Customer New Attitude

8/4/2019 Customer New Attitude

1/75

Strategies to Improve

Your Business

Sue Smedinghoff

IL Small Business Development Centerat Harper College

Business Advisor


2/75

Strategy Discussion

Competitive Strategies

Risk Management Strategy


3/75

Strategy Discussion




4/75

Compete, How in this Recession?

Understanding RecessionPsychology

Buyers Emotional Reaction to theEconomic Environment


5/75

Slam-on-the-brakes Buyers

Feels most vulnerable & hardest hit financially

Buyers Emotional Reaction

Source: How to Market in a Downturn, Quelch & Jocz, HBR April 2009

Pained-but-patient Buyers

Tend to be resilient and optimistic about long-term;

not so for near-term

Comfortably-well-off Buyers

Feels secure about their ability to ride out the current andfuture bumps in the economy

Live-for-today Buyers

Carries on as usual andfor the most part remains unconcerned about savings


6/75

Essentials(Needs)

Necessary forsurvival or

perceived centralto well-being

Buying Psychology


Treats(Wants)

Indulgences;Immediatepurchasejustifiable

Postponables(Needs/Wants)

Needed or desiredwhereby purchasescan be reasonably

put off

Expendables(Wants)

Perceived asunnecessary or

unjustified

Perception of Needs & Wants

For Example

Food,Transportation,

Medical

For Example

CleaningServices,

Updated Image,Catering

For Example

Appliances,New Equipment,

Investments

For Example

Vacations,Redecorating,

New Building/Location


7/75

Buying Behavior

Influenced byEmotional Reaction &

Perception of Needs & Wants


8/75

Essentials Treats Postponables Expendables

Slam-on-the-Brakes

(hardest hit)

Seek lower-cost

products & brandsubstitutes, suchas private label

Deeply reduces

or eliminatestreats or seeks

low-costsubstitutes

Holds off purchases

of durable goodsunless emergency;

delays repairs &personal services

Doesnt buy

Pained-but-Patient

(cautious short-term; optimisticfor long-term)

Seek favorite

brands, but settlefor cheaperalternatives;stocks up ongood deals

Cut back

somewhat onfrequency &

quantity;emphasize value

Delay major

purchases; repairsvs. replaces; seeks

value & low costrather than extra

features; negotiate atpoint of sale

Deeply curtails

purchases

ComfortablyWell-off

(Secure short-

term & long-term)

No change;Continues to buyfavorite brands

More selectivebuying luxuries

Seek better qualityfor the price;

negotiate harder atpoint of sale

No change;May reduce the

mostconspicuous

purchases

Live-for-Today

(Carries on asusual)

No change;continues to buyfavorite brands

No change;continues to buyfavorite brands

May buy if there is agreat deal; otherwise

postpone

Can justify anypurchase; May

not expandbuying to new

types ofpurchases


Emotional Buying Declining MarketStable Market Mixed Market


9/75

Strategies to Co mpete


10/75

Essentials Treats Postponables Expendables

Slam-on-the-Brakes

(hardest hit)

Price

Smaller sizes forless

Private labels

Shrink sizes

Hold downprices

You deserve it

Layaway plans

Low-cost financing

Challenge penny-wise, dollar-foolish

Do-it-yourself

alternatives

Continue ads forfuture purchases

Pained-but-Patient

(cautious short-term; optimisticfor long-term)

Lower price

optionsPromote value ofbulk packaging

PromoteDependable

Brand

Reward loyalty

Alternative toluxury

Boosts morale

Simplify

options/features &offer at lower price

Promoterepair vs replace

options

Continue ads for

future purchases

Invest to capturecustomer when

ready to buy

ComfortablyWell-off

(Secure short-

term & long-term)

Continueadvertising

Emphasizeoutstanding

quality

Successful &

deserve it

Promote savingsfrom buying NOW

Missing out

if postponed

Discreetpurchasing

Impress wealthy

friends

Live-for-Today

(Carries on asusual)

Continueadvertising

You cant livewithout it

Convenient autocredit card

billing

Seize themoment

Monthly paymentplans

Quality of lifebenefits ofbuying now

New Must Haveproducts

Aspire to buywhen incomepermits


Strategies Declining MarketStable Market Mixed Market


11/75

Assess Your Business What type of buyers do you have?

