There were a lot of people talking about the possibility of a Recession last month. Yet, recessions don’t always have to hurt.
“Recession” and “Increasing Revenue” can actually profitably coexist.
I am reminded of a furniture company that approached me in early 2008 to increase their revenue. It was the start of the Great Recession. While conventional wisdom may suggest that recessions are not the time to embark on revenue increasing initiatives, in actuality, nothing could be further from the truth.
Recessions are major macroeconomic events that, like earthquakes, severely disrupt the landscape of virtually every industry. This disruption produces crevices of previously unavailable opportunity – you just have to know where to look!
With my new furniture client, I chose to look at their distribution and retail customers. The company was a middle market furniture manufacturer whose $799-$999 sofas were sold as private label products at stores like Macy’s. Interestingly, every buyer of their goods described this company as a “fashion-forward brand.”
I thought this as quite odd, since most furniture is usually sold as private label, with no brand name attached. My client, however, had a furniture brand that could be identified without a label – based solely upon its unique sense of style.
That was a unique value proposition which we could leverage to our advantage.
At the same time, it occurred to me that more upscale retailers, like Restoration Hardware and Pottery Barn, whose lowest priced sofas were $1299, might find their recession conscious customers to be more price sensitive. Perhaps these higher priced next-tier retailers, who normally would never consider my client’s $999 sofas, would now appreciate a lower priced “fashion-forward” sofa option that fit well with their upscale fashion-forward furniture products.
And, they did.
My client’s revenues nearly doubled between 2008 and 2011. Why? Because they took advantage of multiple opportunities created by the recession.
Now is not the time to solely hunker down and protect your company from the anticipated effects of the recession. It is also truly the time to look up and around to see what has changed or can be expected to change.
What opportunities could the recession be creating in your industry? Now may be a good time to find out so you can increase revenues by taking advantage of those opportunities!