I don’t know about you, but we’ve been very busy. Our clients came out of the pandemic mostly intact and realized all their materials and promotional items were old and out of date. Many decided it was time to re-brand and refresh.
Just what we love to do!
Unfortunately, some are starting to recognize the price increases aren’t going away. That supply chain issues are still with us. And they are starting to worry about the impact, not just for their promotional programs, but their businesses. The discussion keeps popping up about the possibility of a recession in 2023.
One troubling aspect I’ve started to hear is, “we are rethinking how much we will spend on our employee holiday gifts this year”. My first question is why? And they have admitted to being concerned about what 2023 sales and profitability will bring. They are starting to think about cutting budgets; and typically marketing and promotions is one of the first to be cut.
We immediately discuss the importance of keeping their employees happy and appreciated. They may have to cut back on some areas but this shouldn’t be the first one. Unemployment in most areas is at an all-time low and many employees are “writing” their own ticket to go somewhere else. Now is not the time to reduce your appreciation of how much your employees mean to the lifeblood of your company.
If you have customers that are starting to think this way for their employees or their customers you may want to help them by walking them through the pitfalls of that decision. If their employees or customers think that the company is starting to experience financial hardship they may jump ship. Then the perception becomes the reality.
As most of you know, I’ve been in business for quite some time. I’ve been through recessionary times before. Now is the time to work with customers to help them develop strategies to ensure they are seen throughout good and bad times. A few steps that are worth considering for both your company and your customers:
1. Help your customers streamline their processes. Maybe it’s time to set-up an online store for their employees to order their promotional items and apparel that you’ve developed. With guaranteed minimums you can help your client purchase what they need at a discount while you still make a reasonable profit. It will save their employees time so they can be more productive in other ways.
2. Help your customers plan ahead. One way to help your customers save money is by planning ahead. We’ve had six projects in the last month that were produced and shipped rush! I always cringe when I see money wasted on overnight shipping. Let your customers know you are their partner for all their projects and can help keep them on schedule for timely deliveries. And of course, without rush you will be able to provide them with more creative solutions that help them stand out!
3. Stay closer in touch with your customers. Many of us were staying in close contact with our customers during the Pandemic. Why not? We weren’t necessarily that busy. But now, we’ve been busy again and maybe those good habits have waned a bit. Make sure you are contacting your customers on a regular basis. Ask them how they are doing? How is business? What are their plans for the next 3-6 months? Offer suggestions on how they can reach their customers more effectively. Remind them that their employees need to be appreciated during these times too and provide creative solutions for packaging and delivery.
4. Begin diversifying your customer base now. While we all try to do this regularly, I think we all get pigeonholed into categories. For me, while I love customer referrals, they tend to be in the same industries, so now is the time to network and expand your efforts for diversification. Develop a list of companies in your area that tend to be more “recession-proof” than others. Some include health care, government, IT and education. For example, enrollment is typically up during recessionary times. Help colleges and universities in your area recruit and welcome new students.
5. Build-up your company financial reserves. It’s always a good idea to have at least 3 months of your expenses in reserves. In planning for difficult times or a recession, you might want to consider up to a 6-month reserve. Start now cutting back where you can or postpone large investment purchases (new computer systems for example). And, as times get tough many of your customers may not stay on top of their net 30 terms and start paying you in 45 days or more. Can you handle that if you pay your vendors in 30 days? Now is the time to negotiate better terms with your vendors. Be honest with vendors and ask for a little extra time for when you need it. In my experience, most are willing to work with you.
6. Evaluate the services you subscribe to. Are they all necessary? We evaluate all our services on an annual basis. From car insurance, to phone services and IT services to subscriptions. Call and ask if there are any promotions, rebates, discounts or other ways you can cut your monthly bill. Each year we end up finding new plans that save us money without cutting our services.
7. Cross Train your Team. Make sure everyone on your team knows all the ins and outs of the various functions of the business. Can everyone do a purchase order? Do they understand pricing? Do they know your top suppliers and products? By having a team that can “do it all” you will be able to pivot quickly if someone leaves or you have to cut back.
8. Stay on Top of Industry Trends. If budgets are tight many customers are going to want to make sure their budgets are stretched as far as possible. If you are keeping up to date then you’ll be able to make sure they stand out from their competitors and continue to thrive in harder times.
Obviously, this list is nothing new and basic good business practices. However, I have found it never hurts to be reminded. I always end up saying, “wow, I used to do that?” Sometimes we get busy and stop our good business habits. Maybe one of these will help you continue to prosper no matter what the future brings.