What is a recession anyway? The technical definition of a recession: “a period of economic contraction, sometimes limited in scope or duration.
The U.S. economy is now in the sixth year of the fourth longest economic recovery of the past century. And “experts" say the decline is coming if not already well under way.
In actual fact, an economic downturn really heats up when the buyers, the public, lose confidence in the market and believe that, yes, there is a downturn. When you hear news report after news report of bad news, higher foreclosures, a plummeting real estate market, and poor retail sales, the public loses confidence in the market and says it is time to stop spending.
This in fact is happening, but what does that mean to the average contractor?
Or, is there any way that the average contractor can take advantage of this downturn? Absolutely!
Remember, a major downturn is 10-15% fewer purchases in a given area. Let’s say in the area of Southern California there are 75 water features being installed in a given week or 300 paving stone jobs. A significant decline would be that there now would be 65 ponds being installed instead of 75, or 260 paving stone jobs instead of 300. (These are theoretical numbers but the theory still holds true.)
There are still 65 ponds being installed and 260 paving stone jobs being installed. As a contractor your strategy should be: how can I get a bigger portion of the market?
Most contractors, in seeing a recession or a slow market batten down the hatches and tighten their belts. Inevitably the first thing that they cut is promotion. That should be your chance to increase your marketing dollars and get in front of the people that you are not now in front of.
The next thing that a contractor should do is deliver a better product than he ever has in the past. Get your customer singing the praises of you and your work. Take advantage of that and get your referrals coming in.
If your competitor has the mindset that a recession is here and there is no work, then his work will decrease, he will expect it and complain about it.
Instead, you need to use your energy in promoting to your customer in any way that you can. You will then take business away from your competitor, during the time when his promotional efforts and expectations are less. You will then come out of the other side of the so-called recession stronger than before and you will have taken away marketshare from your competitor.
In summary, these are some of the things you can do to gain the upper hand during an economic downturn:
1.Know that your competitor will grumble and complain about the market, and decrease his expectations. Take advantage of this and get the customer he missed.
2.Know your competitor will cut back on his promotion and marketing.
3.Now is the time to increase your marketing outflow.
4.Deliver a better product than you have in the past.
5.Spend more time working for referrals from your happy customers.
6.Decide that you will take advantage of the down turning market and look for new marketing ideas or concepts.
If you do all this you will be the contractor that is saying “what recession?"
Remember that there are surveys done during all recessions, and there will be a large percentage of businesses that decreased their level of business, a good percentage that maintained the same level, and a small percentage where their business increased! Decide that you’ll be the one that increased during this downturn.
The companies that do that will be in the best position when there is a recovery.