BBC presenter and former Barclays advisor René Carayol, 41, exclusively reveals his top five tips for Hackney businesses looking to beat the recession.
1. Get your branding right
In the old world strategy informed the brand. Nowadays, your brand informs the strategy. So your very first step must be to decide what your brand stands for – is it premium? Is it upmarket? Is it a mass market product? Is it niche?
2. Know your competitors
Once you have determined who your real competitors are, you can then determine what sort of price bracket you should be aiming at. Remember, anyone who says they don’t have competitors has not done their homework.
3. Sex up your service
It is very rare for a premium product to be mass market. There are very few examples – BMW, Apple and perhaps even Madonna. These are what we call ‘sexy’ brands. They are usually expensive but anyone and everyone is prepared to save up to have one. The iPod is low tech, unreliable and expensive. It costs three times the price of most other MP3 players but it looks cool and is a ‘must have’ purchase. On top of that Apple brings out a new version every few months and people will upgrade just because it’s ‘sexy’. So you have to ask yourself, do you have a ‘sexy’ brand or a ‘sexy’ service?
4. Think before slashing prices
Most companies believe that markets will be far more price sensitive in a recession than they ever really are. So without any real market research they tend to start aggressive promotions and huge discounting campaigns, kicking off a price war where there are no winners. Competing on price is absolutely the worst strategy in the world for any product or service. There is always someone somewhere who is more needy than you are and will be prepared to slash prices in a way that you cannot sustain. Think instead about how you can add more customer value for the same price as before.
5. Avoid a price war
The only businesses that emerge from a price war during an economic downturn with any credibility (and without damaging their brand) are those who were discounting before the downturn, such as Wal-Mart, Primark, Ryanair, EasyJet and ASDA.
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