In May the Bureau of Labor Statistics reported that 5.7 million jobs have been lost since the recession began a year and a half ago, and national unemployment is now close to 9 percent. What’s more, the descent of General Motors and other major employers into bankruptcy and other forms of restructuring has had trickle-down impact on many small businesses that depend on them.
Yet, even in the midst of the worst economic crisis since the Great Depression a good number of small firms are sustaining their sales performance. We know this because we surveyed a diverse pool of them last month: our registered website users and our Top Small Workplace- and Best Boss-award-winning organizations, to learn how they are adapting to this economy to maintain and grow their sales. This is what we heard from them:
What They’re Doing Differently
|Call old customers||54%*||62%*|
|Diversify product line/repackage products||39%||62%|
|Introduce new products/services||63% most common choice||85% most common choice|
|Spend more on marketing/advertising||39%||23% least named (tie)|
|Create innovative promotions||46%||23% least named (tie)|
|Provide additional training for sales department/staff||39%||39%|
|Cut back and try to ride it out||21%||31%|
|Nothing||3% least named||0%|
*Since respondents chose all measures that applied, the totals add up to more than 100 percent.
While both groups are concentrating most efforts toward introducing new products and services, our honorees report doing this to a greater degree than our registered users. And while a very small percentage of registered users report doing nothing differently, the least-used measures for our honorees are increased spending on marketing and advertising and creating innovative promotions.
Their Investment in Doing Things Differently
Digging deeper, we asked both survey groups how much time, resources, or money they’ve invested on the measures listed above. Using a four-tier range from “None” to a “Substantial amount,” here’s what they reported:
|Measure||Amount Invested – Registered Users||Amount Invested – Honorees|
|Call old customers||Some||Some|
|Diversify product line/repackage products||Some||Substantial amount|
|Introduce new products/services||Substantial amount||Substantial amount|
|Spend more on marketing/advertising||Little||None|
|Create innovative promotions||Some||Little|
|Provide additional training for sales department/staff||Some||Little|
|Cut back and try to ride it out||None||Some|
Both groups report investing substantially in the introduction of new products and services, while our honorees report a slightly higher (substantial) investment in product diversification and repackaging compared with registered users. The measure that has seen the least investment among registered users is cutting back and riding out the downturn, reflecting an aversion to merely sitting on the sidelines. Our honorees, however, say they have not increased marketing or advertising dollars.
We also asked both groups for qualitative feedback that supports how employee ideas or innovations have helped them increase sales. Notable responses include:
|We added a manger of PR and corporate communications who has pushed us to develop synergy across product areas and promotions in how things look and the way we speak about them. She has pushed us to go deeper with web marketing and exploring various ways to do this using Twitter, Facebook and YouTube.||Publishing||101-250||Manager|
|Our staff wanted to know how our market share was doing, so we dispatched drivers to our competitors, and they counted their delivery vans, then followed them to see how many stops they did. We compared the results to ours and knew we held a commanding lead. Two of the staff suggested we explore buying a weakened competitor. We sent out a message through vendors that we were looking for acquisitions. A competitor called, and we closed within 40 days. Now, as the economy is stabilizing, we have organic and strategic sales growth leading into market share growth.||Hospitality||51-100||Leader|
|Hiring great employees from our competitors has worked out very well for us. It has brought in potential introductions to new clients and fresh vigor.||Hospitality||1-50||Leader|
|Staff have been actively behind payroll reduction initiatives (furloughs, reduced work hours, etc.) in order to save jobs of co-workers.||Other||251-500||Manager|
|Our employees are given a bonus/recognition for any new idea they come up with that brings in more business.||Construction||51-100||Manager|
|Employees listening to customer feedback have come up with new ideas to retain current customers.||Professional Services||1-50||Leader|
|One of our employees has developed a great visual aid to help us track our successes. It charts both our revenue increases and our expense reductions. It uses symbolism specific to our industry, humor and play on words.||Travel||1-50||Leader|
|We are asking our employees to help productize and package our services based on what they are seeing in the market. These new products turned out to be an easier “sell” than our original product goals for the year.||Professional Services||1-50||Manager|
|Some of our employees’ personal relationships have resulted in new sales for our company.||Construction||1-50||Leader|
|Won back several old customers who had left us for a lower price – appealed to them based on the fact that we and they are small/American companies, and we need to help each other out.||Manufacturing||251-500||Leader|
We hope the results of this survey help you in your quest to maintain and increase sales as the recession continues.