How to Survive a Recession
(Or Just Beat Your Competition Cold in any Market)
August 11, 2008
Author Wes Ball shares some strategies from his book, "The Alpha Factor: The Secret to Dominating Competitors and Creating Self-Sustaining Success"
By Wes Ball
Any time business managers hear the word "recession," they start looking around for ways to weather the coming storm. That usually means immediate budget reviews with plenty of cuts on the revenue-generation side of the company. As a result, sales, marketing, advertising and any other outreach-focused activities feel the crunch fast and hard.
But one of the interesting things research finds about "alpha companies"—those rare companies who are such dominant leaders that they actually control decisions of both customers and competitors—is that even the strongest companies are most threatened during recessions, not because of the economy, but because of these cost-cutting tactics. Competitors who continue to invest in outreach can easily undermine even the strongest marketer's previous strength.
What does that mean for sales forces and marketing executives?
Yes, you may be faced with budget cuts, but that doesn't mean you can't still make some big strides at your competitors' expense. The trick is to use the secret behind alpha companies to your advantage. After conducting more than 100,000 interviews and testing the findings with more than 75 businesses, we found that almost anyone can grow dramatically by using alpha principles, even if they seemingly have everything going against them, including deteriorating market conditions.
Alpha Secret #1: Stop focusing on price. No matter what your customer says about price, it is not the real issue. Remember, commercial buyers are paid to make you think it's price consumers care about; and consumers have been "trained" to say that price is everything, even though there are many other things far more important. If price were everything, there would be no Mercedes, no Victoria's Secret, no Harley-Davidson, no Starbucks, and no Tiffany’s.
Price is actually the last decision criteria, according to research. After a potential customer has evaluated all the things he believes might benefit him from buying your product or service, he finally weighs your stated price against that. If your price doesn’t hold up, then it is the fault of how well you are satisfying your customer's needs, not because of the price.
Alpha Secret #2: Focus on self-satisfaction and personal significance. Most marketers and salespeople focus on selling the superior functionality of their product or service. Wrong! Alphas lead their product category because they deliver greater needs satisfaction at higher levels of need: how a person feels about himself and how he believes others feel about him after buying your product or service.
If your customers start feeling smarter, bolder, braver, more influential, more appreciated, more knowledgeable, more admired or more fulfilled, customers will flock to your product or service. And who is in a better position than sales and marketing personnel to make your customers experience that?
Alpha Secret #3: Don't wait for breakthrough technology. The best innovations are the ones that fulfill the self-satisfaction and personal significance needs of customers. That doesn't have to involve technological breakthroughs at all. Satisfy at least the minimum functional needs expected by customers, but satisfy more higher-level needs, especially helping them feel significant, and you can make yourself the new leader.
Alpha Secret #4: Drive new expectations. Every alpha became an alpha by driving new, higher expectations among customers. Suddenly, every other competitor was forced to follow their lead. It doesn't take having the best-quality, the best-performing or even the best-value product or service. What it takes is a focus on satisfying those higher-level needs in a way that makes customers suddenly think of you as the leader, even if you have no hope of becoming the largest or the "best" in your category.
Ben & Jerry's Ice Cream will never be the largest in their category, but they made themselves the expectation leader. Everyone started following their lead to put more "stuff" in ice cream, after years of most ice cream marketers trying to make ice cream less and less fattening. The result was that Ben & Jerry's had the highest price with respectable volume that dwarfed the margins of many much larger marketers.
Bad economic times can be the best times to make huge jumps in market share and customer loyalty. Using alpha principles is the best and least costly way to accomplish that. And alpha principles are things that any salesperson or marketing staff can accomplish.
Wes Ball is author of The Alpha Factor: The Secret to Dominating Competitors and Creating Self-Sustaining Success (Westlyn Publishing, www.thealphafactor.com). He is also founder and president of The Ball Group, a strategic innovation and marketing consulting firm that helps businesses identify new opportunities for creating dramatic growth.
Sales & Marketing Management Magazine
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