Business leaders get nervous when they see a recession coming. Countless companies have gone out of business because of an economic downturn, and everyone worries about being next on the chopping block.
There’s no reason to panic, however. Your building materials sales don’t have to rely on the economy, not unless you let it happen.
Recessions have a strong negative impact on some manufacturers and suppliers, but that’s only because the building materials industry is led by risk-averse people. Many of the leaders at the top are more comfortable with spreadsheets than with customers.
That makes them more vulnerable than they should be. They’re relying on the economy for their success, but the economy is far too volatile. Upswings in the market don’t last forever. Every boom eventually turns into a bust.
If you’re the spreadsheet type, I don’t blame you for being concerned. Your sales will dip whenever the market does.
To avoid going under during a downturn, you need a different approach. You need to recession-proof your business. And that means growing your market share.
The Best Way to Make the Economy Irrelevant to Your Success
Let’s say you sell interior doors to homebuilders. Like everyone else, your customers will be affected by the recession. They will sell fewer homes, which means they’ll need fewer doors.
The normal response to this is simple and straightforward. You know a decreased demand for doors means your business will decline. So, you look for ways to cut costs to make up for the lost revenue.
That’s one approach, but it’s not the best.
Cutting back will help you get through some tough times, sure. But if you make it to the other side of the recession, you’ll come out in rough shape. You’re likely to have fewer customers and your cuts may have tested the loyalty of those who stayed.
Here’s a better way to do it.
Sales will probably decline with your current customers. But your market share isn’t 100%, which means there are a number of builders you’re not selling to. Instead of cutting costs, why not aggressively pursue these new opportunities?
One effective way to do that is by providing superior customer service.
The level of customer support and service has been in steady decline since the last recession. It’s likely to get even worse now, since your competitors will cut back on it even more to compensate for a slowdown in sales.
That will make it more difficult for builders to do business with them. It will also make your superior customer service an even stronger competitive advantage.
Instead of scaling back on customer service, you can increase it and bring in brand new customers. Every customer who is fed up with the level of support they get from your competitors will be eager to do business with you.
Your reputation as the company that treats its customers right will grow and your sales will grow right alongside it.
Growing your market share will get you through the recession. And unlike cutting costs, it will help you come out of it stronger and more successful.
A Masterclass in Customer Service
Want to take it to the next level? Talk to your customers directly.
Sit down with current and prospective customers and ask them about the biggest issues they face when dealing with your type of product.
Ask them which companies are doing the best job of meeting their needs. It doesn’t have to be another door company – you can learn from anyone who knows how to go above and beyond for their customers.
Finally, hand them the magic wand and ask them the big one: “if you could change anything about us, what would it be?” This video shows you how to use a magic wand with your customers.
Those interviews are a masterclass in customer service. You’re getting direct answers, straight from the experts – the customers themselves.
Once you find out what your customers need, want and appreciate the most, use that information to convert new prospects. Become the company they wish they could buy from and you won’t have any problem growing your sales, even when the economy is going through turbulence.
Control Your Destiny
Recessions might be out of your control, but your success doesn’t have to be. Jack Welch from GE said it best: “control your own destiny or someone else will.”
When you cut costs and let your sales decline, you’re allowing the economy to take control of your business. It’s like taking your hands off the steering wheel and hoping you won’t crash.
Instead, you should grip the steering wheel tightly. When others are cutting back, use it as an opportunity to grow your market share. Then, look for new markets you can move into and new methods you can use to sell your product.
That’s how you take control and make your company stronger, even when times are tough.
Wizard Strategy specializes in helping building materials companies grow their businesses. If you’d like help developing a message that’s worth repeating or coming up with a sales and marketing strategy, we’d be happy to chat. Schedule a free consultation today.