Business Example
NOT part of the Recession Survival Series – That will publish later today. Just an important interjection that should not wait.
I thought long and hard before writing this. I dislike categorizing someone else’s decisions as a bad example, but the mounting trail of actions on the part of the new CRE team comes together into some unmistakable patterns. I think an article about this, especially now, is both pertinent, and worth exploring to illustrate some points about business. I apologize for the negativity, but there just isn’t any way to be positive about this because it is SO CLEAR that what is happening is bad for everyone involved, ESPECIALLY the CRE developers. I’ve never seen someone so blatantly shoot themselves in the foot!
I think it is also relevant to point out that when CRE announced the update to 6.3, and its new pricing structure, my first impulse was to say, “Well, there goes that one, my clients will never go for yearly extortion.” (And it is that – no other software company disables part of the software if you do not renew. They withold updates or support, but they do not lock you out of the admin.) But one client said, “Oh, I can go for that.” (she is selling the store so she doesn’t need to worry much about sustainability), so we moved forward with it anyway. I thought I would be open minded about it and see whether the upgrade had value. I have now decided, irrevocably, that CRE will not be a sustainable option for our clients. I cannot, in good conscience, recommend it again unless there are significant changes in both the company policy and behavior, and the software itself. I will explain those reasons in this post.
First, it is important to understand who the target market is. CRELoaded was Open Source software, and always had a free version available. Development was slow, the software was somewhat clunky, but fairly functional. There always remained a high number of bugs. Those who used it did not use it because they loved it, or because it was fabulous – for the most part, except for a few blindly rabid fans, they used it because it was the best of the worst. Cart software tends to be old, clunky, and built on aging frameworks (like CRE), or new, immature, and lacking in important features (it is incredibly complex, so development is very difficult). There is very little middle ground. CRE just happened to have a smidge more ease of use and sustainability than others. But the margin was SLIM.
CRE had a set of longstanding problems, leftover from its OSCommerce roots. OSCommerce is an aging dinosaur, which is even more clunky and awkward than CRE. But CRE retained enough of that to be time consuming and annoying to use in ways it should not have been. Less so than Zen, X-Cart, Cube Cart or some of the other options, but still frustrating to use much of the time.
In spite of that, a gathering of people, all with the thought that at least since it was Open Source, the community could contribute and make it better together, came together and did just that. Many of the major improvements in CRE were contributed by community members. The support base was almost exclusively community contributed. You got help from other users, not from the developers. There is a certain amount of idealism in the Open Source community, people are willing to band together for the common good.
So now, with a paid scheme in front of them, the community feels betrayed. The scheme was sprung on them with no notice, no warning. Purchasers of higher priced versions have no consideration if they have purchased very recently. Too bad, pay again if you want to upgrade. Long time users, who have invested a great deal in the CRE community are now told, pay if you want to keep your store going. If you don’t pay, your store either gets outdated, or if you already have upgraded to the new paid scheme, we’ll lock you out if you don’t KEEP paying. Contributors find that their contributions are now rolled into a package that THEY have to pay for if they want to use!
The developers are crying that they did it to make the software better. But that does not appear to be the case. The new package is mostly window dressing. They also claim they did it to provide better support. But they don’t. In fact, they’ve shut out the best helpers from the forum. They say they have “new documentation”, yet it is sparse, not even current for the new version, and only contains instructions for obvious tasks. The conclusions I draw from this are not very nice, but there is so much evidence, there really is no other conclusion.
You now get a little support when you pay for the software. Complaints on the forums allude to wasteful responses, and burning the support time in clarifications that should have been obvious, instead of getting actual help. Further, since they’ve shut down the people on the forum who can help you there for free, and have driven off many others, the conclusion is that the developers resent the free source of information, and want to confine people to the paid support.
If you think this conclusion is off, consider:
- The major contributors to the forums have been suspended from the forums. These are the ONLY source of helpful information on trickier issues.
