Management Secrets by Mary Elston

Freeze, freak or fight. These are common ways we react to stress. Want to try out all three in one big swoosh? Drive across town during rush hour — yeah, that’ll do it. Did you catch all three stress reactions? I did; both observed and applied (kidding, grin). If you’re a manager, another way to try out all these stress responses is to repeatedly experience the back and forth swings in the economic recovery.

How are you guiding your business or team with this stressful wave-like market motion in mind? Is the economy improving or isn’t it?! Are you frozen in your current management approach to the teeter totter market; not taking any action at all? Are you freaking out or running in the other direction (the “flight” response to stress)? Or are you fighting back with strategies and actions that keep you moving on a future-focused track? You may be surprised to hear each of these reactions can be good or bad depending on timing and circumstances. Good stress, bad stress; what’s the difference, the best way to deal with it, and better manage your group and business world? For the next several weeks we’ll be looking at options for managing market stress to your advantage.

Freeze. This is a good stress reaction when you don’t have enough information or small changes in the economy haven’t been consistent enough to warrant business adjustments. It may be okay to freeze for a while as you continue to monitor the situation, gather data and maintain market vigilance — being careful not to wait too long. Freezing is a bad reaction to stress when economic swings and diminishing revenues establish a negative pattern. You may be frozen because you don’t know what to do, you’re stuck in your comfort zone (complacent or scared to tackle change), or inappropriately waiting till things get better. Stop! Managing market stress by freezing in your tracks often prompts comments such as: Hello? Is anyone home? Wake up! Doing nothing for the long term can place you in the loser category — don’t let it! Break free from the freezer, thaw out and get moving.

Since freezing usually isn’t your best option, start managing assertive moves to make your business and team visible and vibrant. Revisit familiar and previously successful tactics. It’s time to send out a fresh email to your customer list; make it fun and relevant, providing value-oriented information. Include product and service tips (e.g. best ways to use certain product features), website links for finding related information, the newest hot topics in your industry, along with humorous or “ah hah” moments which helped customers maximize their value. Change up the look of your email too. Have your web master add a new banner, eye-grabbing photos and colors. Integrate your brand with everything touching your customers from email to voice mail, signage to reminder service calls, Websites to what’s coming soon. Manage your efforts with revenue in mind while making your brand and business memorable.

That covers how to manage our first stress reaction – Freeze. Do you freeze when management or market stress hits or do you react in a way that avoids getting stuck on the wrong side of moving forward? Let me know how you’ve previously pushed past the “freezer zone” — send me your input and comments. Join me in a couple of weeks for the next segment in this series and we’ll explore another avenue for managing good and bad responses to market stress … see you then. *

*excerpted in part and reprinted from Mary Elston management column with permission from Soundings Publications, LLC.

For the last several weeks in this blog series we’ve been taking a look at market forces that have shaped a new customer mindset. At the same time, we’ve been walking through what you, the insightful manager, must take into account as you navigate the current economic environment and this new customer perspective. What else have we looked at? When you consider the stream of events which have influenced how the general market place looks today, this newly formed customer mindset isn’t all that surprising. Consumers now have a stronger, more ingrained value-based thought process than has been seen in quite some time. This value-oriented approach is driven by factors at the foundation of consumer financial viability — employment, housing and savings rates – all of which experienced serious setbacks in recent years.

Because of this, many surviving companies and independent entrepreneurs have a refined business model that’s different coming out of the recession than the model they had going in. They’ve likewise taken advantage of a bright spot these same market forces have produced; expansion in the service sector or other value-driven areas. Those who lasted through the lull also navigated the economic storm by judiciously managing costs, dynamically driving responsiveness to changing consumer needs, and proactively protecting customer relationships. They have a good handle on maintaining their profitability as they move ahead because they are actively taking the new customer mindset into account while aggressively pursuing competitive market positioning and pricing.

In what other ways have managers adjusted their business model? They are likely paying greater attention to what customers really want – not what they want to sell them. This is huge. Listening to buyer’s preferences is central to their market maneuvers. There’s a strong awareness of filling customer needs and, more than ever, using value-oriented techniques to bring consumers in the door, expand wallet spend by each customer and retain customers they already have. Sloppy or lackluster customer loyalty programs need not apply. Little things like a 10% off coupon, a complimentary introductory service and much more are essential in today’s business climate. You won’t find market survivors expecting the economy to return to previous levels of lucrative spending — they know it won’t.

