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THIS WEEK
The Showbag: Recession Ratio – A Hidden Economic Indicator?
ALSO IN THIS EDITION
The Showbag: Recession Ratio – A Hidden Economic Indicator?
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Yesterday, my family and I spent the day at the Ekka. If you are not in Brisbane, the Ekka is the annual Agricultural Show or State Fair – the largest for the state.
It is where farmers bring down their prized cattle and sheep, exhibit the best of their crops; and where city folk embrace their country heritage amongst the garish lights on the rides and tacky knick-knacks in the tents.
Usually the most prized part of any Ekka visit for kids, is the Showbag Pavilion. Normally you can't move through this pavilion, as people buy up armfuls of the sample bags. But this year something was different, totally aside from the new location for the pavilion.
The Recession has Killed Showbag Sales
This year people weren't buying armfuls of bags. In fact, many people were walking through the pavilion and not buying any bags at all. Talk with the people staffing the stalls, and they all said, "People are not buying this year – it's the recession". They sounded like any other business owner – the recession had apparently cut heavily into the sales of showbags.
But ... People Left with Money In Their Pocket
It would be easy to take the store holders comments at face value, and assume that in tight times, people were holding onto their pennies. But when we dug a little deeper, and we chatted to the parents doing laps through the pavilion, they were all saying the same thing. They wanted to buy showbags – they had money budgeted for them – but there was nothing of good enough value to buy. Many left the pavilion with their budgeted money still in their pocket.
Now this is a scary thought for many businesses. You have people with money to buy, who want to buy from you ... walking away from your product.
During a Recession People Need to See Greater Value for Money
We have already talked in a previous issue about during a recession, people needing a bigger why. This is a corollary rule – during a recession people need to see greater value for money. They still have money to spend; they just want to make sure they are getting the best bang for their buck.
So the business lesson for this is simple. If your sales are sluggish, you are not demonstrating enough potential value to customers.
If you want to boost your sales, boost your perceived value. First, you need to review your marketing copy and graphic design to ensure you are articulating the true value that you add to clients.
Then think about add-on products or services with a low cost to you, but high perceived value. Include discount coupons, or share coupons and offers with other related businesses to yours in your local area.
And finally, ask your clients:
a) what value they believe you added to their business and
b) what other goods or services they would have liked to see you add.
Often your clients will give you your best clues in terms of things you did that they felt added value to their business – things you didn't realise were important. They will also give you great ideas for bonuses and add-on services – if you ask them.
So this year if you go to the Ekka, take a look through the Showbag Pavilion to see what opportunities have been missed. They are everywhere from the missing signs on the "true cost" of what's in the showbags, to reduced bundled bags for discounted rates, to less choice and variety.
And then, realise how much money is walking out the door because the businesses didn't demonstrate sufficient value for money. It's a sobering thought.
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Another economic indicator - this time the stock market. In this post I talk about the role a leader needs to take during volatile stock times.
exuberantly yours
Ingrid
Heart Harmony
Legal stuff: This newsletter is intended as only a general guideline for Australian businesses. You should seek specific advice for your situation rather than relying only on this newsletter
Earnings disclaimer. Some of the content may include advertorial information, which means I may receive financial compensation for the products I recommend. But - unless I know and trust the product, I will not recommend it.
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