Three Ways to Leverage Positive Economic Signs NOW
We face a plethora of negative economic news every day. How can we build a successful business strategy when we are bombarded by nay-sayers? I looked under the covers and found encouraging signs of growth. Act on them before your competitors do.
Here are just a few, and some strategies for capitalizing on them.
1. The retail sector is reporting positive results. Home Depot and Macy's beat earnings expectations as of late February. Lowe's net profit rose 27 percent in fiscal 2009 fourth quarter earnings. Chief Executive Robert A. Niblock told The Wall Street Journal "the worst of the economic cycle is likely behind us." Nordstrom's Q4 income more than doubled. Target's Q4 profit jumped 54%.
2. Innovative online marketing is beginning to show more consistent ROI for small businesses. It's easy for a $140M company such as Seventh Generation to invest six figures in social media and cause marketing. It's an entirely another thing to see $1M businesses report 30% revenue increases from those efforts. Witness Joe Sorge, the co-owner of A.J. Bombers, a burger restaurant in Milwaukee, Wisconsin. In partnership with FourSquare, he has seen menu item sales grow by approximately 30% since launching a mobile marketing service. FourSquare, a startup based in New York, mixes social media and online gaming features to encourage people to explore the cities in which they live.
3. The Dow has risen 2.6% for February – the strongest showing since November 2009. This reflects a 6.5% gain.
4. Many companies have rescinded pay cuts they made during the recession. Hewlett-Packard, New York Times, FedEx, EMC Corporation, and Seagate Technology have restored salaries for some, but not all employees. According to the WorldatWork October survey of 875 human resources professionals, 29% of those surveyed planned to rescind the cuts in the following 12 months. Many companies may not have fully reinstated normal salary levels–but it's a confident step in the right direction.
5. Modest price increases are keeping inflation at bay. According to William Dudley, the president of the Federal Reserve Bank of New York, "There is just no inflation pressure in the U.S., so our focus has to be on growth and jobs." (source: Wall Street Journal, February 20, 2010). This provides impetus for the Federal Reserve to keep interest rates low, which may ease credit and encourage us to shop again. (I would love that! Chocolate, wine and shopping are my top 3 vices)
How can you capitalize on these trends?
* Find a low-cost way to experiment with inbound marketing strategies. Consider launching a campaign using FourSquare, LivingSocial, BuyWithMe, Groupon, or IMshopping. If your B2B company is unable to leverage these technologies, take some baby steps. Buy a copy of Inbound Marketing by Hubspot co-founders Brian Halligan and Dharmesh Shah.
* Establish ways to inspire your teams on a budget. Establish noncash rewards and recognition. Lost for ideas? Just visit Zappos' website for inspiration. They have mastered the art of creating fun and playful work environments. Buff up career advancement opportunities for your top performers. Abandon annual reviews and replace them with quarterly reviews. You will want to exhaust every reasonable strategy to retain your best people when the economy rebound accelerates.
* Think like a retailer. Study how Target has become a brand powerhouse by aligning with leading home goods and fashion designers. Search for articles on how they have restored customer confidence. Apply their lessons. It doesn't matter whether you are a software developer or a CPA. You will gain strategic momentum by studying innovations outside your industry.
Wealth rests in the hands of the brave and the innovative. Harness these trends now, and you'll flourish when the economic floodgates open wider.
Copyright 2010, Lisa Nirell. All rights reserved.