How to survive a recession

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Diana Glover of Medford rides one of Scott Shaw’s EcoBikes, an electric bicycle he designed. Developing fuel-saving products is one way businesses can survive the current economic slowdown.Jim Craven

May 04, 2008

By Greg Stiles

Mail Tribune

When clients and potential customers call Best Tel's Chuck Whiteley these days, they're looking for more than a new phone system with bells and whistles.

They're looking for ways to survive.

"We are getting calls from people closing remote offices, who are battening down the hatches," says Whiteley, Best Tel's managing partner. "Others are asking how they can be more efficient. Invariably, they are so focused on running the business that they aren't working on the business and don't focus on the things that make you more efficient. It's become a big issue."

As a recession looms, credit tightens, sales dwindle and energy costs rise, businesses and consumers alike must do more than hunker down or tighten their belts. Management and marketing consultants say businesses must aggressively differentiate themselves and become more efficient.

"Make it easy for people to see anything and everything that makes you different," says Richard Emmons.

Emmons is the president of Richard Emmons Consulting in Grants Pass, and works with small- and medium-sized businesses.

"It's true in any market and especially in this market. You want to stand out and point out what makes you different, whether it's a better price or better guarantee. Competing on price can be difficult, because someone can underprice you. So your expertise and how you stand behind your product are important."

Connecting with existing customers is a far more efficient use of resources than generating new ones, Emmons says.

"They need to look at who purchased from them in the past instead of advertising to get a new prospect," Emmons says. "It costs six times as much to sell something to a new customer. They need to find ways to say 'thank-you' to customers and get them back in the door. If it's been six months since someone last purchased from you, you need to reactivate them."

Consumers, too, can find ways to steel themselves against dwindling buying power.

Emmons suggests consumers adopt a business-like approach to handling their finances. Does the dollar you spend return more than the dollar spent?

"Companies look at strategic and non-strategic spending and individuals can, too," he says. "Strategic spending goes into product development and customer care. Nonstrategic spending involves overhead, obtains services and goods like office supplies, and taxes."

Individuals can cut things that aren't essential or look for alternative suppliers.

"If you've been with one cell telephone company for a long time, you might be able to get the same coverage with a different provider and have the same benefits for less money," Emmons says. "Or talk with your provider and see if they have a better plan."

Another form of strategic spending during tough times is investing in education.

"People want to make themselves stand out from competitors, whatever their field, profession or trade," he says. "By investing in education, books or studying on the Web, they become more essential to employers or customers."

Three years ago, builders didn't necessarily need to stick out from the crowd. About the time they poured a foundation, buyers would swoop in and snap up the property; the bigger worry was booking subcontractors.

Today, things have changed. Speculation houses are a rarity and relatively smaller houses are the rule now instead of McMansions.

"We have to be very careful and we're very familiar with our competition and what other builders are doing," says Mark Wickman of Vision Homes.

"We go out every 60 days and look and every couple weeks we do a marketing analysis. My Realtor monitors building permits in surrounding states, and California is still really hurting. Until things start to move, we're not getting a lot of stuff out in front of us."

Some business owners can take advantage of hard economic times. Bear Creek Lock, Safe & Alarm, for example, has seen a drop-off in requests for security systems but an increase in orders for changing locks, thanks to the hundreds of foreclosures this year.

"We work with a lot of commercial real estate companies and that's a good part of our business," says Don Aubel, supervisor. "The worse things are, the better we do changing locks. But with people spending $100 a week on gas when they normally pay $100 a month, they can't afford alarm systems."

Entrepreneur Scott Shaw of Medford is capitalizing on those higher energy costs by offering the EcoBike, a new generation electric bicycle that first drew interest in Europe and is now catching attention in the United States.

"From what I could see three or four years ago, I was hoping for this type of environment," says Shaw. "I've hit the perfect storm — a recession, gas prices and the wave of interest in environmental, green and sustainable living. People are looking for an alternative transportation solution."

Whether a company grows or is hanging on, Whiteley says finding the right people to fill the right positions is a must for running an efficient operation.

"Recruiting and hiring quality people to treat your customers the way you would is important," Whiteley says. "It's a big struggle everywhere I go."

He says companies are sometimes reluctant to train employees to the point where competitors may snatch them away.

"What happens if you don't train them well and they stay?" Whiteley asks. "You're better off training them."

Reach reporter Greg Stiles at 776-4463 or e-mail business@mailtribune.com.

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