Building A High-Demand Business
My wife and I are huge fans of Michael Bublé, the young singing sensation who has effectively revived the old standards of the 1940s with a style that is as contemporary as it is classic. A throwback to the great Frank Sinatra, Dean Martin and Bobby Darin, this young crooner packs thousands of screaming fans into sold-out arenas with his interpretation of songs that are sixty and seventy years old while remaining current and relevant to a predominantly young audience. Two weeks ago my wife and I were among the fans who attended his concert at the Bank Atlantic Center in Sunrise. As I stood in line waiting to get in to the arena, I looked back at the throng of people walking up behind me and the seemingly endless row of cars still inching their way from the expressway into the cramped parking lot. In awe, I said to my wife, “It must be nice to be so good at something, and in such high demand, that thousands of people would be willing to pay good money and endure the inconveniences of travel, heavy traffic, and long lines just to come see you, or hear you sing, or buy what you have to offer.” Then I realized, though I’m no Michael Bublé, that’s what I strive for in my business every day. Don’t we all?
We can all make a case for how the economy has affected our business, either directly or indirectly, but even with the recession there are still plenty of businesses doing extremely well. It’ all about demand. Companies having to do with the GREEN movement such as renewable energy and clean technology, and those that cater to the aging Baby Boomer generation are expected to grow despite the recession, while companies specializing in credit counseling, debt and budget management, consolidation and debt settlement are growing precisely because of the recession. In the end it doesn’t matter what industry we may be in, there are certain qualities that we can develop for our businesses that will always be in demand – regardless of the economy.
Price to Value:
Debates over pricing strategies are as old as currency itself. Setting the right price to value is critical because it affects every aspect of a business. Price points are prices at which demand for a given product stays relatively high. But in a recession, where survival is the name of the game, many companies are lowering prices just to cover costs and give themselves a chance to remain in the market. As a result, the majority of the companies in a given industry are forced to reevaluate pricing strategies to maintain product position. In these situations, while it is imperative for a company to reduce overhead and lower costs to account for price adjustments, it must never lower its standards or the value it creates for its customers. We should always seek to provide more value than what our clients pay us for. Please don’t misunderstand, I’m not proposing that you undervalue yourself or your business, but your clients should always feel that they received more value for their money when doing business with you as opposed to your competitor. Value will always be in demand – no matter how bad the economy might be.
How much is good service worth? That was the subject of a recent study in England by the Chartered Insurance Institute (CII) and Ernst & Young who found strong consensus that the insurance industry is not providing good enough customer service to its mid-corporate customers according to 69% of brokers and 87% of insurers that were interviewed. The study concluded that the insurance industry could save £80 million per year, or $121 million US, by reducing duplication and improving customer service. Mark Radburn, chair of the CII’s Broking Faculty, says: “One of the key elements of the report is the requirement to improve our understanding of the customer’s needs. To make this achievable we would need adequately trained staff and a more professional approach towards customer service. The market needs to work together to improve professionalism and challenge ourselves to deliver ‘world class’ customer service.” Service quality will always be in demand – especially in a difficult economy.
At the end of the day business is all about the relationships we form through the exchange of value. People prefer to do business with people they know which is why repeat and referred business is so effective and yields a higher rate of return over time. In our current cut-throat economic environment, relationship-based businesses tend to fare better than industry averages due to increased customer loyalty. Additionally, research shows that a relationship-based approach to sales boosts performance and increases the likelihood of residual sales. Relationships will always be in demand – regardless of the economy.
The pendulum of public perception toward business has swung away from the decades-long greed that culminated in the recent sub-prime mortgage debacle toward a more socially responsible view of business. Now more than ever customers are attributing a higher value to socially conscious organizations and many businesses are finding that in addition to all the right social reasons, social responsibility is good business. The great Sir John Marks Templeton said it best, “Those who do good do well – in any economy.”