Video - Robert Craven on Winners and Losers in Recessionary Times
VIDEO: 6:15
AUTHOR: Robert Craven
Looking back on the post 2008 recession, who survived…?
The ones that put up prices (post-recession)? The ones that added significant value? Looked for the niches?
Were they the ones who did well?
And the losers, what did they do?
The answer: Too little too late
So what did the winners do: take massive action, make the tough and brave decisions (= put up prices ASAP!)
Please don’t be a rabbit caught in the headlights. No victim behaviour please.
Transcription:
Robert Craven 00:06
How to be a Winner or a Loser in, in a recession. So I came across this article going back, believe it or not to 2011 How to be a Winner or a Loser in a recession. And it's me recounting what happened after the 2008 credit crunch really, and it's actually makes it makes amazing reading for now, you know, because so let me just go through is so it takes a bunch of case studies of different people and looks at what they did and what actually happened.
Robert Craven 00:36
So number one, an accountant who employed 70 people, he put up his prices by 18% and 26 weeks later, that's half a year, they reported they only lost three clients confirms what Robert Craven says about put up your prices, if you can, quote The profitable clients from hell, who were buying on price. They were the three clients that they lost, but they lost none of their valued and better clients. Overall profit was up 15%. So the key theme in that instance was put up your prices. After a recession.
Robert Craven 01:13
I took number two as an estate agent, they employed nine people, they lost six staff. They closed an office they focused on selling premium properties only. They doubled their fee rate. Yes, they doubled their fee rates. And it's moved from loss making into probably his best year ever in terms of profit. key theme is put up your prices if you can post recession, not now. But coming out of the recession. What I reason I wanted to share this with you is to give you a taste of what you need to do. When we come out of this COVID-19 thing what we need to be thinking about as we go into 2021.
Robert Craven 01:54
Number three, a precision engineer who employs 15 people. He focused on adding value and understanding what the client endpoint was. He became obsessed with meeting all the key buyers and their teams. Know price cuts. Result sales were up by 7%. And the theme here is sell premium priced added value products. What does that mean for digital agencies added value that focuses on added value not doing the standard, but by offering things to your clients that will add significant value in their eyes, not your eyes in their eyes. Number four was a haulage company that had these are all true businesses that we worked with way back when the haulage company that employs 120 people that were hit by the sales crash and by the fuel price rises, they created an exclusive platinum service, which has stopped the losses redundancies have left the businesses slimmed down as possible. They're using temps to take up the slack profits up by 3% theme again is if you can you sell premium priced, added value products.
Robert Craven 03:06
Not everyone's going to want the platinum product. But normally there's about 11 13% in any marketplace of people who will buy a platinum product and even post recession people will still be buying Ferraris, they will be people who have the people who have been running online casinos they will be there they will be spending their money not everyone will be trying to sort themselves out. Number five was a web design company employed four people, they sacked their underperforming staff, they became totally focused on sales and marketing and measuring results. They put their prices up by 10%. The result was revenues up 20% profits up 25% key thing, do all the stuff we've been talking about before.
Robert Craven 03:53
Now before we get carried away we need to compensate and see another set of stories 12 person web design business they ignored the sales collapse. They avoided doing any marketing they now closed a hotel pub chain employing 65 people. They waited for the turnaround but the insolvency practitioners got them first now closed, a recruitment agency employee nine they never recovered from the collapse in sales, the business haemorrhage cash for five consecutive months because the sales line wasn't strong enough. And then it dried up and are closed a book shop they maintained that the internet and the bigger chains would never beat them at their own game. They didn't realise that they needed to start playing a different game and I now have ironically close now but I now have a case study of Mr. B's emporium and bars which is a fantastic bookshop which can charge premium prices.
Robert Craven 04:55
The theme from the losers was almost always and this is my point. Same from the losers was almost always too little too late, not recognising how the business environment how the rules have changed irrevocably. It would never be that year 2007. Again, the theme from the winners was just a simple if you can, if you can put up your prices, stop competing on price, look for the niche, focus on adding value sack your underperforming customers. So the main lesson is take action. And it says here, and yes, it really is that simple in the article. I don't think it is that simple. I think it's really, really tough and really, really hard. I take my hat off to you, because you're making incredibly tough decisions in order to figure out what's going on. It's not easy, there will be losers. There will be winners, but I think the winners are the ones who are taking action. They're not rabbits in the headlights not knowing what to do, and they're not people who are feeling like victims. So that's it really the main lesson is take action.