3 Strategies for growing during a recession

During the economic free-for-all of the past 12-14 months, many companies consider themselves successful if the "open" sign still glows. But undoubtedly, conditions will improve just as they historically have, and it will be those companies who seize the opportunities inherent in the current conditions, and position themselves for future growth, that will dominate their markets in the future.

Jim McCarty, a former client and personal friend, and former Senior Executive Vice President of Ecolab, has always held these beliefs, which helped turned Ecolab into the dominant leader in the industry of institutional sales.

Three core strategies Jim employed during his 30 plus years at Ecolab, where he oversaw five divisions, 4,000 people and more than a billion dollars in sales, can prove just as a successful for even the smallest startup company, and organizations of all sizes in between. The three strategies are all woven with a common thread.

See if you can't detect that thread before reading about it in the last paragraph.

1. Retain.

Jim believes this strategy should be at the top of any company's priority list.
By retain, he means the following:

First, we must retain all the associates who work for us. I've conservatively estimated that turnover losses cost a company more than $100,000 per mid-level employee when costs such as recruiting, interviewing, hiring, training, and lost production are calculated.

Second, we must retain the company traditions and the culture that have made us who we are today. There are many key reasons why a company is successful, and often it's the core values, company culture, and other differentiators that are undoubtedly important, yet don't appear in a product catalog.

And third, we must retain our customers. It's much easier and more cost effective to retain a customer than win a new one. Additionally, the longer you keep your customers, the more you set their expectations and cement your company's image as an industry leader.

Research shows that it's five to six times more costly to gain a new customer than retain an existing one, making it absolutely critical to retain customer during a recession.

Remember that outside of a quality product or service that's delivered on time, the single most impacting tactic you can employ to retain customers is to reinforce your company's position, along with the sound business reasons why the customer chose - and is continuing to choose - doing business with your company.

2. Grow.

First, we must grow the employee's knowledge. We must grow our associates by teaching them how to be more effective at what they do. At Ecolab, this meant creating Ecolab University where every employee received hands-on training specific to his or her position, which resulted in him or her being better trained, and better able, to help customers.

Second, we must grow the number or products and services we provide customers. As we serve our customers, we can partner with them to fill their needs. And as we move closer to partners than suppliers, we can add even more value by anticipating our customers needs before they even realize them, and then filling these needs as a course of our service. Such forward thinking and a customer-first approach makes you a highly-prized consultant - and partner - one not easily let go.

Third, we must grow our top line. This might be the most challenging of the recommendations, but it can be highly impacting. What typically happens during tough economic times is that company's become misers, and focus solely on protecting the bottom line. The true leaders will view such tactics by competitors as an opportunity, and invest in their company's ability to exploit the economic upturn when it assuredly occurs.

3. Gain.

We must gain new people that bring talents that don't exist today. Partnering the talents and ideas of 'fresh thinkers' with our proven talent is a solid success principle.

We must gain market share against competitors. This is actually easier to do in a tough economy than in a booming one. However, it requires considerable foresight, planning and dedication to see it through.

Third, we must gain new ideas for products, services and offerings that don't exist today by engaging our customers. Your company should always be anticipating your customers' needs and asking each directly, "What else could we do to help you achieve your objectives?"

Accordingly, anything that a company can do to retain their people, grow their knowledge, and gain new people, the more likely they are to have stronger relationships with their customers and become an industry leader.

Without exception, the underlying success determinant of all three strategies begins with your people.

I believe a company's people come first, and the customer second. If this is so, your people will in fact take care of your customers. Hence your customers will take care of you through their buying decisions.

 


 

Roy Chitwood is an author, trainer and consultant in sales and sales management and is president of Max Sacks International, Seattle.