MarketView

Growth Strategy For Challenging Times:

Invest In New Technology and Marketing

March 2009

They aren’t making headlines today, but there are entrepreneurs seizing the opportunities created by the current economic downturn to build for the future. Business Week detailed this principle very clearly in a February 23 article, "Start Ups in a Downturn."

The article’s message: in tough times every business has a fundamental choice to make. It can stand pat and try to minimize damage, or it can move forward and maximize the opportunities that always accompany economic downturns. Consider the following examples:

• Southwest Airlines, FedEx, Apple, Genentech, Hewlett Packard and Microsoft were all started during recessions or depressions.
• In 1975 when the economy and banking industry were troubled, Citibank invested $100 million in the unheard of concept of automated teller machines (ATMs.) Defying the skeptics who said the idea would never work, ATMs quickly won over consumers thanks to their speed and convenience. By 1981, Citibank’s share of New York’s deposits doubled. The same principles now apply to SiteWatch® and FastPass®.

Two Kinds Of Responses

Companies that stand still during tough times run the risk of losing customers, good employees, market share and initiative. Later when the economy rebounds they have a hard time regaining their momentum.

On the other hand, businesses that invest in new technology and marketing concepts often wind up gaining new customers (typically people who drifted away from competitors that stopped reaching out to them). When the good times return, these companies are poised for rapid growth.

The difference between these two approaches to tough times is clearly illustrated by contrasting McDonald's response to the recession of the 1970's to the lack of response on the part of Sears and K-Mart.

When the '70s started McDonald's was at the top of the quick serve restaurant food chain, while Sears and K-Mart ruled the retailing world. Fast forward 30-40 years and McDonald’s is still the Fast Food king, while Sears and K-Mart have become also-rans. Here’s why:

Consider A "McDonald’s Response" to the Challenges Posed By Today’s Economy

• Take steps to reinvent your business by changing the way you serve customers. McDonald's added drive-thru windows; you can add the convenience of an XPT self-pay station. 
• Remember, the convenience of ATMs revolutionized banking during the recession of the 1970s. 
• Reinvent your relationships with customers just as McDonald’s did when it began to serve breakfast. You can do this by introducing monthly passes with the SiteWatch Automatic Recharge Module (ARM). Enrolling customers in monthly pass programs changes the way they view visiting your carwash, from a “discretionary impulse purchase” to a fixed part of the monthly budget. 
• Customers are much more likely to eliminate discretionary purchases than fixed budget items when times get tough. So, building a large pool of pass customers will help you sustain a steady revenue stream during tough times. 
• Attract new customers by offering a greater value with prepaid cards and monthly passes. Customers want value but they are wary of deeply discounted services. Prepaid cards and passes allow you to offer them a chance to save money on a service they trust – yours! At the same time, you can still preserve the perceived value of your service by offering lower prices only to prepaid and monthly pass customers.
  
   

Learn more by contacting DRB Systems.
Click here or call 1-800-336-6338.