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The Big Picture
1 Mar, 2009 By: Harvey Goldglantz Pest Management ProfessionalThriving in a recession, seriously? Some pest management professionals (PMPs) may read that and wonder whether or not I have lost my mind — but, others are nodding with affirmation.
Grow Your Business in a Recession
I can say with first-hand knowledge there are many PMPs that have not only survived the economic tornados of the past year, but are thriving.
Entrepreneurial visionaries view this economy as not only challenging, but opportunistic — a chance to overtake their competitors through strategic and tactical gamesmanship.
There are a number of key ingredients necessary to take control of your business in the midst of the most challenging economy since the Great Depression. But, before I get to those ingredients, it's important to take a look at the reality of the marketplace.
The Cold Hard Facts
According to the Bureau of Economic Research, the United States' economy has been in a recession since December 2007.
We've witnessed the collapse of the housing market, an almost 50-percent decline in the stock market, the freezing of credit markets, the highest unemployment levels in 17 years and historically low consumer confidence.
Businesses are reorganizing or vanishing, and personal wealth has contracted to the point of strangulation. And who will ever forget the meteoric rise and fall (and soon to rise again) of fuel prices?
Fear has replaced arrogance. Caution and prudence have replaced self-indulgent, credit-driven spending. The "I want" economy has been replaced by the "I need" economy. Value rules.
Looking Forward (short-term)
No one knows for certain what the long-term effects of the government's massive bailout will be, but almost all the economists and regulators concur that, for the short-term, things will most likely get worse before they improve.
Nouriel Roubini (professor of economics at the Stern School of Business, New York University), Tim Geitner (U.S. Treasury secretary), Lawrence Somers (director of the National Economic Council/past-president Harvard University) and Ben Bernanke (chairman of the Federal Reserve) have come to a consensus that 2009 will be a watershed year.
If their assessment is correct, this year will first bring a deepening of the recession, a jump in the unemployment rate to between nine- and 10-percent, a possible partial/limited nationalization of at least some key banks and the need for additional and substantial stimulus monies.
Looking Forward (mid-term)
When things begin to improve — which could be probably late this year or early in 2010, according to those experts — it could be followed by high credit card interest rates, low credit-limits, tightening of the monetary policy (with increasing interest rates), high fuel prices and increasing inflationary pressures.
Additionally, payback of the deficit will rest squarely on the backs of every employer. The short-term tax breaks, to help kick-start the economy, will soon vanish into tax burdens.
But, there is some good news. Some of the greatest companies in our country were born out of, and flourished during, severe economic downturns.
Here are just a few companies that overcame adversity with vision and tenacity:
- Proctor & Gamble began during the financial panic of 1837,
- GE was founded during the recession of 1873,
- IBM was born during the "Long Depression" between 1873 and 1896,
- United Technologies Corporation was a baby of The Great Depression of 1929,
- FedEx prospered and grew during the oil crisis and recession of 1973.
The Big Picture
The above success stories are illustrative of the fact that companies can, and do, increase revenue and profit during financial downturns, recessions and yes, even depressions.
How can you join their ranks? Simple, just take into account and put into practice these six principles:
1. Thought
2. Planning
3. Execution
4. Follow-through
5. Flexibility
6. Leadership
These are the fundamental macro-economic ingredients for growth and profit.
Leadership-Driven Service Organization
Strong leadership, funneling into a teamwork-driven organization, produces a customer-focused, value-driven and profit-producing business.
It should be your goal to produce a work environment that focuses on delivering this model. Doing so will result in a service driven delivery system that produces customer loyalty, low attrition rates, minimal service skips, high referral rates, maximum renewal rates and a soaring number of add-on sales.
Internal quality produces employee satisfaction. The result of employee satisfaction is employee loyalty.
When employees are loyal, they are productive. Productive employees produce value for their customers. When employees deliver perceived value their customers are satisfied. When you have satisfied customers, customers exhibit loyalty. Customer loyalty leads to profitability and growth.
It all begins and ends with leadership.
Delivering Perceived Value
In case you haven't guessed it by now, marketing, selling and delivering value perception is the magic ingredient that will be your ticket to growth and profit in any economy; even more so, in one that is depressed.
As the times get tougher, discretionary dollars become selective. If you're delivering value at the top of the spectrum, you'll be low on the cutting list of discretionary expendability.
Companies that thrive during these trying times do so because they're visionary, entrepreneurial and opportunistic. One thing is for sure: more people spend time worrying about the future than preparing for it.
You can reach Goldglantz, PMP Marketing Matters columnist and president of Elkins Park, Pa.-based Pest Control Marketing, at 215-782-1150 or e-mail hgpcmcinc@aol.com.
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