Marketing in uncertain times
It’s easy to resort to the proverbial ‘all talk and no do’ in these uncertain times, but there are many initiatives that businesses can ‘do’ to stay healthy. Angela Tufvesson reports.
Negative thinking is a strange phenomenon. It gets people so absorbed in analysing a problem that they stop considering ways of solving it – they ‘think’ rather than ‘do’.
Submitting to the doom and gloom of the GFC (yes, the global financial crisis now has its own shorthand) is understandable given the proliferation of media reports.
Yet as reported in the March/April issue of Connected Home Australia, many in the home automation industry are surprisingly upbeat about the road ahead.
From a practical perspective, distributors are implementing several initiatives to ensure their business remains profitable – and their state of mind optimistic.
Graham Marshall is national sales manager of custom installation products for Amber Technology. He believes thorough inventory management is crucial in dealing with price rises.
“It’s important not to hold too much stock in the hope that something may happen,” Graham says.
“A sound understanding of which stock is effective and which stock is not moving will ensure you don’t miss out on a lucrative sale down the track.”
Nigel Macara of Audio Marketing, the distributor of SpeakerCraft and Krell, says, “It’s a difficult period because we’re still waiting to see what happens with prices.
“Some brands have such a well-known range of products that we need to carry them regardless of any economic uncertainty, but we just vary the numbers purchased.
“It’s important to try to build a little more incentive in there for the purchasers – your direct customers and the end user – while maintaining a competitive price.”
Trade-in schemes have long been a popular way of increasing sales. They encourage installers to update to later models, boosting stock turnover for the distributor and installer. The end-consumer also benefits as the recipient of premium technology.
“We’ve often had trade-in schemes – I do it with traditional products,” Nigel says.
“Combining trade-in schemes with bonuses works well – additional cables, multi-buys, that sort of thing.”
The danger here is the risk of cheapening the product, and Nigel says it’s essentially a balance between adding incentives while retaining your integrity.
This brings us to the issue of customer service.
Home Theatre Group managing director Peter Curley believes an understanding of the changing market is crucial to success.
“You must know what is happening in your specific market so you can give customers what they want – it’s as simple as that.
“We as distributors need to be aware of our environment and support our customers, as their clients are becoming more discerning in their choices and are looking for increased value.
“If you cannot supply a particular product, have an alternative for your customer.”
Nigel says personalised service is the key.
“Getting through these tough times will depend on our relationships with one another. Offering tailored service to each of your customers is a great way of maintaining and developing good relationships, thereby strengthening your business.”
Excellent service doesn’t cost a cent. It’s a matter of communicating a consistent, market-specific message to your clients in a language they understand.
Canohm national sales manager Robert Costello has adopted a sensible approach to matters of the hip pocket.
“This year we are looking to break even, especially as we don’t know what the full force of this ‘crisis’ will deal us,” Robert says.
“So far we have managed to absorb a lot of the price increases, as we had a reasonable amount of stock on hand.
“Currency exchange rates have pushed up our overseas buy rates at a time when you don’t want to put your prices up – so we’ve increased the prices only for our radio range.”
He firmly believes that dropping prices in response to reduced sales should be avoided.
“If your business is declining you shouldn’t drop your selling prices at the same time – otherwise you would be making a quarter of the original net profit. If sales are down don’t reduce your margins.”
Amber Technology business development manager David Small shares this pragmatism.
“Sometimes dealers worry about prices too much, because they see them every day and they see them jump,” he says.
“For example, we had a guy come in the other day to look at a product. He had not been to a dealer for it before. We showed him the new price list and he thought it was terrific.
“So people need to be aware if the customer has not seen the old price and simply say, ‘this is the price today’.
“Every industry driven by imports is in the same situation.”
None of the distributors interviewed for this article reported any big changes in the way they market their products or, for that matter, in the way they run their businesses.
It seems they are refining existing strategies and adopting a good attitude.
“If you remain positive there’s far greater chance of successfully coming out the other side of this crisis,” David says.