The current consumer psyche - no cherry sauce thanks!
I attended an all day 'seminar' recently. A chap I used to work with in a global consultancy left to set up his own business pretty much around the same time I set up on my own. Over the past 7 years he's often invited me to get involved with his business activities - however, it wasn't until last week that I finally took up an invitation to guest at his Annual Conference. Over 400 enthusiatic delegates - the Sheraton Skyline was bustling with energy. I was impressed. The majority of the seminar related to some very interesting tax strategies - and given that 99% of people attending were accountants - then this was of course, hugely relevant. Of course, as a marketer traditionally focused on professional services marketing - then many of my clients have been (and still are) firms of accountants - and so it was good to see some familiar faces (from the days when I worked in the consultancy) and generally network with others to find out how business was going for them.
The headline guest speaker was Gill Fielding - of 'Secret Millionaire' fame, Apprentice panel (and hinted at possibly being the next Dragon!? - sshhh - you heard it here first!).
Initially, I thought she was going to rave on about property investment (as that's how she made her millions and it was also one of the themes for the day). However, whilst she provided evidence that there are signs that property is on the move in a positive direction - her main investment opportunity advice was to 'invest in business'.
Like myself, Gill was very much of the opinion, that the current climate is possibly one of the best opportunities to launch new business, new products and for small businesses to really leverage the current econonic downturn to 'compete' against the struggling bigger players.
In recession, the consumer psyche (be it corporate or man on the street) focuses on the 'basics'. They don't want all the 'packaged' added value bundles - if they want to buy a sofa they want a sofa - not the chair, the scatter cushions and the table and lamp thrown in at discount rates! Consumers go 'back to basics' - not necessarily because they can't afford the 'frills' - but because that's the right thing to do in the climate (hold on to their money and purchase only what is necessary).
It's no surprise then that cobblers, seamstresses and repair businesses that 'fix' things (saving the consumer from having to purchase anew) are all doing very well in the current climate.
Supermarkets with their 'basics' range - have never been so happy (because of course, they make the biggest margins on their own brands) - and now that 'consumer pysche' is such that it's ok to purchase 'no frills' stuff - because 'hey, it's a recession' - then all the better. Even Waitrose has introduced an 'essentials' range (for the struggling middle classes - plleeeeze!)
In the 'holiday' sector - camping and caravanning holidays in the UK have sky rocketed - and so if this is your business area - what are you doing to 'leverage' the opportunity?
Another impact of 'recession' - is that loyalty can often 'go out the window'. Large corporates looking to make cost savings are less likely to remain loyal to their 'premier rate' agency (even if they have been doing business with them for years) - after all the bottom line is the bottom line and therefore, they are more open to looking around for some 'bargains' (I don't mean inferior service quality - but getting the same level of quality at much reduced rates).
So what opportunities does the current consumer psyche hold for smaller businesses...?
Well for one, smaller businesses tend to be far more price competitive - they don't have the massive overheads incurred when employing and housing hundreds of people. Talking from experience, our Carvill Creative design business provides exemplorary creative services for a fraction of the cost that the very same designers were charged out for when working in large London agencies. Same people, same design skill - just none of the overheads. So clients receive excellent creative services for a fraction of the cost.
Of course, what the 'big players' have is their 'brand' - but build yourself a decent and impressive portfolio, customer testimonials, case studies etc (building trust in your brand) - and add this to the ability to offer significant cost savings- and you have a winning formula. Brand loyalty alone no longer cuts it (as we've seen in consumer buying behaviour in supermarkets with 'own brand' purchases recently going through the roof [up 70%! in Sainsburys!] ).
Of course, the other plus of using a small business is the service delivery. A small business stays close to customers - keeping on top of their needs and going the extra mile. You're often directly in touch with the business owners when dealing with a small business - and as owners, keeping the client well serviced has significant consequences. Client service is a vested interest!
- Small is responsive, fast and nimble
- Small is very price competitive
- Small provides excellent service levels (often direct from the people who own the business)
- Small is willing to tailor services and innovate