With the economic downturn persisting and companies continuing to tighten their belts, it seems that now would be the worst time to put effort and money into exploring new markets and niches. Quite the contrary, says Joe Calloway, a partner with Engage Consulting Group in Nashville and author of Becoming a Category of One: How Extraordinary Companies Transcend Commodity and Defy Comparison (Wiley; $29.95).
“Now is the best time to go after new markets and expand your firm’s market share,†says Calloway. “Your competition has hunkered down into survival mode, and is just riding out the economic downturn. That leaves a lot of new customers out there who are open to doing business with new vendors.â€
Robert A. Bowser, president at African American hair care products marketer Firstline Manufacturing Corp. in Houston is one entrepreneur who isn’t sitting on the sidelines. This year, for example, Bowser’s 15-employee firm invested both time and money into developing the Dri Sweat line of active wear mesh caps. He says research and development started in 2008, and the products were introduced in early-2009, when many other manufacturers were cutting budgets and laying off employees.
“We saw a need in the African American community that hadn’t been addressed, so we went after it,†said Bowser, who has been in the ethnic hair care industry since 1979. The product’s target audience comprises active men and women who want to maintain their hairstyles. To ensure that the product would appeal to the “new†price-conscious consumer, Bowser set the product price at an affordable $4 and conducted market research and testing before introducing it to the marketplace.
Bowser says the new product line has exceeded sales expectations. “Just because the market is difficult,†he says, “doesn’t mean the opportunities aren’t available.†To companies looking to replicate Bowser’s success in today’s challenging market, Calloway offers these five tips:
Start laying the groundwork now. Plan today for tomorrow’s economic rebound, says Calloway. By getting in front of new customers now, he adds, you’ll be well positioned as a frontrunner during the economic recovery. Whether you’re introducing a novel product or going after a new market, he adds, now is the time to start planning, testing and acting on your ideas. “Some companies I’m working with right now are dedicating 75 percent of their time to cultivating new customers,†Calloway says.
Get your staff involved. Your staff may be inundated with negative job news and economic reports, but it’s up to you to keep them focused on company growth, despite the turmoil. “It’s too easy to get down in a recession on the business and personal financial fronts,†says Calloway. “Talk realistically to your employees about new opportunities. Everyone can help form the groundwork for a strong recovery.â€
Take baby steps. Getting into a new line of business or targeting a new market can be overwhelming if the task isn’t broken down into digestible chunks. If your marketing plan includes calling on new customers, for example, take the time to come up with a list of prospects and enter them into a database (for ease of adding notes and updating information at a later date). Review the list and figure out how many new clients you should call on daily in order to meet your monthly “new sales†goals. “Commit to calling on two new customers per day,†says Calloway, “to avoid getting overwhelmed and giving up.â€
Don’t fall in love with your ideas. You know that your new product and service ideas are
great, but is there a market out there that agrees with you? “The marketplace will ultimately tell you if it’s a good idea or not,†says Calloway, who advises entrepreneurs to test products before introducing them to the market. Use focus groups and informal surveys (Web-based options can be affordable and quick) with existing and potential clients to figure out if the idea is viable.Shake it up now, not later. “Whatever you are thinking about doing right now should be handled with a sense of urgency,†says Calloway, who sees too many companies taking a relaxed, “wait and see†approach in today’s economy. “There’s a natural tendency to wait around for things to get better, but now is the time to shake things up.â€
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