subject: How UK Businesses Can Survive the Credit Crunch [print this page] How UK Businesses Can Survive the Credit Crunch
HowUK Businesses CanSurvive the Credit Crunch
The best way to survive the credit crunch is to expand your customer base. Virtually all businesses have seen a drop in average client spend and, while it is possible to wring some extracash out of existing clients, it is more prudent to expand your currentcustomer base.
The first step in doing this is understanding as much possible aboutyour current customer base.You need to know as much asyou can about this group. Youcan get a good understanding of them byanswering the below questions:
What is their predominant sex? (few businesses attract 50/50)
Who makes the buying decision (i.e. if you attract couples who makes the decision to buy from you)?
What is their age range?
What is their income range?
What do they do?
Where do they live/ work? (depending on what your offering when, i.e. after-work bars in the centre do well during the week, not so at the weekend)
What are their interests?
Where do they look for information? Is it on the internet? If so, which sites? Is it from friends? Is if from newspapers etc?
Where is it easiest to target them? At home? At work?
During credit crunch times it can be necessary to expand your customer base. This often isn't about finding a whole new group, but extending your current boundaries. Consider these three supermarkets:
Aldi
Tesco
M&S Food Hall
Tesco has always been middle of the road, but has managed to infringe on the customer base of the other two by carrying 3 ranges:
Tesco Value
Tesco's
Tesco's Finest
This is all about them expanding their product lines so they can service a wider customer group without alienating any of their existing customers.
If we go back to the profile we completed for your main customer group, how can we expand this? Usually just by tweaking some of the parameters we can cast a wider net and get a bigger catch. The key move it so introduce a premier range on top of your normal one. Typically about 20% of client will chose the premier range. You can also choose to offer a "Value Range" though this is less recommened. It is far better to have customers who want to trade up rather than down.
However, "Value Ranges" can work quite well, for example a number of pubs and restaurants have taken a lead from Tesco and added a value range to their usual menu. This means rather than having customers earning over 25 000 a year you can appeal to those starting professionals on 18 000.
Personally, I think the words "value" and "budget" imply cheap and in more upmarket establishments this can reflect negatively on the restaurant.
It is easy to portion off part of the menu that contains the cheaper choices, for example pastas, pizza etc. without drawing unnecessary attention to the fact that they are for the more cost-conscious customer.
The best way to appeal to this group is to package deals together. This way it avoids looking cheap and by offering a number of low cost, high value items you can make a good profit, while giving them the feeling that they've had a good deal.
There are other things you can alter, for example attracting people with different interests or from different professions/ companies. This may take a strategy to win them over to start with, but if they're close to your regular customer base then the chances are you'll keep them.
The expansion of your target group is key to business survival at the moment. Having spoken to a number of businesses, it seems that their number of customers has stayed fairly constant, but their average spend has fallen. In other words, they need more customers to make up the shortfall on spending. One way to achieve this is to enlarge your market group.