- The ONLY voice for the company, who ever posts to the forums, has NEVER ONCE actually answered a question, even when the answer had to be fairly simple. NOT ONCE. The answers are always hedgy, they circumvent the actual question, and then lay blame for the criticism of the project on “unprofessional” behavior of the criticizers. If you express dissatisfaction, apparently, you are unprofessional!
At the same time they have done these things, they have embedded yet MORE advertising in their software. Not only do you have to pay a yearly fee with the promise of penalty if you do not, but they have placed advertising through the whole software interface. It shows up during the install (in a way that is not obvious that it is not a required informational field instead of a request for info from a service), template ads embedded in the design area, active ads at the top of the admin.
Again, we might accept these things if there were significant improvements. But I’m not seeing that either.
The longstanding problems are still there. A little bit of eye candy (and not even GOOD eye candy, the design improvements are pretty lame) in the backend, a few more modules bundled in, and one or two tweaks which did not make things easier, only changed how it is done. No real VALUE added to the package for the average user.
Consider… Leftover from OSCommerce, the software has had a major issue in wasting time. It does this in two ways:
1. Database queries are very wasteful, and SO SLOW, that you spend an average of 15 to 45 seconds just waiting for an admin page to load. 5-10 seconds is considered normal to long for page load times. Cumulatively, this adds up, and it drives people off from the frontend also, costing in customers.
2. The interface is clunky, requiring 2-3 actions to do things that should take 1. To configure the store, I am confronted with more than a dozen links. Each of these leads to a page of config options – each page has probably 20-30 options on it. In order to edit any of those, I must first select it… and wait for the page to load. Then I have to hit an Edit button… and wait for a page to load. I can then edit the item, and… wait for the page to load again. I am spending between 1 and 2 full minutes on EACH OPTION. That means it takes me 15 to 30 minutes to edit each set of options instead of the 2 minutes it should take. All in all, HOURS of wasted time for each install and setup. This should be done in a single screen. Load the list of options, and edit fields already visible, so all options can be edited at once. A single form for each set of options, instead of hundreds of fiddly separate forms. There is no reason why it should not have been done LONG AGO. I just don’t have that kind of time to waste. I’ve used Joomla. I know what config interfaces should be.
The new version has only 2 templates. The old standard, and a new one that is WORSE than the old standard as far as coding methods and editability. It has hard coded images all through it instead of putting them into the stylesheet where they can be more easily controlled. One can only assume that the lack of quality templates, and the lack of templates in general (they reduced from 4 to 2), was to provide an incentive for people to purchase templates instead.
It is abundantly clear that all the “work” they were doing on 6.3 and the delays to release were caused not by the developers slaving night and day to bring new features or improvements, but to embed all the new revenue generation bits and protections into the code. They developed for their greed, and not for the customer need. That is pretty short sighted, because if they’d just made it good, and done some real improvements, people would not be nearly so grumbly about having to pay for it. All that coding time they spent forcing customers to pay for more and more just serves to detract from the value, and tick off the customers. REALLY foolish.
Interestingly, they are running around doing a lot of “image control”, and spending a LOT of time trying to put bandaids on all the negative reviews and comments. This is borne out in their forums and by the fact that they dug out my blog (not by any means a ragingly popular blog), and took the time to comment. Now, not ONE issue has ever been addressed other than by placating and evasive words. Had they done what they knew to be right, and were they confident in what they are doing, they’d be concentrating on fixing problems and hurrying to address issues with actual helpful information. The fact that they don’t do this tells me that they KNOW they are on shaky ground, they know they are being unfair and inconsiderate, and they know that they are also on legally questionable ground (a whole ‘NOTHER story!). Even STARTING down that kind of road is foolish. It tells me they are more concerned with ILLUSION than with REALITY. Always a deadly course for a business. And suggests ulterior motives – questionable ownership, and the possible intent to bleed the company and walk away, or to use it for other less honorable purposes. For any serious business, problem resolution and prevention is ALWAYS more profitable than damage control after the fact.
