This past weekend I was in Taos, NM, a small town (6,000 people) known for its cultural, historical, art and outdoor attractions. The local newspaper just published its annual list: Best of Taos 2011. This year was particularly poingnant in that several of the businesses that won the top awards were going out of business, or had already gone out of business.
This enigma started me thinking about products and services in general. Many brands are in the throes of the same dilemma, whether they are retail businesses in resort communities or brands dying due to shifts in consumer buying patterns. What can be done?
Surviving a recession doesn’t mean cutting budgets, it means using smart marketing strategies to broaden appeal and create value for customers who have fewer discretionary dollars to spend. Here are some ideas:
1. Reinvent your brand One artist in Taos, who sells one-of-a-kind pieces of pottery, doesn’t just sell his work–he offers group and private classes, residencies and studio enrollments to access his many unique kilns (wood, gas, charcoal, soda & salt atmospheres, etc.) This artist not only sells his wares, but has reinvented the retail experience into a hands-on experience to appeal to variety of different customers and colleagues. The opposite was true of a plant nursery, voted as the #1 plant source in town. Instead of expanding the idea of the business, they hunkered down, discontinued their classes and concentrated on their point-of-difference as an organic plant source. The problem was that ther were two other nurseries in town and many others online touting the same organic “point-of-difference.” This business is now closing their gates.
2. Cut inventory or limit SKUs Grocery and natural foods stores have been doing this at least since the recession started. Why offer 10 brands of salsa, when the bottom six contribute very little to the overall gross sales and profitability picture? If you’re a manufacturer, why are you producing back stock for hoped-for sales while tying up cash flow? Just-in-time inventory should be the rule for manufacturers, while limited SKUs should be the rule for retail (which in turn limits product inventory purchased from suppliers). Do some pruning for your own brand offerings before your customers and resellers do it for you.
3. Hit Several Price Points The top-rated restaurant in Taos was one of the first casualties of the recession. Joseph’s Table was an award-winning, critically aclaimed dining establishment that was also…expensive. While they may have adjusted their offerings slightly, another restaurant in the same group (Lambert’s) remembered that quality plus value was a critical part of the diner’s equation. They offered 25% off their entrees before 6:00pm, and hung a huge banner out in front to remind diners of this limited-time special. Lambert’s has survived and thrived. Galleries are ubiquitous in Taos, but many have closed recently. Perhaps these galleries could have brought in emerging artists at lower price points, or asked established artists to offer smaller paintings at a lower price point. The same can work for any brand: broaden your appeal through multiple price options.
4. Advertise Whether you use traditional marketing programs like advertising or turn to public relations or social media, now is the time to cement your brand in your customer’s minds. In the Best of Taos list were the picks for the top two Realtors in town. Very few homes have been purchased or sold by local residents in the last couple years; most home transactions were closed by second home-owners. Yet, the number one realtor was the woman who has advertised the most on radio and in print. Hmmm…not to take anything away from this realtor’s skills, but in this case awareness created brand superiority. The lesson is that when there is less noise around us, it’s time to turn up the volume on our own brands to be heard and remembered.
5. Pay attention to good will Balance sheets often include good will as an intangible asset for an organization–and what an asset it is. Good will is the halo on a brand. The leading food business in Taos is Cid’s natural market. Safeway, Albertson’s–even Wal-Mart–offer organic and natural products, but most people go to Cid’s for these products instead. Why? Community involvement (such as sponsoring the Gay Pride bake sale over the weekend) and the store’s principles (donating money to various organizations when customers bring their own reusable bags) have led to great loyalty. Good will, loyalty, price inelasticity–whatever you call it, it’s worth as much or more as any tangible asset a brand has to offer.
What lessons can you apply to your business to salvage your brand’s business as the econmy lingers in the doldrums?