Jeweller - March 2023

BUSINESS
Strategy
Important lessons to remember when
facing an economic storm
Avoid frightening your customers with austerity – at all costs!
GRAHAM JONES return to explain how you can avoid falling behind the competition.
The price of fuel has soared in the UK
leading to a tank of petrol costing $200
for the first time. Meanwhile in the US,
the inflation figures came in higher than
predicted.
I recently popped into the supermarket
to do a quick bit of shopping and bought a
‘meal deal’ of a main course, a side dish, a
dessert, and a bottle of wine. That cost $24.
The most recent time I bought it, the price
was $14. That’s a 71 per cent increase in
a few weeks. I suspect you are noticing
similar rises in the things you buy.
Economists will debate whether the world
is in recession. Technically, we may not
be. But everyone is feeling the pinch. With
inflation expected shortly to hit 10 per cent
and with wage rises running at an average
increase of 4 per cent, everyone is worse
off now than they were a year ago.
This means we change our behaviour
as consumers. Indeed, psychologists
investigating the ‘Eisenhower Recession’ of
1958 first demonstrated that.
They showed that consumer optimism
weakens because of what businesses do.
In other words, as businesses become
less active due to economic pressures, it
signals to consumers that they too - should
reduce their spending.
Perfect storm
Businesses do less, people stop spending,
companies therefore don’t have enough
income and must do even less, leading to
further consumer inhibition. Consumers
are not spending as normal because
businesses have created a psychological
environment that suggests spending
is not a good idea.areas and free lunch
cafeterias.
However, research in Portugal showed that
customers want to spend. They are just
seeking what the researchers said was
‘economic level-headedness’.
That suggests your customers are looking
to you for leadership when financial times
are hard. The research shows that people
continue to buy through tough economic
times and therefore, they want your
business to carry on selling.
Cutting back in times of economic chaos,
therefore, is likely to make it tougher on
your business, not easier. As you cut back,
your customers will see that as a signal
that they too should do the same. That’s
the last thing you want!
Solutions
The puzzle is how do you signal to your
customers that all is well when it isn’t?
One answer is to look at your own
processes and save money with improved
productivity. I was recently with a client
running a workshop and it became evident
that this award-winning, business was
inefficient in some of its online processes.
We discussed several ways it could reduce
the time it took them to do various webbased
activities. The solutions will reduce
their costs significantly which means they
don’t have to cut back.
As you cut back,
your customers
will see that as a
signal that they
too should do
the same. That’s
the last thing
you want!
The chances are your business could
make similar improvements to internal
processes to dramatically improve productivity,
saving time and reducing costs.
Browser and email notifications drag you
away from work. Switching them off will
save you an hour each day. What size is
your computer screen? Do you have two
monitors? People with two large monitors
are around 42 per cent more productive
than people who use a single, standard
computer screen.
Technology as the answer
There is so much that businesses could
do to use technology to improve productivity
without spending any money. In turn,
this productivity gain will reduce costs
due to increased efficiency.
That means that you don’t have to make
cutbacks. And that means your customers
will not get a signal they should stop
spending with you.
According to an article in the Harvard
Business Review, companies that thrive
during difficult economic times are the
ones that invest in technology. Also, the
article shows that companies that plan
ahead for economic difficulties are the
ones that do well.
This suggests if you plan now to use technology
wisely, you can survive the problems
that lay ahead. Leave the economic
chaos to others.
With a level head and more productive
use of technology, you can continue to
50 | March 2023