Slam-on-the-brakes, Pained-but-patient,Comfortably-well-off, Live-for-today

How do they perceive your goods andservices? Essential, Treat, Postponables, Expendables

Match buyer type and perception to determinethe best competitive strategy!


12/75

Q & A


13/75

Strategy Discussion




14/75

A Story of 2 SistersBrenda & Mary

ofThe Ca kegirls


15/75

The Cakegirls, Who? Cakegirls Nationally

Known for Specialty &Lavish Wedding Cakes

Won $50,000 prize forFood Networks'"Last Cake Standing"

Featured WeTvs"Amazing Wedding Cakes

Made Bake Goods for

Bono & Queen Latifah


16/75

Bakery Devastated by Fire March 2010

Fire destroys Cakegirls bakery: Devastating, Heather Charles/ Tribune

Sisters Brenda &Mary devastated

after building fire

Al Podgorski/Sun-Times


17/75

Typical Disaster Timel ine

17

Respond

Contro l

Manage


18/75

Their Fire Disaster Story

18


19/75


19Saturday, March 27, 2010 6:00 pm

I just closedthe doors andturned off the

lights


20/75


20Monday, March 29, 2010 5:30 am

Respond


21/75



Respond


22/75



Respond


23/75



Respond


24/75



RespondI felt like I was goingto throw up. Just felt

nauseous


25/75



Respond

This is devastating.This is our livelihood.We built this from

nothing


26/75



Respond

This is terrible, horrible!Its a small businessowners worse nightmare.says Ms. Rayhill of Sugar

Syndicate


27/75


27Monday, March 29, 2010 10:30 am

Respond


28/75


28Monday, March 29, 2010 1:00 pm

Respond

We lost everything in this fire.Please apologize on our behalf

to our customers. We aregoing to do our best to reach

everyone.


29/75


29Monday, March 29, 2010

Contro l


30/75



Contro l


31/75



Contro l

We are just asking for alittle patience because

we lost everything in thisfire. Its been less than a

day I have noequipment, I dont even

have a rolling pin


32/75


Tuesday, March 30, 2010 1:28 pm

Contro l

We are going to goorder by order and tryto refund the money,

and hopefully our

insurance will coverall we lost


33/75



Contro l


34/75

Tuesday, March 30, 2010


343:23 pm

Contro l


35/75



354:03 pm

Contro l


36/75



364:11

Contro lWe are not trying

to scam anybody.We are honest

business women, and,of course, we care

about our customers

Heather Charles/ Tribune


37/75



374:32 pm

Contro l

But ultimatelythere are manythings we are

dealing with right

now


38/75



385:05 pm

Contro l


39/75



396:28 pm

Contro l


40/75


40

Manage


41/75


41

Manage

Initial Letter Posted to Their Fans


42/75


43/75

Bakery is a Total Losshttp://www.cnn.com/video/data/2.0/video/us

/2010/03/29/dnt.il.bakery.fire.wgn.html
http://www.cnn.com/video/data/2.0/video/us/2010/03/29/dnt.il.bakery.fire.wgn.htmlhttp://www.cnn.com/video/data/2.0/video/us/2010/03/29/dnt.il.bakery.fire.wgn.htmlhttp://www.cnn.com/video/data/2.0/video/us/2010/03/29/dnt.il.bakery.fire.wgn.htmlhttp://www.cnn.com/video/data/2.0/video/us/2010/03/29/dnt.il.bakery.fire.wgn.html


44/75

As of Today They are still NOT making cakes or taking ANY orders


45/75

WHAT COULD HAVE THEY

DONE DIFFERENTLY?