It is important to realize that a store owner cannot just “move to another cart”, otherwise you cannot quite understand the position that a cart users is put in when a cart moves from free to paid, or worse, to a situation like CRE just did. Each cart has DAYS of work involved in the setup, and often hundreds or thousands of dollars spent to get it the way they needed it. Sometimes custom coding has been done, to get just the right features, and that custom code, design, and config work cannot just be ‘ported to another cart. Most of the time, it must be painstakingly redone. So what is the struggling shop owner to do? This change will cause many to either operate a store that is at risk for security exploit, or to be forced out of business. Yes, it is that serious, especially in the current economic climate.
Now, there is a complete conclusion here. It is a lengthy one, for which I appologize, but it must be explained fully to get the whole import.
First, they deprived people of their agency. They took away the independent options, and are muscling people into a position of HAVING to buy what they did not choose to purchase in the first place.
Second, they have demonstrated over and over that they do not appreciate the help of the community, in fact, they resent it, and want it to go away. There is no other conclusion for the events on the forum.
Third, they will shut out any resources which provide any alternative to purchasing services or enhancements from them. They fear any competition, they have no willingness to develop a spirit of helpfulness.
Fourth, their actions are completely contrary to the community spirit of Open Source. They are driving away the very community that build them, and turning on them in a fairly nasty way.
Fifth, the leadership is talking a lot, but saying absolutely nothing of value. The comments on one of my previous CRE posts are clear evidence of that. Lots of placating words, an effort to manipulate me into accepting blame as the unreasonable bad guy, but no actual addressing of actual issues. There never has been, and one can only assume there is no effort to do so.
Sixth, the software has only ever been good enough to compete as a free offering. If I want bad software, I can get it free anywhere. If I want GOOD software, that is also available free. If I want to actually PAY for poor support, I can get that from ANY company out there! If I want to pay for obsolete OSCommerce underpinnings, I can get LiteCommerce. If I want nightmarish templating, I can get that from X-Cart. If I want unsustainability, I can get that from CubeCart. If I want any of those options for free, the choices are plentiful. Any one of those packages costs less over time than CRE, and is no worse. I refused to pay for them because they had serious problems – and I feel that paid software ought to NOT have the most obvious sustainability problems.
Seventh, they are spending a lot of time on image control, and on policing negative publicity. Time that could be better spent actually addressing the issues. They KNOW they are in trouble, and they know the course they are on is indefensible – otherwise they’d answer effectively, and work on fixing what is wrong.
Eighth, they did this at the beginning of a recession! People are looking at CUTTING BACK, not adding on expenses. BAD TIMING!
Ninth, the combination of poor decisions and inconsiderate actions on their part, not to mention just bad business management in their choices to just go around telling people to stop complaining and gee everything will be ok cause we are really nice people after all instead of actually addressing issues in an open and helpful manner, combined with an unsustainable payment model, means that they cannot stay in business long under the current structure and policy. I am a startup expert. I know what it takes to succeed. They have consistently done everything that would get in the way of long term momentum, and they are currently driving off their most loyal customers – those that were responsible for bringing them the most business. The only customers left are those who feel they have no choice. That is a poor base, they’ll eventually find other options.
I think the company cannot survive more than another year, perhaps two at the outset if they continue as they are. That is a well-considered opinion there, and one that I feel strongly. This is, perhaps, the primary reason I will no longer recommend it as a viable and sustainable option for my clients. The company is not stable enough to ensure that the software will go forward in growth with my clients. It is too likely to fold and simply disappear. I won’t advise that my clients invest in something so shaky.
I’ve advised that my clients get behind new projects a lot. We’ve invested our time and support behind MANY young projects, and many Open Source projects. This one, we can’t. It lacks the two most important elements in Open Source, and brings with it baggage and a developing track record that virtually guarantees their failure.
For the record, the two most important factors in Open Source, to ensure sustainability, security, and growth, are:
1. An active and responsive developer community. Theirs is obviously not responsive, and their activity is concentrated more on developing more forced revenue streams than on delivering value to the users.
2. An active user community. It is drying up so fast that only a few die hard hopefuls are left, and some ignorant newbies who did not know what they were coming into.
So the whole point here is, in those points above, CRELoaded has given us an admirable roadmap of what NOT to do if you want to stay in business. If their actions were carefully calculated to drive off their customers and go down in an unspectacular poof of electrons, they have chosen exactly the course to ensure that it happens.
