In several unscientific surveys taken at the Printwear Shows this summer, the general assessment of business in the decorated-apparel industry is “not bad…could be better, but definitely not as bad as some industries.” With soaring oil prices, a struggling economy brought on by the banking/mortgage debacle, and rising unemployment, some experts still avoid using the dreaded R-word while reviewing the year 2008.
Although there is no commonly accepted or recognized definition for the contraction phase of the economic cycle known as “recession,” InvestorWords.com defines it as “a period of economic decline; specifically, a decline in the gross domestic product (GDP) for two or more consecutive quarters.” Wikipedia chips in with “A recession may involve simultaneous declines in . . . overall economic activity such as employment, investment, and corporate profits. Stock market drops have preceded the beginning of recessions. However, about half of the drops of 10 percent or more since 1946 have not resulted in recessions.” So, are we in a recession or not?
Is this month’s column one of the dozens of articles that have appeared in various American business periodicals about how to survive in economic hard times? No, not really. Instead, it is a slightly-different perspective on what this unique time in American history means for the decorated-apparel industry. Care to meander with me? Let’s take a walk.
Why has this year been okay for us?
Just because your business is having a relatively good year—compared to the housing, construction or automotive industries—don’t be lured into thinking our industrial “sandbox” is recession-proof. Consider these particulars:
The decorated-apparel industry, along with sign makers and custom gift retailers, enjoy a windfall of revenues in a presidential election year. More shirts are printed and embroidered. More signs are produced. There’s more reason to engrave or imprint pens, buttons and badges, trinkets and do-dads than in a non-election year. And, the more hotly contested the election, the more stuff that’s made and sold.
When oil prices are up, the decorated-apparel industry has a readily-acceptable reason to raise prices since some of the materials used to decorate a garment involve petroleum-based products and, certainly, shipping costs to get the finished goods to the customers have gone up with the increase passed along to the consumer.
Recently, one of my clients made the observation that some orders previously sent overseas in favor of lower manufacturing costs—but tolerating marginal quality—have resurfaced on the work-order schedules of American print shops because any savings in labor and materials have been offset by much higher shipping expense. Would it shock anyone if this migration of work back into the United States continued?
By many accounts, the year started off well. Sales nonchalantly surpassed last year’s numbers for the first quarter. But then, spring sprung a lag in equipment sales and decorated-apparel supply vendors became jittery when nearly all of any profitability came from supply and materiel sales. Throughout the summer, the general buzz on the street among apparel decorators has been, “Do your homework about what machines are out there and search out can’t-pass-up bargains.”
In a recent Richardson survey, 68 percent of 500 sales professionals, when asked if closing deals is tougher now than in the past, said yes; 28 percent of respondents attribute this to more discrimination in buyer’s behavior and cuts in customer budget availability; 30 percent described their sales prospect pipelines as “not healthy”—a number that only totaled 12 percent in a similar 2006 survey. When individual businesses—or entire industries, for that matter—are lulled into thinking they don’t need to continually sharpen their sales acumen and efforts, a downturn in the economy can have sneakily-devastating effects.
What can I do about the economy?
Throwing up your hands and resolving one’s self to “riding this thing out” is not a viable reaction to facing the challenge of this economy. There are many other more proactive alternatives from which to select. That said, the choice from the following options may take some intestinal fortitude and tap into your already-limited resources.
Step 1: Re-invest in training and developing your employee’s skills now. Every member of your team—especially anyone who interacts with customers—should have a 60-day development plan including a set of SMART goals. SMART is the acronym coined for the format of individual objectives: Specific, Measurable, Actionable, and Realistic with a Time-bound deadline.
A wise client of mine recently told me, “I need to conduct training with my people now before this economy decides which direction it will take. If things get better and we get busy, I won’t have the time to pull them away from their jobs to train them. If business turns south, I may not have the money available—or the people around—to train.”
Training shouldn’t have to be expensive or time-consuming. A series of bite-size (30-minutes or so) morsels of information and skill practice over a period of weeks just to remind employees about how doing the basics perfectly can make all the difference in the eyes of the customer is more effective than sending them off to a three-day class on customer care. Tap into the local resources at your disposal—namely, the Small Business Development Center at a college campus close by or your Chamber of Commerce SCORE program.
Bringing in an industry-savvy training consultant—there happens to be one writing this column—to facilitate a skill-development program tailored specifically to meet your company’s needs and accomplish key training objectives can be very cost effective when spread out over as few as six employees. Topics such as effective listening and probing techniques, telephone etiquette, and time-and-opportunity-management skills have been popular lately. Be sure to take advantage of any free, unlimited post-training support and follow-up, if the trainer offers it.
Step 2: Re-double your efforts to build customer relationships, establish trust and make the buying experience convenient and pleasurable. Customers have changed in these uncertain times. They have lower tolerance for risk and they have an intense focus on value. Actually, the value expectation bar has been raised to a level higher than ever before.
If you’ve read this column in the past, no doubt you’ve been reminded of the mantra “People buy from people they like, trust and with whom it is convenient to do business.” It couldn’t be more true. Spend extra time with customers. Talk up your preparations for and efforts taken on their behalf because buyers like to know they are on your mind and you are watching out for their well-being.
Research shows that as much as 70 percent of today’s sales are coming from existing or past customers. So take special care of the clients you have presently, but don’t forget to fill your prospective customer pipeline with new opportunities.
Ask for a commitment
It may often seem as though you and your business are at the mercy of the powers-that-be (or is that powers-to-be?) in Washington or on Wall Street. Wasting time worrying about things over which you have little control is foolish and short-sighted when you think of all the things you can control. But the time to rally the troops and plan a strategy to create your own luck and success for the remainder of this year and carry that momentum into next is now.
Finally, remember that buyers have needs in all economies. Remove the perceived risk they are about to take and/or the remorse they fear they may experience and help create a desire on your customer’s part to act when they are in your presence. At the end of every interaction with a customer, always ask for some commitment—even if it’s only a set date and time when you will see or speak to each other again. I’ve heard it said—and I firmly believe it—that a sales person is only as good as her next set appointment. Good luck!