Opportunities In Crisis
Posted by Sant Qiu in : Marketing Strategy on July 22, 2009 , trackbackIn a crisis, most businesses stop their promotional activities. Their focus is to cut down on expenses and possible losses. A lot of the times, they forgot that what helped them arrive to where they are today, more often than not, is their focus on growth, plus a healthy appetite for risk-taking. I’m not talking about gambling, but calculated risk-taking that is the bedrock of entrepreneurship.
This presents a very unique situation… a very rare opportunity for those who can recognise it. Just imagine, while most of your competitors are cutting down their marketing, and everyone is shrinking, you can buck the trend by ramping up your marketing. This will help you increase your market share and even dominate your niche.
In a boom market, everyone is actively marketing. Even though the target market might be bigger, but competition is much more fierce. Your target market has a lot of alternatives and options to choose from. However, in a downturn, while the market probably shrink, there are also much less competition! When you’re the only one actively marketing your products/service, you will definitely gain bigger market share.
Not only that. In a downturn, media owners (TV, radio, newspaper, etc) tend to offer better discounts to keep people advertising. (By the way, I’ve never paid retail price for any advertising before. You should not either.) Not only that, service providers such as ad agencies, designers, printers, flyer distributors, etc, will be much more flexible with prices as their services are normally the first ones that got cut. It is the buyers’ market. With a little negotiation you can get really great deals.
So, with the same amount of money, you probably can get more and achieve more compared to when times are booming. So, expanding in a crisis can be a very smart thing to do.
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I agree about expanding during the financial crisis. But isn’t this for companies or someone with deep pockets or for companies that have strong backings?
During a financial crisis like now, is it also a good think to build up assets? In preparations for the spring jump immediately when the economy recovers (or at the earliest possible possible good time).
I got to your blog address after reading some materials from Secrets to Dominate your Niche.
Kin Lee
Hi Kin Lee,
Yes, expanding doesn’t necessarily mean spending more all the time. You can expand your distribution network, tie up more strategic partnerships, etc. building assets is also a way of expansion.
The point is not to sit still or adopt the “wait n see” strategy most companies will be taking.
For example, a car dealer/salesperson can tie up with a car polishing service for a mid to long term deal at an especially good price because of the recession, that they wouldn’t have been able to get during the good times.
This can in turn be used as a huge value add to attract buyers. And since the agreement is for mid to long term, then when the economy picks up they can still benefit from this deal.
Just expanded my business with a new shop and 2 more next year. Risky? Hell YES but I do get a great deal in the process which I won’t get some 12 months back or indeed 12 months from now! The key is to so some research and be selective with what you spend but I agree with Sant there’s opportunities in crisis.
Congratulation Shyan. Glad to hear you’re doing great. So where are you located now?
Am located now at Toh Guan Centre…been busy with all sort of internal admin stuff and customers…need to catch up on where we left off previously…and congrats on your new book…can’t wait!