Take a lesson from them:
1. Understand your target market, and put their needs first.
2. Base your revenue generation on the choices and goodwill of your customer base.
3. Give good value at every point possible.
4. Cultivate a spirit of helpfulness.
All four are things they have failed to do, and which can make or break a business. DO those four things, and you can succeed and compete even against big business. Fail to do those things and you’ll crash, no matter WHAT your business size.
So long CRE… been nice knowing you, but I don’t think I’ll be there for the funeral.
Note: The opinions expressed in this post are the perceptions of the writer, and should not be interpreted or quoted as fact without corroborrating evidence.
Recession Survival Tactics – Marketing Messages
Part 2 of a 6 Part Recession Survival Series
So things are changing. That means you have to change. Only a very fortunate few are going to survive it without changing, and then only if their business is already providing rock bottom value. Everything else is going to require change on the part of business owners to be able to keep business coming in.
There are several facets to this, which we’ll cover in separate articles.
The principal thing that happens in a recession, is that people reprioritize. If you were on their list of affordable choices yesterday, you may be struck from it today – or they may decide that they can only justify half the expense that they could justify the day before. And it literally happens that fast. It doesn’t stop there either, because one day they’ll decide on half. The next day their hours at work may be cut, and you may be stricken entirely.
How are you going to keep people coming to you as a viable option? Maybe your marketing message has always emphasized quality, indulgence, service, the extras. People still want that, but when money is tight, they see dollar signs in front of those words! So somehow, you have to get words in there that emphasize value, affordability, low cost, better results for the expense, etc. Concepts that now take precedence.
People will be concerned primarily with two concepts:
1. How to save money on essentials or reduce the cost of their favorite indulgences to the point that they can still justify them.
2. How to make money, in a lower risk environment.
If you can demonstrate an ability to help them with either of those goals, in a way that helps them feel that you have sympathy for their situation, you have a good chance of keeping business. Maybe you can do that just by pointing out things you didn’t emphasize as much before. Maybe you’ll have to completely revisit your target market – will you shift from a mainstream item to a luxury item, or will you rescale to adapt with your existing target market as they change?
Find out what your customers most want and need. Then find ways of communicating the ways that your product or services supply those needs and wants.
Be willing to change your slogan. Be willing to change your primary marketing messages, and indeed, the very identity of your business if necessary. We are heading into something that will affect our nation strongly for a decade or more. You won’t be wasting your time on a temporary change. This kind of action is necessary, or you’ll be too late.
Recession Survival Tactics – Are You Essential, or a Luxury?
Part 1 of a 6 Part Recession Survival Series
As belts tighten and budgets squeak, people are drawing new lines to define what they think of as essential, and what they classify as a luxury. They’ll hang onto essentials, they’ll either let the luxuries go, or they’ll find lower cost alternatives to them.
Right now, that line is being redrawn almost constantly. As people realize that it isn’t just a blip. That it isn’t going to go away, that it is going to be long, ugly, and bad. This means their idea of what you are, is going to be in a state of almost constant flex. It means you have to think ahead, not just about what they think today or tomorrow, but how they will think if worst comes to worst, and life gets very hard.
So who decides whether you are essential, or a luxury?
You do. But you can’t just TELL your customers or clients that you are essential and BE essential.
You have to listen. You have to HEAR what they think essential is. Then you have to BECOME what they define as essential.
It means being creative. Maybe soap is essential. But maybe the good soap becomes a luxury because now they can only afford $1 per bar for soap instead of $5 per bar. How will you become essential again when they decide like that? Can you?
If you insist that the $5 bar is better for their skin and preserves their health, reducing the cost of lotion, or allows them to wear less expensive fabrics and be comfortable, or that since they use less of the expensive stuff to get clean that it is actually a better deal that it appears, then maybe you can be moved into the essential classification again.
