Every business experiences crises from time to time, from a headline-making natural disaster to something as minor as road construction that slows down traffic in the area. The companies that weather challenges relatively unscathed are those whose leadership
plans ahead and who adapt to change most effectively. These businesses continue to bring in dollars even when times are tough.
Back in the early1980s, when the national economy was experiencing a malaise, one business achieved a complete turnaround. A downtown gourmet shop and cooking school struggled to remain viable as interest rates soared to 20% and inflation grew out of control. Big-ticket items were not moving and shoppers had turned into browsers. The owners hoped that a consumable product with mass appeal might entice customers to buy again.
Chocolate was the boost that would fit into the gourmet shop perfectly. It presented many marketing possibilities and could be easily added to the inventory, in 10-pound slabs, direct from the factory.
Here are some examples of how the business marketed its new product:
- A huge sign in the front window announcing the chocolate’s arrival.
- Generous chunks of samples were handed out all over town, creating a frenzy for chocolate lovers who kept coming back for more and spreading the word about the product.
- An in-store display featured a wall of chocolate with huge slabs stacked like bricks.
- An easel was set up in the store and children were provided with melted chocolate to finger paint a picture to take home.
- Chocolate candy-making classes were added to the cooking school curriculum and related products were added to the inventory.
- A postcard was sent to tour bus operators inviting them to bring their bus loads of tourists for a free “chocolate show,” which consisted of a demonstration of candy making and a taste of the decadent confections. They came in buses of 47 people at once, with a record seven buses visiting in just one day. Tourists actually stood in line to make purchases of more than a hundred pounds of chocolate every day.
The buzz created by the marketing efforts caught the attention of the press, creating a huge amount of free publicity.
After just one year, the little gourmet shop sold over 16 tons of chocolate—from a space measuring only 800 square feet. Sales increased and held steady for the next four years. The economy started looking better around that time as interest rates began dropping and people returned to normal buying habits.
How did an obscure gourmet shop experience a surge in profits while other retailers barely hung on in the slumping economy? What were the lasting effects? How can you create a booming business when the economy slows or customers lose interest?
Here are some tips:
- Add a new product. Is there something out there that is compatible with your current product mix and which may also be an unexpected surprise? Perhaps vitamins at a gym? T-shirts at a restaurant? Books or greeting cards at a coffee shop? Homemade baked goods at a gift shop? Investigate how new products and services could increase your sales.
- Promote the product. The simplest and most effective way to start is with “cross trafficking.” In the case of the gourmet shop, plates full of chocolate samples were placed in shops in the neighborhood. A simple tent card with the shop’s name and address was placed in the middle of the plate. In return, tent cards, coupons and flyers about events were placed in the gourmet shop. This can be done as a partnership with many types of businesses. There’s a bookstore where therapists give five-minute chair massages, along with a discount coupon for a massage at the therapy center, and customers can put coins in a gallon jar to buy books for local schools. At the therapy center, there is a “book of the month” to peruse in the waiting room and a discount coupon for you to buy it at the bookstore. Connecting with a charity is a great way to add to the “cross traffic” concept.
- Big is better. Show off what you are doing by making it bigger than life. Make the sign in the window as big as your city codes or mall association will allow. Do your research about temporary signage, as in some cases the rules are not as strict as those for permanent signs. If you give out samples, whether of a product or service, be generous. Use a large display in your shop that conveys to people, “This is the reason you came here. This is what you want to buy.”
- Go for bulk sales. Instead of selling just one of anything, find ways to sell dozens at a time. Promote yourself to clubs and organizations and invite them to have an outing or meeting program, which you can provide for them, at your place of business. Now that you have a group, you can sell one or more widgets to each one of them. If they don’t come to you, it’s worth your effort to go to them. Pack up your widgets and your samples and your free information sheets and present your wares at their monthly club meeting. Word will spread and you will gain more customers and more opportunities to show off your product.
- Participate in community events. Check out local festivals and events that provide opportunities for sponsorships or vendors. Connect with a charity to donate for their auction or give prizes of your product or service to contest winners. Even a small donation gains a listing in their program booklet or your name on a flyer. If your product or service is seasonal, you may want to sponsor an event just ahead of the season and stock your shelves early so you’ll be ready.
Your efforts will not only help you survive the dry season, they will provide lasting benefits. You will gain respect in the community for your participation and for your success in managing your business in a difficult time. People will want to work at your establishment since it is so successful. You will establish a brand for yourself and your company.
And you’ll feel secure in the knowledge that by adapting to change and bringing in customers during tough times, your business will be better prepared to meet any challenge ahead.