Article: Three Ways to Economy-Proof
Your Business Without Hurting Your Brand
RainToday.com, April 2008
By Vickie K. Sullivan
During a down economy and uncertain financial times, clients
think it is natural to pull back from investing in big-ticket
solutions…even though they still need outside help to
solve their problems. In response, many high-end professional
service firms get flexible when potential clients balk at
"risky" high-end investments.
The challenge in being flexible is finding the boundary
between the need to be nimble and the appearance of desperation,
between the need to generate revenue and the appearance of
having a fire sale.
Below are three ways to be flexible without damaging your
first-class reputation.
1. Commoditize Your Offerings
Every challenging economy brings out the commoditizers. Why?
To serve buyers who are just too cautious to take the budget
hit from big-ticket projects. Instead of fighting this viewpoint,
join the party by coming up with off-the-shelf, information
products of your own.
For firms with prominent brands, it's a great way to maintain
relationships with clients who are experiencing temporary
budget cuts. This strategy also prevents low-cost competitors
from introducing their services and up-selling later.
Too many firms leave this money on the table, thinking that
distributing "general information" will dilute their
brand. That's not the buyers' perception: They think you have
something unique to offer, otherwise, you wouldn't be prominent.
So if your brand is strong enough, your content will be perceived
as better anyway.
The Boundary: Here, it's no customization.
The low-cost folks aren't offering that, so you don't have
to either. If clients do want tailoring, then the ball is
in your court to up-sell limited assistance or to create good
will with value-add.
Another up-sell opportunity: package deals that include conference
calls, "exclusive content," and other limited-access
offers.
Example: Instead of giving customized workshops
on selling skills, a sales consultant can create their own
version of DVDs for internal meetings. This can not only be
sold to current clients with the budget blues, but it can
also be distributed in training catalogues. The consultant
can even give away the DVDs to her high-fee clients as value-add.
2. Reach Out to Do-It-Yourselfers
When the economy gets rough, many clients believe they have
more time than money. Rather than jump through all the budget
hoops, leaders will look inward to find their own solutions.
Rather than use outside experts to figure it all out, buyers
will purchase the necessary resources and content and do the
work themselves. This means professional service firms can
lend a hand by providing the right resources.
Even though this kind content is more in-depth than the typical
off-the-shelf formats, providing these processes will not
hurt your brand. It extends your expertise to potential clients
who wouldn't work with you otherwise.
Everyone understands the price-point difference between using
a system to do the work themselves and paying you to do it
for them. Therefore, your high-end services aren't cannibalized.
In fact, many of my clients are reformed "do-it-yourselfers"
who've learned the hard way that they need outside help. So
be sure to follow up with these folks and offer possible upgrades.
(See the next subsection for ideas.)
The Boundary: Here it is scope: make the
application as narrow as possible. Provide a systematic approach
with scripts, templates and checklists. These systems are
not all things to all people – they go an inch wide
and a mile deep. Go beyond general education and the CD/DVD
formats – the commodity market has that covered.
An up-sell opportunity: online interaction that applies the
learning. Games are huge now, especially with the millennial
generation. For instance, a team-building expert created an
online adventure game using the skills they teach and the
military uses simulations to teach decision-making in high-stress
situations.
These types of games are easier than you think to implement.
Programmers are everywhere, and open source code makes creating
games more possible than ever.
Example: Instead of getting a huge contract
for coaching middle managers, an elite executive coaching
company can license their processes and even provide checklists
to train internal coaches. This is a great way to create a
consistent culture between upper and middle management and
to increase bench strength.
3. Have "Good Enough"
Solutions
When money feels scarce, clients look for the best solution
at the best price. Sometimes they are willing to focus on
the most pressing needs first, and pay for the rest later.
By unbundling your larger project into smaller, more precise
pieces, you can give clients what they need right now and
at a price they are more comfortable with. Your brand won't
suffer if you give clients half a loaf of bread, as long as
they know it's only half. They can always come back for the
other half.
At first blush, these solutions appear unprofitable. The
old adage about a small sale taking the same time to close
as a large sale is true. The profitability is in the implementation.
It often takes less work to deliver on these options, so there
is still room in your schedule for the larger contracts.
These alternatives also create repeat purchases, which are
much more profitable because of the low marketing costs. Because
you are still working closely with the client, you can spot
needs and plant the seeds for the next project. My favorite
phrase: "If we joined forces again, I would focus on…."
The Boundary: Again, it's scope and availability.
Prospective clients need to know they are not getting the
same thing as the larger project. Not only do the differences
need to be spelled out, but the impact does as well:
- Will the limited scope slow down progress in implementation?
- Can they use low-cost alternatives to make up the differences?
By reviewing the impact upfront, you risk losing a sale now,
but avoid creating a bad client later.
Example: A market research company can have
full-blown analysis specifically designed for their clients,
and provide an in-depth game plan with six-month's follow-up.
A smaller project would not include individualized research,
would use current information to focus on one or two areas,
and would include no follow-up support. Both options have
value; the rationale behind the price points is clear.
A Diamond is Still a Diamond
Years ago, I struggled with how to help experts who really
wanted to work with me but who were too scared to pay my fees.
One of my high-end clients said it best: "Tiffany's
has diamonds of many sizes. People can pay less for a smaller
size and more if they want more carats. But all the stones
have the same high quality – they are all 'Tiffany diamonds.'"
You can help more people by offering your expertise in a
variety of different formats. By using clear boundaries, you
can manage expectations so your clients understand what they
get. And by keeping the quality high, your brand will soar
even higher.
Since 1987, Vickie K. Sullivan, President of Sullivan Speaker
Services, has generated millions of dollars in speaking fees,
book advances and ancilliary income for her clients. Sign
up for her free market intelligence at http://www.SullivanSpeaker.com
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