Saturday, January 3, 2009

Business - Action Points in a Down Economy: Stimulate Demand

In a down economy, horticultural businesses must spend more effort in stimulating demand for products and services. The following are some points to consider on this topic.
  • Focus on your marketing efforts and increase marketing expenditures. To get consumers to buy plants or use your landscape or lawn care services, it is critical to spend more on reaching your customers.
  • Cull out those customers that are not profitable. The bottom 10 % of your customers usually do not produce much returns. Examples would be those customers only seeking discount or bargain prices, smaller properties that cost more to provide services to than you get in return, customers that do not pay on time, or customers that require excessive attention that is not balanced by sales.
  • Focus on the top 10% of your customers. These customers are the ones that make your business profitable. Increase service to them, pay more attention to their needs, and contact them on a regular basis.
  • Look at what competitors are going out of business and aim to attract their best customers.
  • Analyze your products or services and eliminate those that are not profitable or that have low profit margins. For example, if a certain plant category does not make you money, stop growing it, increase your price to make it profitable, or reduce it to the minimum necessary to compliment other offerings.

Information in part from a talk by Dr. Charlie Hall, Texas A&M University.

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