Doing Business In Time Of War

Article: Shows strategies to maintain sales during the intial days of war and changes to make to ensure higher sales and profits once the war has ended.

Doing Business In Time Of War

America has changed how we go to war.

It used to be that war information was parceled out in small doses.

But with the advent of CNN, Internet coverage, embedded reporters, and wall-to-wall (24-hour) coverage by all of the networks, war has become a consuming factor in the lives of many Americans.

Once the war in Iraq starts (or natural disasters happen, terrorists attack, or other major news stories occur), many people will use much of their free time (and often part of their work time) glued to the media, where they become emotionally involved as the events unfold.

This affects us, as businesspeople, in many ways.

Most importantly, sales will most likely drop. Some of this is through consumers not having time to shop, some through a reluctance by both consumers and businesses to commit themselves in time of uncertainty, and some through our inability to generate enthusiasm to purchase when potential buyers minds and emotions are focused elsewhere.

So how do we, as businesspeople, do business in time of war?

Here are some strategies that we at WinningAtBusiness.com recommend to maintain and even build sales in time of war and other disasters:

1.   Be opportunistic with the media in your public relations efforts.
For the first part of the war, television news coverage will probably be impossible to gain, as 80-90% of news time will be devoted to the war, so it will be very difficult to get hard news coverage for anything.

This will cause many people who would normally be pitching stories to the press to shelve their publicity efforts until after the war is over.

But dont forget that every major newspaper and magazine in the country has many other sections to fill, like food, auto, fashion, lifestyle, seniors, sports, business, entertainment, etc. that probably wont be covering the war. Plus, every radio station, especially the talk channels, will need to fill blocks of time with non-war coverage.

Some stories will have additional interest in times of war, including stress relief, anti-terrorism projects, building love and unity within families, counseling, finance and debt management, communicating with friends and loved ones who are away from home, creating bomb-proof investment portfolios, insurance, how to explain war and death to children, etc.

This combination of lack of stories being pitched and continuing demand from reporters gives you a great opportunity to get a story run that you probably couldnt obtain otherwise.

2.   Be opportunistic in purchasing advertising.
The Gulf War taught advertisers that it wasnt a good thing to have their ads run right after pictures of smoldering tanks and dead bodies. Consequently, most major advertisers have a blackout plan in place that cancels ads when the shooting starts.

This leaves you an opportunity open to pick up advertising at an inexpensive rate. We dont recommend running your ad during war coverage (especially if it turns bad). But there will be an opportunity, during the first day or two of the war, when media ad salespeople will be deluged with calls to cancel advertising. If you would place calls at that same time, to actually buy advertising space, youre liable to be able to negotiate some great deals for advertising to be run after the war.

3.   Visibly support the troops.
Vietnam taught us a principle that now resonates deeply within the heart of many Americans -- that no matter your personal feelings about the politics behind the war, the troops need the support of those at home. Recent poll numbers confirm this, indicating that public sentiment has turned towards supporting the troops.

For example, WTMJ in Milwaukee, Wisconsin, created an online petition supporting the troops in the field. Not only did it garner 48,173 signatures, but it also generated huge goodwill for them in the Milwaukee market in the process.

What can you do to support the troops and to help rally the goodwill of others?

4.   Publicize your connection with the war.
If you have viable, real connections with the war, you may, want to publicize those connections (depending on the support you see for the war among your customers.) The place where this is most likely to succeed is with the local media, especially local television news stations who are looking for stories that localize the war effort.

Story opportunities range from having 10% of your staff on deployment, to having a government contract to supply something for the war effort, to how youre managing your small business when the boss is deployed, to the campaign to support the troops that you started in point 3 above, to one of the parts you manufacture being used on the troop transport vehicles. Of course, all of us have seen the publicity generated by the restaurants who poured their French Wines into the gutter, or renamed their French Fries as Freedom Fries, but unless youre first, you wont get the benefit of the publicity from these types of actions.

Be very cautious with this strategy though, to ensure that it doesnt backfire on you. It needs to be a real connection with the war, not just a way to manipulate people into buying your products. Some will create their own problems like a restaurant promoting their delivery service as a great way to be able to stay home and watch the war, and the sale of American flags and genuine Iraqi desert sand.

What crosses the line? Try the smell test – does it smell like a promotion? Giving a weeks worth of profits to the International Red Cross to support feeding Iraqi citizens during and after the war will work, but promoting your product as the official hamburger of the Los Angeles Coalition to Oust Saddam Hussein wont. Support works, blatant promotion doesnt.

But no matter how hard you promote your business, its virtually inevitable that your phones are going to stop ringing, customer traffic will whither, sales will decrease and your people will have time on their hands.

Unfortunately, the natural inclination in times like these is to run huge sales, cutting prices to buy more business.

We dont recommend doing this. Remember that your customers attention is focused elsewhere, not on running out to support your huge sale. So, youll pay lots of extra money to promote your sale, and the sales that result will be less profitable. The net result – an unprofitable sale!

Our recommendation? Instead of sweating trying to pull in more customers, spend this time doing those things that will build your business in the long term – those things that never seem to get done because of the pressures of day-to-day business from your customers. Analysis, planning, customer service and training are all potential tools.