Half of this is going to be marketing. How you describe the benefits. What was a benefit yesterday may not rate as an important benefit today. “Indulge yourself” as a slogan may become completely irrelevant. Cease to exist as an effective message. “Affordable Indulgence” may be a message that was scorned yesterday, but embraced today. People may want you to tell them what a good deal it is today, when yesterday they were only concerned with how good it was. Mincsets and thought processes, priorities, and values, are GOING to change.
The other half is the actual product or service. Can you change it, make the effort to contain costs, through creative strategies, while still keeping the price the same (while your expenses rise), or even drop the price, offer a lower cost option, etc? I’ll address specific ideas in a later article, but this question is the one that defines the successes in a tough economy. If you can do this, you can survive. If you cannot, you probably won’t.
So go look at your business – examine your products and services with a critical eye. Look at your marketing messages and figure out whether they are going to meet the changing needs. Be creative, and come up with a way to change what you do, so you can be essential. Because if you are a luxury, you are going under.
It’s Time to Leave the Harbor
A ship in the harbor is safe. Most of the time. During a storm though, the ship is safer at sea. In the harbor, the confines that make it safe at other times, becomes a trap, and the ship is in greater danger. Out at sea, navigation away from the worst of the storm is still possible, and fewer obstacles are present to dash the ship to pieces.
Our economy is heading into a storm. It is likely to be a bad one. How can you get your business out of the trap of a harbor, and out to sea away from the fury of the storm? How can you find calm seas, or at least, less turbulent waves and winds?
In a volatile economy, sitting where you are, hoping that things won’t change, may kill your business. Smart sailors watch the weather signs, listen to the reports, and steer clear of the troubled seas. If they cannot avoid them, they batten down the hatches and try to ride it out. But they try to avoid it first, and only settle to ride it out if there is no other option. And even then, their choice is backed up by changes in their actions, to give their choice the best possible chance of a favorable outcome.
It isn’t time to pull back into the false security of a harbor. It is time to move out, and take smart actions to preserve your business. To adjust for the winds and waves so they don’t swamp you.
- Assess your current business health, and make smart corrections for current problems or deficiencies.
- Develop a contingency plan, based on what your customers are most likely to do as things get hard.
- Watch your stats, and be ready to act if you see declines of more than 1-2 months.
- Implement your contingency plan, and be ready to move into different ways of doing business if necessary.
We’ve seen a lot of businesses go under recently. Big ones. It didn’t happen suddenly. The signs of an impending storm were there for a long time before the company declared bankruptcy, or sold out, or laid off workers. They either failed to adjust out of ignorance, or decided that they’d try to ride it out in the hopes that it would not get too bad (in spite of clear signs to the contrary), or in hopes that something would rescue them if they just waited. Don’t wait when you should be taking actions to adjust your business! Failure never happens suddenly, it always happens slowly, and there is plenty of time to react if you just do it in a timely manner.
Smart sailors know when to act. And they know to watch the signs. Don’t let the rut of familiarity trap you when wise action can keep your business going strong in spite of what happens around you.
Stages of Growth
A business has stages of growth, where you have to adjust to a new level. Each time it takes a revision of priorities, new ways to be more efficient, and thinking outside the box to become more than just another business like all the rest. How we grow doesn’t only separate the good business operators from the wannabes, it also helps to define what our business becomes that really defines it as unique.
When you struggle to handle growth, and look at systemizing parts of your business, you can either keep the defining things that comprise your unique selling proposition, or you can lose it as you adopt the same methods of coping that every other business devises. Are you really different? Are you going to STAY different as the company grows to become larger and harder to manage?
I know business people who have said, “This far, and no further”, for just that reason. They felt if they grew more, their business would completely depersonalize in a sea of systemization, adopted to cope with larger and larger volume.
- As your business grows, what are the critical elements of personal touches that you MUST retain if you want to keep your business identity?
- How can you hire people to give the same kind of service that you do?
- What are the routine things that can be systemized, and made more predictable, and more beneficial for the client or customer by systemization?
- Are there existing solutions available to help you grow and still keep your identity, or will you have to create your own?
These are questions you should be asking if you want to grow. And the answers will largely determine WHAT your business grows into.
