MSNBC - Tips on How to Recession Proof Your Business by Uncovering Competitive Advantages
Jaynie L. Smith sits down with MSNBC to discuss why it is so important for companies to uncover and incorporate their competitive advantages within their marketing and sales messaging - A matter of staying ahead of the competition.
Commentator: With talk of the economy heading for a recession, now is the time to separate your business from the rest of the herd. Jaynie Smith is President of Smart Advantage; a marketing management firm that helps companies create their competitive advantage. She is here to give us some tips from her book, Creating Competitive Advantage - Give Customers a Reason to Choose You Over Your Competitors.
Hi there Jaynie thanks for joining us.
Jaynie: Thanks JJ, nice to be here.
Commentator: It’s great to have you here. I’m looking at your points here, and the first one here says, know the pulse of your customers. Now obviously you should do that at any time, but I suspect you have to know that it may be changing in harder economic times.
Jaynie: Absolutely. One of the things I find is that very few companies, large or small, get a good read on their customers. And they don’t understand the value of a little bit of market research. And here’s what happens. They have a dangerous disparity. They might be selling what they think is important A, B and C, and maybe this year A, B and C is important, but next year or six months from now in the recession it’s D, E and F. We’ve got to keep our pulse on the customer at all times, because it is constantly changing. And as we move into this recession which I do believe is coming, it’s going to change at an even faster pace. And so organizations small or large absolutely need to be talking to their customers in a formal way in my mind.
Commentator: They also all have budgets to keep track of, so this is not a time to be spending a lot of money that you don’t need to be.
Jaynie: No, you’ve got to watch your spending and another way – I would like to expand that to say watch your cash. Watch your spending, don’t load up on inventory, know exactly what your turn rate is, and stock for that. Don’t stock the bottom 20% of what you’re likely to sell, keep your hands around it.
And then in the watch the spending part you’ve got to know your break even point. I am astounded how few companies really know their break even point. I mean, you can’t watch a football game without knowing your down line, how can you have a business without understanding your break even point and really keeping your eye on it.
Commentator: Just to get to the other points really quickly. Focus on other products and services so that you spread your risk among more things.
Jaynie: Yes, if you for example sew shirts, well maybe you want to sew military uniforms or hospital uniforms for an industry that’s more recession proof. Go global. Right now we’re a bargain for companies overseas because of the dollar. Look for other ways as an outlet for your products and services.
Commentator: And finally keep your margin healthy. I know a lot of people might be tempted to lower prices right now just to keep customers coming in.
Jaynie: Yes, yes. You know, price always tends to be the tie breaker and it shouldn’t be. You paint yourself into a commodity corner if you buy business by lowering your price. If you understand your competitive advantages, we go into companies and find 50 to 100 that they didn’t even know they had. Companies will pay for more value when you can spell it out for them. But if you let price be the tie breaker, your margins will erode and now, more than ever, approaching recession, you must uncover and articulate your competitive advantages. You’ve got to know what they are.
Commentator: Do you think it’s worth setting aside and saying okay we’re going into some tough economic times, let’s really look at every single part of our business and then as we’re coming out of – even though these have been or these issues have been working for us now, let’s relook at them.
Jaynie: Absolutely. In fact, I tell folks there may or may not be a recession, but regardless of how you feel about that, all this stuff is important to do at any time, more so now. So yes, it’s not something you do today and then forget about. You should be doing it once a year in good times and bad times, JJ, you’re absolutely right. Keep looking at it. Your competitive advantages build confidence and remove risk in the buying decision. When you do that you minimize price as an issue.
Commentator: All right great, Jaynie, thanks so much for your help here.
Jaynie: Thank you so much.
Find out why over 100 companies worldwide in the past year have changed their marketing and sales messaging because of because of Jaynie's work. Learn how you can for your company.
