Businesses must tell the truth and hold their nerve

In these unprecedented times, confidence it seems, is everything. A lack of it has had unbelievable consequences for some former giants of the financial markets and trickling down, smaller businesses now have to factor in the potential fallout.

Consumers don’t want to order something from a supplier that might be bought out, sold off or floated off on a bankrupt debt raft. To gain trust, the onus is on businesses to be open and inform customers if there are changes in ownership that might impact on supply of goods.

This is partly a question of nerve and whether businesses are looking at the long term picture. A failure to do this got the banking sector into trouble and it could cause retailers problems too.

Looking around at all the pre Christmas discounts available, it makes you wonder what everyone is going to do in January? If customers continue to be offered discounts everywhere, they’ll eventually consider that the norm and we’ll have devalued our own market.

We need to get our eyes back off our stumbling feet and on the near horizon.

Survival of the customer focussed

It’s heartening to read this week that you don’t have to be a mega brand to survive the retail slump. A top ten retailers ‘survivability index’ commissioned by BDDO Stoy Hayward and Verdict published in The Times online this week features the expected big brands - Tesco, John Lewis, Sainsbury’s but also a few clever minnows – Howies, Boden and Fat Face.

Howies, which started life in 1996 selling T-Shirts in a mountain bike magazine, can be found at number 6 in the index, sandwiched between the mighty John Lewis and Waitrose. The reason Howies can compete in such esteemed company is that they have invested in developing a special relationship with their customers.

Howies are selling not just a good product but also a set of values their customers feel wedded to. Online, the shopping environment they’ve created has a community feel to it and this brand experience extends to their catalogue in which only half of the pages feature their products, the remainder being articles on subjects they think their customers will be interested in.

With consumers cutting down on non-essentials, businesses have to work hard to win ‘discretionary spend’ and it’s those online vendors, big or small, who can inspire their customers, giving them something they want rather than need, who’ll weather the storm well.

Don’t Panic

Online marketers feeling the pressure to maintain sales in these straightening times may be tempted to start sending out more emails than usual to their customer base. This is no bad thing, so long as the messages are right. However industry figures show that while volumes are increasing and delivery rates are constant, the open rate and click through rate are declining which suggests the messages lack impact.

So the question becomes not so much how many emails to send but how good to make the offer. In the restaurant market, the days when the offer of free bottle of wine would significantly increase bookings are over. Email offers need to be compelling and differentiated enough to make them worthwhile. We recently ran a campaign for Slug & Lettuce to win a holiday in New York that led to a big increase in bookings, whilst for Novus Leisure a campaign that offered Champagne at half-price let to them selling the majority of their annual quota of Dom Perignon during September alone.

When the email offer is good, the promotion significantly unique then customers will take action. If you make it easy enough to take the action then it will go viral. A lot of people remember the Thresher offer from last year, so long as you have control of the parameters and are prepared for the offer to go wild, the results can be spectacular.

Relevant websites: http://www.latenightlondon.co.uk, http://www.slugandlettuce.co.uk