What does this mean to you, the manager?
With the market bottom projected to continue through part of 2012 and a new value mindset for many buyers solidly in play; a fresh business model is mandatory. The future involves a smaller world with slow growth and less volume for higher priced discretionary items. As a manager in today’s economy, your navigation challenge will be to recognize and work with changing economic forces, realize your need to adjust for this latest consumer class and amend your business approach accordingly.

Remember the navigation anecdote I shared at the beginning of this blog series? It’s different with business models. If you make a wrong turn along the way there will be no automated navigation lady telling you to: “Make a U-turn at the next intersection.” You’ll have to figure it out yourself — and I know you will — because you have already plotted a course for continued business success; an extension of the course you plotted for surviving the downturn in the first place. Well done. For those managers who haven’t updated their business model yet, get going! There’s revenue waiting for you at your destination as long as your journey includes savvy, realistic market navigation.

Drop me a line and let me know how you’ve managed your way through business model shifts in the past … good and bad. I’ll see you again in a couple of weeks with another fresh Management Secrets blog series.*

*excerpted in part and reprinted from Mary Elston management column with permission from Soundings Publications, LLC.

When driving in your car to a new destination, navigating your way through an unfamiliar part of town can be tricky. As a manager, it can be even trickier to navigate your way through a challenging marketplace with customers who are lean on jobs and may be challenged by difficult personal finances. All of these factors are contributing to a new customer mindset. In my first blog release in this series a couple of weeks ago, I mentioned a few facts which illustrated why customers now have a different mindset which managers must take into account when leading their business or team in today’s economy. I also promised I’d share additional detail — let’s get into that now.

How is the consuming customer doing when it comes to personal savings? Previous trends in personal savings rates chime financial foolishness with a clobbering clang. The U.S. Department of Commerce, bureau of Economic Analysis advised in late November 2010, personal savings rates ranged between 7-11% from 1959 through the 1970’s, hitting a high of 12.2% in August of 1981. After that, U.S. consumers steadily saved less and less for over 20 years, sinking to an all time low savings rate of an emaciated 0.8% in April, 2005. Yuck. Talk about living on the edge and betting on the come. Since November, 2008, savings rates have improved to the 5-6% range, with personal savings running at 5.7% as of October 2010. Better — and part of the reason for a new consumer class, customer mindset and business model reality.

With housing and employment meltdowns, many consumers finally realized living on the economic edge is incredibly uncomfortable, especially when losing your job throws you into a nasty fiscal tail spin. Those with savings fared better. Others continued being money smart and even more conservative. Now we’re getting to the meat of the matter –the result is a new customer class of value minded, money conscious, careful spenders. The former “aspirational buyer” who wanted to emulate the rich by buying luxury items on impulse is a thing of the past. Consumers have a new mindset and everyone is more sensitive to the money they spend. This means large, high priced discretionary items loaded with frills (cars, boats, jewelry, electronics and more) don’t have nearly the following they had before.

Middle class Americans need affordable options or they’ll make do with what they have — or worse – remain priced out of the market entirely. Manufacturers, marketers and managers who are embracing this message are cranking up the volume on value-driven lines to attract buyers who put big spending on hold. As an example, value priced cars have essential features but are lean on amenities and additional accessories. Selected dealers have now rolled smaller, less expensive models onto the showroom floor and are offering value-oriented options when available. The result is an appealing alternative for the value-minded buyer. While tough loan options for the foreseeable future may limit buying to those who have ready money, other buyers with stable jobs will likely qualify for loans when the lending market loosens down the road.

With this new consumer class, how should you manage your business model; what changes should you make? Smart managers and business owners know you have to change to survive in today’s market reality — it you don’t, you won’t last. We’ll talk about what smart business model changes astute managers have made in my next blog release. In the meantime, what changes have you made as a manager given the new value-based customer mindset? Has it impacted what you do? Send me your comments …. it’s great to hear how the real world is affecting the way you manage. I’ll be back with the conclusion to this series in a couple of weeks.*

*excerpted in part and reprinted from Mary Elston management column with permission from Soundings Publications, LLC.