It’s fast approaching (can you believe it) that time of year again when we dust off the holly and mistletoe and are supposed to be thinking warm thoughts about log fires and having goodwill to all men, in short, it’s the season to be jolly. But should the same rules apply in business at this time of year or indeed at any time?
- I should add that I’m referencing mainly how we chose to react to competitors and the like, maybe I’d throw in a few price negotiations with suppliers too. Should these relationships be more cordial in the Xmas season? It goes without saying that all times relationships with colleagues, friends etc should always be seasonal, jolly and friendly otherwise surely it’s not worth getting out of bed to work if you have a downer on everyone?
What prompted the thought is that I recalled how some years ago when I worked in the Banking sector, organisations like Visa and Mastercard would periodically adjust the level of surcharge they applied across transactions and impacting payment processors and Banks globally, so let’s say in one year they announced a change from 1.7% to 1.8%, and it started to be enforced in say three months’ time. This blanket seasonal change gave the whole industry a reason to review pricing which they couldn’t ignore or they’d lose money and go out of business so they had to communicate with customers as pricing inevitably had to change. It was a global pandemic of sorts dictated by faceless financiers somewhere and it would have to alter customers businesses wherever they placed their business, it simply couldn’t be avoided. So all the banks had to contact customers at roughly the same time with the same or similar story, or did they?
Anyone who knows me well will understand that to me this is like a red rag to a bull – when I was in charge of these communications, and when a price increase was being dictated, I decided we’d take off the kid gloves and aggressively target our competitors, it certainly wasn’t a time for Goodwill to All Men & Women. Our goal at this time of major change was to win business from our main competitors. A bit crazy really, we were forced to tell existing customers prices were on the increase (so we were bound to lose some existing customers) and potential new customers would be unhappy as quotes were becoming higher. The logical decision which had been followed for decades was to REDUCE Marketing expenditure and keep as quiet as possible, which all our competitors did every year and so did we, and then we all started marketing again in a quarters time when the dust had settled.
To me this seemed crazy as we’d surely all be ramping up our marketing together, making it less effective? Instead, I amazingly got sign-off to instigate a program where at the very point our prices were the least competitive (as we’d just put them up before our competitors) we embarked on a huge customer recruitment campaign targeted at our competitors best customers and hitting them with our least powerful offer in years. I was banking (pun intended) on the fact that most companies wouldn’t realise the market price of the service and wouldn’t know for sure whether the new price was good or not but they’d probably assume if we put a huge marketing budget behind it and were willing to shout so loudly about it from the rooftops it must be good?
And amazingly that’s what happened. By not following the goodwill to all men approach at a time of international turmoil (with a small T compared to current troubles of course) we had our most successful new client recruitment campaign ever. If memory serves we correct we added about 10% to our bottom line in a single month.
Our competitors were inundated with customer complaints about their own pricing (which was cheaper than ours but customers wouldn’t believe them) and switch requests by the bucket load right at the point when they had no choice but to very soon put up their own prices too. So they had nowhere to go as a defence, even though they were being impacted by the exact same forces as we were. We’d struck first with a seemingly illogical strategy but with devastating impact.
Needless to say, it was a shocking strategy but turned out to be a hugely successful recruitment campaign, not least because in the following months when our competitors had increased their own pricing to allow for the new payment interchange rates, we were still picking up a long tail of switchers leaving them and keeping them busy firefighting so they couldn’t chase our clients.
I think this is a further example of how Marketing when times are tough and other firms are asleep at the wheel is a bold strategy but often a winning one.
The Season of Goodwill is also a great time to apply or start planning new strategies.
Around 60% of individuals are alleged to create New Year’s Resolutions (they’d probably be better advised to come up with firm written Plans, Goals or Milestones as according to oft-quoted research by both Yale & Harvard, these tend to be nearly always achieved whereas only around 10% of Resolutions are). It’s not much of a surprise then that this is also the time of year when many business people start to think about making life changes and hence it’s the peak recruitment time for Network Marketing and Party Plan type companies.
In bigger businesses, it’s also when many investment decisions start to take shape and when people think of starting whole new businesses too, either within their companies or for themselves, as you can see below. The peak search period being around the second week in January.
So, what’s the moral of the story? Yes, it’s the Season of Goodwill but it’s also a great time for some bold steps that may not be in your long term best interests but not so seasonal for your competitors!