Possibilities include:

1.   Analyze your customer base.
Who are your customers? Where are they from (plotting them on a map is oftentimes helpful.) What do they have in common? What businesses are they in?

But analysis does no good without application – how can you reach more people who are like your current customers? Create a plan to do so, with specific action steps to reach and convince them to try your products and services.

2.   Analyze the profitability of your current customer base.
If youre like most companies, a small portion of your current customers deliver the bulk of your profits, and most of the time, your biggest customers are not your most profitable ones. Create two lists, one ranking customers by net sales, and the other by net profits. Then look at the differences and why they exist. Is it what they buy? Is it because theyre a house account so you dont have to pay a sales commission? Is it how they buy, requiring less of your staffs time?

Next, look at your least profitable customers. What do they have in common? Is it possible to move them into profitability? How would you do that? Or, are they hopeless, and should just be fired? We make it a practice to fire 10% of our client base every year. Some we fire because theyre not profitable, others we fire because theyre a royal pain to deal with. And its amazing, every time we do this, another better company shows up to fill the vacuum, and business becomes easier and more pleasant.

Application: Create an action plan to make each of your customers more profitable. Consider especially the changes you can make to your product line, promotion materials and customer base to make that conversion.

3.   Analyze your product mix.
It seems counter-intuitive, but one of the best ways that you can build your profitability is to get rid of products that dont generate significant levels of sales. Remember that inventory, shelf space and working capital costs dollars, money that can be better spent in acquiring more profitable products or promoting the product line that you currently have.

Application: Rank your product/service line by sales volume. Then cut the bottom 5-10%. If you sell goods, return them to the manufacturer, or put them on clearance. If you sell services, remove them from your web site and other promotional materials.    

4.   Analyze your Web Site.
Business has clearly turned to the web. But most companies have sites that are years old, that look horrible, and that arent equipped to help customers do business online. More importantly, most companies sites arent written to get good rankings on the search engines, so they get no traffic.

Application: Do a thorough review of your site and its traffic. Make changes to make it relevant, to ask for orders, and to get it high on the search engines.

5.   Analyze your systems.
The best businesses systematize how they do key tasks, eliminating questions, standardizing behaviors and removing costs from the system. Key systems to check are marketing, order processing, accounts receivable processing, billing, job costing, and customer follow-ups.

Application: Develop at least three new systems to handle tasks within your organization, write system descriptions and train your staff to use the new procedures.

6.   Analyze your customer service practices.
Employees develop bad habits over time that turn customers away. Carefully analyze your customer service norms. How long do responses take? How empowered are your people? How do they deal with dissatisfied customers?

Application: Develop an action list of customer service problems that you need to resolve in your company, then get the training, do the performance reviews, and if necessary, replace the employees who create those problems.

7.   Analyze your customer needs.
In virtually every category there are some major unmet customer needs. You probably know what some are, but not everything.

Application: Pick up the phone or visit several major customers. Ask them to tell you about the biggest challenges in their business, and what they would like to see you do differently. Analyze your customer correspondence, ask your salespeople, and look at the industry literature for new products/services that you can offer and ways that you can change your current products/services to meet the unmet needs of your customers. Then create an action plan to better meet those needs.

8.   Analyze your business plan.
Are you hitting your numbers? Both sales and profits? What needs to be done differently to ensure that your year comes in on target?

Dont blame the customer. Look at how you can better meet their needs. The best companies flex, reforecast and revise their plans frequently to achieve the desired objectives. Remember also, that the most common practice of cutting marketing funds to hit profit numbers is the last thing you should do if sales are low. Rather, figure out how to spend them more effectively, test, revise and test again to generate the results you need.

Application: Prepare a revised plan, including reforecast numbers, action plans and measurements.

9.   Analyze your habits.
Almost every business develops bad habits over time. Perhaps its a single ad that gets run over and over again, with no testing. Perhaps its a focus on a single trade show. Perhaps its a total reliance on sales reps. Perhaps its a constant pattern of useless meetings. Perhaps its a reluctance to do business in a changing world. Or maybe its an insistence on a six-week turnaround when you could do it in two if your systems were revised. Most of these habits had a reason behind them at one point in time, but have never changed through laziness or lack of analysis.

Application: Make a list of the things that constitute the way we do business." Then analyze it carefully. Create an action plan to challenge and revise those habits that hurt your business.

10.   Analyze the value you add.
Businesses exist because they add value that the customer either cant or doesnt want to add. Unfortunately, the world may slowly change to the point where the value you add is no longer worth the cost required to obtain that value from you. Companies close every day for this very reason.

Application: Analyze the value you add versus what the customer really needs. Are you worth a continued position in the value chain? How could you add more value? What would people be willing to pay more to receive? Create an action plan to implement changes!

As you do these things, youll find that your short-term sales and profits decrease less than they might have otherwise and that youll find your business running at a higher level once the war ends – creating more sales and profits for years to come!

Who says that war will be bad for business?

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Don Crowther specializes in helping businesses build their sales and profits. For more information, contact him at info@winningatbusiness.com or for a free subscription to his free WinningAtBusiness newsletter, visit http://www.WinningAtBusiness.com