46/75

If Only They Had ABusiness Continuity Plan (BCP)


47/75

What is a BCP?

A plan that details how they willrespond, control and manage

their business in the case of an

unforeseen event


48/75

Fire Disaster Minimized


Respond

Retrieve Go Box from Fire Safe Location Put Plan into Action Contact Alternate Bakery Site

BCP Recovery Location


49/75



Respond

Expedites Replacement of Needed Equipment BCP Equipment List

Orders New Ingredients BCP Key Supplier/Vendor List


50/75



Respond

Notify Employees BCP Employee Contact BCP Call Tree


51/75



Respond

Contact Publicist BCP Critical Phone Numbers

Notify Press of Business Recovery Plans BCP Critical Phone Numbers


52/75



Respond Purchase New Laptop & Software

BCP Computer Software List

Download Backup Data BCP Vital Records

Access Order Information &

Access Bank Records, etc. BCP Critical Business Functions


53/75



Respond

Calls Averted Due to Press Release


54/75



Contro l

Museum Called and Order Confirmed BCP Key Customer/Other Contacts


55/75



Contro l

Groom Called and Order Confirmed BCP Key Customer/Other Contacts


56/75


Tuesday, March 30, 2010 5:00 am

Bakery Opens at New Location BCP Recovery Location

Manage


57/75



Contro l

Client Emails Sent and Orders Confirmed BCP Key Customer/Other Contacts


58/75



Contro l

Order Cancellations Averted


59/75



593:23 pm

Contro l

Retrieves Insurance Policy Go Box

Contacts Insurance Co BCP Critical Phone Numbers


60/75



604:32 pm

Contro l

Lists New Location on Website BCP Recovery Location


61/75



615:05 pm

Contro l

Order Deliveries Resume


62/75



626:28 pm

Crisis Averted!Due to Business Continuity Plan

Bakery Stays In Business!


63/75

Are You Prepared?

63


64/75

What Will You Do?

64


65/75

Develop Your OwnBusiness Continuity Plan

With Our Help!Receive

Free BCP Toolkit - $39 Value

65

Manage Your Business Risk


66/75

Whats in a BCP Recovery Location

Critical Business Functions

Vital Records

Data to Support Critical Business Functions

Accounting Records & Tax Returns

Corporate Documents Contracts

Insurance Policies


67/75

Whats in a BCP Key Contacts

Employees

Customer

Vendors/Suppliers Partners/Service Providers

Critical Phone Number/Lines 800

Local/Cell

Fax


68/75

Whats in a BCP Voice & Data Communications

Service

Features

Vital Inventory Lists Equipment/Vehicles

Office, Production, Communications

Computer Hardware & Software

Supplies


69/75

Whats in a BCP Emergency Procedures

Employee Call Tree

Disaster Checklist

Go Box Contents and Location

Risk Assessment Tool

Important Resources

Develop a Business Continuity


70/75

Plan with an SBDC Adviser

You will work 1-1 with an adviser to:

1. Complete risk assessments

2. Identify likely scenarios and Critical Business Functions

3. Develop a confidential Business Continuity Plan4. Implement the Plan within your business

The Result: Youll quickly create a comprehensive planthat prepares your business for risks it faces.

70


71/75

Why Develop a BCP?Protect Your Business

Avoid Any Impact to Your

CustomersStabilize Your Community

Protect Jobs

71

Dont Be a Statistic by Not


72/75

Managing Your Risk!Commit to Developing Plans

Assess Your Risk

Identify Likely Scenarios

Develop Business Continuity Plan

72

Be a Strategic & Manage


73/75

Your Risk!Call for an Appointment

and receive a

Free Business Continuity Toolkit

($39 value)

at your first meeting with an adviser

847.925.6520

73


74/75

Q & A


75/75

Strategies to Improve

Your BusinessSue Smedinghoff

IL Small Business Development Center

at Harper College

Business Advisor