Think about it through each phase of increased business. What should be systemized now? How do we learn to do things in a way that gets more done, but preserves the unique aspects of our business?
Thinking about it as you go along keeps you from losing the essence of your business in unexpected affects of rapid growth.
Paradigm Shift
Sometimes in business, we reach a point of decision which, if we choose one path over another, will make a fundamental change in how our business operates, and where it takes us. Sometimes when those shifts occur, we hardly recognize them except in retrospect. I’ve learned to see them better on the choice side lately though.
One occurred today, for me, and for one of my associates. This lady is a VA. At one time, we entered into a collaborative agreement where I built a website and maintained it, and she did the grunt work to build the content and promote it. It was a good collaboration for both, and should grow to be something that benefits us both.
Today, she told me she was asked to do a website, and that at first she thought she’d just pass the work on to me, except for the content additions, which she could do. She did not consider that she could actually build the website. She asked me for advice on options for building it, just in case she could. I suggested that perhaps website developer training was what she really needed.
Two shifts occurred in that conversation:
- She made the shift from “I don’t do web design because I am not qualified.” to “I can do anything with web design if I have the right person backing me to train me as I go.” From this point on, website issues won’t be a ceiling for her, the possibilities for her are wide open.
- I made a shift from feeling that I did not want to train people who are close to me to be my competition, to being willing to teach ALL that I know, with no reservations.
Both of us crossed a line, and neither of us will ever be the same because of it. We have entered a larger world, and our lives will change from this day forth. There is no going back to fearing the unknown for either of us.
We don’t fully see now how it will change our lives. But this is one time when I’ve recognized when it happened that it was a significant thing. Something big, that I won’t fully understand for years. I know the bigness of it, though I don’t completely see the effects in their detail. I only know that in some way, I’ve just untethered myself from a set of limiting ideas, and have given myself permission to soar beyond what I could allow just this morning.
There have been many of those lately. Simultaneous with explosive growth in our company. I don’t think one came from the other, there has not been time. I just think that a business and an owner have to age in to some things, and the growth of the business and my thought concepts occurred around the same time because we just had to mature to that point together.
I know that my associate’s business will take on a life of its own and become something other than what it is now. I know that ours will also. Because both of us had the courage to step beyond boundaries we had this morning, and enter a larger world.
Business and Friendship
A friend and client was talking to me on the phone today. She said, “All of my business seems to be coming from friends. That isn’t how I wanted it. It seems so much more difficult!” She said that it was harder to bill them, and to keep the business side of things businesslike, because her desire to give to her friends was interfering.
When you have a business, and choose to grow that business through networking, virtually every client will be a friend. They do business with you BECAUSE you are a friend. I don’t mean your existing friends or family will come to you for business, they rarely do. But people who have known you always as a business person, will come to trust you because of friendship, and wish to do business with you.
It is OK to charge your friends for work! They come to you usually expecting to pay. If you hum and haw around, you just keep things uncomfortable for them. You can say outright, to friends, or even family, “I can do this much free. After that, the cost to you will be this.”
That is a good thing for both of you. Most of them want to know! If it is something you cannot give, you MUST say so. If it is something you WANT to give, say that too. “I’d be happy to do that for you without charge, because you are a friend, and I can afford to do that this time.”
They didn’t come to you because they wanted a freebie – well once in a while, but usually they needed to do business with someone, they expected to pay, and they chose YOU. They want to pay a fair price. They trust you to give them that. Do so, and you have given them something they were having a hard time finding elsewhere.
Give them the same consideration that you’d give any client – use a contract, spell out the terms, be firm and detailed about costs and limitations. Never think that since it is a friend that you don’t need a contract, or that you can do business more casually. That isn’t why they came to you! And leaving out the details will cause a breach that a good contract won’t risk.
The desire to give is great. In business, we choose when we can afford to, and when we cannot. When we can’t we say so, and confine the giving to giving great service and value for what we charge for. That’s how you grow a business with the best of everything.
It is only when we DON’T say, and when we DON’T put things in writing, or observe professionalism with friends, that we get into trouble.
Friendship and business can co-exist very well together!
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