Meacock says companies need to start preparing for a market that will be very different from the one prior to the downturn.
A number of different variables are now coming into play. One is the emerging carbon trading scheme that will put a price on emissions, creating extra credits and liabilities on balance sheets and new potential revenue streams. Another is the growth of social media. Then there is the potential impact of the national broadband network.
And finally, a different kind of consumer has emerged out of the downturn, one who spends less and not as likely to engage in excess. Experts say that the new thrift chic will be around for years after the recovery.
Meacock says: “If you take the view that consumers have changed and will stay that way for a while, then customer segmentation is even more important to understanding customer needs and where the higher value niches are.”
He says most businesses can do this – they have enormous amounts of data from every customer transaction. The challenge is turning that into information that they can use.
“Most organisations tend to be data rich and information poor,” he says.
“Organisations get stuck on analysing a minimal amount of data that gives them the truism they believe in when they have a lot of other data that they are not taking into the analysis.
To extract the information, companies have several options depending on how much they want to spend. Alternatives range from putting the data on Excel spreadsheets to employing sophisticated data mining techniques.
Whatever they do, getting close to the customer requires innovation and R&D. “It’s a time when people should be innovating about what is going to attract customers and get close to them,” Meacock says. “If it’s at all possible, it’s not a time to be cutting marketing. It’s a time to be looking at the various channels of connecting to customers.”
Indeed, it might even be necessary to put on people or retrain them for the new market.
Innovation expert Terry Cutler says innovation is not just about breakthrough products and technology. It’s often about developing better processes and new business models. That is something any business can do.
“You might think about how you use Web 2.0 platforms to engage differently with your customer base or your supply chain,” Cutler says. “You might reinvent the customer service you provide.”
Quentin Jones, managing director of culture consultancy, Human Synergistics, says this is the time when companies need to look at boosting their productivity. But they should take care not to alienate staff with mass redundancies and lack of follow-up.
He says the best companies use this period to retrain and develop their people for the recovery. “In the end, you have your people saying: ‘Gee, you didn’t make us redundant, you invested in us’”.
“That is putting emotional capital in the bank. At the moment a lot of companies have withdrawn big time from the emotional bank account. Culturally, they’re in the red.”
The key to tackling the recovery is having staff that is fully engaged. And that requires investment in the account right now. As the experts say, the steps businesses take now will have more long-term impact than anything done when markets were in full swing.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
