Chris Moerdyk
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Chris Moerdyk
Marketing Tips

Tackling the recession logically

There are two really important things business needs to do during a recession and prosper in an increasingly competitive South Africa.
The first is literally having to adapt or die. To accept that running any sort of business is a lot tougher now than it was a decade or so ago. Working with far smaller margins of error and having to constantly recognise new trends, new threats and new opportunities that are a lot more obscure and difficult to identify. Reactions need to be quicker just to survive, let alone prosper.

The second big opportunity lies in the process of turning around a company that might have worked well enough in the old days but which might be bleeding from a battering received from not having reacted to the changing market and economic environments and particularly increased competition.

But, before even discussing any sort of solution to these challenges, it is critical that every company, no matter how big or small, regularly takes a look at whether it remains aligned to its customer requirements or whether this alignment needs some sort of tweaking. After all, the consumer is changing quite radically and this change is happening faster and faster. So, it stands to reason that a self audit on customer alignment is not only necessary but something that should happen as regularly as possible.

The best example around of customer realignment is Irish airline, Ryanair. What started off as just another airline has turned out to be a post-September 11 aviation success story. Why? Because some serious consumer research was conducted, even before September 11, showing that a huge number of airline passengers did not want first class, business class or even typical economy class service. They didn't want to be pampered with exotic meals and inflight massages and other forms of entertainment. They just wanted to get from A to B as cheaply and safely as possible. Ten years ago Ryanair would have failed miserably. But, by aligning themselves to the changed demands of the consumer they are now making a mountain of money. Well, they were until the global meltdown hit the airline industry in the jugular.

The good news is that the solutions to both adapting or dying and of turning a company around to meet new demands, are very similar. The bad news is that they require not only hard work but something else that is the most difficult thing on earth to achieve. Changing mindset.

Whether it's a question of trying to turn around an ailing enterprise or simply just making sure that everything is in place to build the business or grow a brand, there are two absolute fundamentals that need to be accepted, understood and firmly entrenched throughout the entire organisation.

The first is customer service.

The trouble of course, is that far too many local companies - retailers and service providers in particular - still regard this whole customer service issue as some sort of punishment. It's something they recognise as needing to happen in the same way as they accept that VAT has to be paid.

The first critical mindset change involves accepting that customer service is not a rule nor a regulation but quite simply a jolly good way of making more money.

The starting point for any company wanting to turn itself around and get out of the red and into the black is to change the corporate mindset of everyone in the organisation, not just those who deal with customers.

One of the biggest stumbling blocks in changing customer service mindset in any organisation is persuading employees that they do not have to be so doggedly loyal to the company.

Have you noticed how often it happens when you call a company to complain about something that whoever takes your call, whether it's the MD or a junior client service staff member, how often they defend themselves and the company?

How much quicker just to admit that there is a problem, commiserate with the customer and get on with finding a solution.

Trouble is, that often means putting one's pride in one's pocket and human nature being what it is, that is never an easy thing to do.

The second new challenge that any modern business needs to face, whether it is trying to turn itself around or simply prepare itself for the future, is to acknowledge the need to get basic homework done thoroughly. This goes far and beyond simply reading up on latest trends, monitoring competition and so forth. Those always have been fundamental to any business.

In today's business environment there is very little margin for error. Remember those American cars that were such flops in the 1950's and 1960's? Today cars like those have brought companies like GM down on their knees instead of just costing them a bit of profit.

Today's business is not just about great and innovative ideas but being able to turn ideas into products, services, techniques, systems and projects, quickly enough.

And the problem with having to do things quickly is the temptation to cut corners particularly when it comes to homework.

In the early 1970's the technical director of one of South Africa's biggest engineering companies had a brainwave involving replacing expensive imported jute with much cheaper and higher quality fibre from the lala palm tree which grows in profusion all up the east coast of South Africa way up to Kenya.

They developed at great cost a machine to extract the fibre, set up a processing plant at even greater cost and invited the minister of agriculture to open the new enterprise.

The minister did exactly that but casually asked at the opening ceremony just how the company intended getting round the fact that the lala palm was a protected plant.

The whole enterprise went belly-up just because someone had not done the most basic bit of homework.

Right now I am spending a lot of time playing devil's advocate for companies - just looking at their marketing strategy and business plans from an outside perspective to make sure they haven't missed anything in not being able to see the wood for the trees.

10 Jul 2009 14:01


About Chris Moerdyk

Apart from being a corporate marketing analyst, advisor and media commentator, Chris Moerdyk is a former chairman of Bizcommunity. He was head of strategic planning and public affairs for BMW South Africa and spent 16 years in the creative and client service departments of ad agencies, ending up as resident director of Lindsay Smithers-FCB in KwaZulu-Natal. Email Chris on moc.liamg@ckydreom and follow him on Twitter at @chrismoerdyk.