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Posts Tagged ‘Recession’

Brand talk

February 4th, 2009 in Marketing by


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There’s a recession on, right? Here’s how it’s playing out in my life.

My friends will tell you I’m not the world’s most enthusiastic shopper, but my laptop and briefcase were stolen the other day, and after the initial anguish I got that little thrill of being able to acquire some new stuff.

First, the laptop. Did I think about changing brands? Not on your life. I’ve been lusting after the new MacBook Pro since I first saw them machining the aluminium “unibody” in the video on this page. Now I’m typing on one. I know the insurance company paid, but do I care about the price? Not on your life. I know 95% of people disagree with me, but we fanboys say people work on PCs, they create on Macs. And they’re beautiful (I’d love a MacBook Air). I have my little rationalisations, of course. Macs are good value ‘cos they come loaded with everything you need, but really I don’t know or care.

And guess what? The time when Apple nearly went broke was when the bean-counters took over and created the Macintosh LC. Great machines, Queensberry had several, but they were ordinary. And LC stood for “Low Cost”.

dannys-bagSecond, the laptop bag. I forget I’m in my 60s until I look in the mirror so I kind of wanted a bag like Danny’s to replace my heavy, corporate Samsonite briefcase. But you know, I’m not 26 any more…

So Heather and I traipsed around town with my beautiful laptop in a crappy canvas satchel looking for something better.

I could have paid a sixth or even a tenth of what I did. I could have bought something I quite liked for a third of the price I actually paid.

jost-bagDid I? Not on your life. I bought what I really wanted, a soft black leather Jost satchel similar to this.

These aren’t earth-shattering or even particularly extravagant transactions, just a couple of the gazillion little buying decisions being made round the globe every minute. Do you really think everyone is going to downgrade to cheap and nasty?

What is going to be harder is selling something for top dollar that is actually compromised.

As Johanne said, don’t do cheap, do valuable.

I’ll drop the other shoe tomorrow.

Cheers, Ian

PS Shame they didn’t get my iPhone. I would have loved a G2 like Stephen’s ;)
That’s the power of owning a lovemark.

 

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    January 16th, 2009 in Marketing by


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    We’re all sailing in rough waters, we’re all getting tossed about. The question is, who’s going to make it to port, you or your competitors? I absolutely agree with Nigel. When things are quiet it’s a great time to be working on your marketing. But are you too busy?!

    I hope we agree by now that by far the most important cost in your business is you,and therefore…

    The most valuable ASSET in your business is YOUR TIME.

    That fact should be at the forefront of your mind, and yet most people ignore it. Even if you’re quiet it’s too important to ignore. You’ll never earn $100 an hour by spending your time on $20 tasks.

    Consider this. For many photographers each wedding occupies a week of their time – often a long week. Think of the benefits if you could get it down to four days! Some photographers can do a wedding in three: think a day each for pre-shoot (to secure the booking), shoot and post-shoot.

    How’s that possible? Here are two scenarios (based on my spreadsheet – email me if you’d like a copy)…

    masc

    The only difference between them is that in the second, instead of doing it themselves, the studio is paying Queensberry to design the album, colour-correct and retouch the images and assemble the finished book. Obviously the cost will vary depending on how much retouching is requested.

    Assuming no associated cost reductions or extra bookings, my income could drop under the second option, so what’s the appeal?

    Well, the 500-plus hours I’ve saved. That’s a quarter of a year! And look at the impact on my earnings per hour.

    What could I do with that freed-up time?

    • I could work on my marketing to book more weddings.
    • Or I could develop a whole new income stream. Portraits maybe?
    • Or I could hone my golf/surfing/gardening skills, or go home early.

    Let’s be clear, you could end up polishing your images less under my second scenario. But you need to look around at your competitors. Right now, are you getting paid for all the work you do? Or doing it for nothing? Another approach might be your next marketing challenge: to find a way to get paid for what you now do for free.

    Cheers, Ian

    PS I suggested your income would drop under my second scenario, but maybe not if you’ve been hiring someone to do your “production work”, or you use your new free time to drum up some new business.

     

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    • Become a marketer instead

    January 14th, 2009 in Marketing by


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    Not every business owner can call themselves a professional photographer. But every business owner needs to be a marketer.  Creativity lends itself quite nicely to marketing so the chances are, if you’re reading this blog but don’t claim to be a marketer already, you’ll be quite good at it.

    I was reading an article by Paul Williams yesterday that made me realise this: The current economic climate is forcing every business owner (that’s you) to become a marketer. The recession is a “training ground for us to hone our businesses. The difference (or benefit?) with the recession is that EVERYBODY is in rough waters, not just you.”

    We have the opportunity to (or as a matter of survival need too) find new ways to:

    Become more relevant to customers

    Attract more attention in meaningful ways

    Differentiate from our competitors

      Marketing’s not a skill confined to professionals. It’s about developing strategies, ideas and content to connect with and persuade potential and current clients. You know your business and clients better than anyone, so you’re in a great position to start. If business is quiet, you’ve got a great opportunity to spend time working on your business.

      Ian’s posts about strategies to survive and thrive in the recession are well worth a read.  He talks about the importance of staying true to your dream. Don’t undermine the hard work you’ve done building your business for short term gain. Work on marketing instead.

      Cheers,  Nigel

      PS Ian will be back here soon. He lost his laptop and  the work he did over the holiday season in a burglary.

       

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      January 8th, 2009 in Marketing by


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      NZ Dairy Farm

      NZ Dairy Farm

      In my last post I suggested thinking twice before you cut back on your job costs (albums and printing) to survive the recession. Why? Because, among other reasons, your job costs are very unlikely to be more than 15-25% of your total expenses. Even slashing them in half won’t save the world. So what could you do?

      Farmers know more about good times and bad than most of us. New Zealand dairy farmers, for example, know they must expect droughts and floods, not just good weather, and commodity prices that fall as well as rise. When everything conspires to make for a great year they know they can’t bank on it happening again any time soon.

      So how do our farmers cope with bad years and diminished incomes? Amongst other things “they put their check books away” (cheque books outside North America). They had a great year in 2007-8, but this year prices are dropping and they face an uncertain world economy.

      So, no new tractor, no new car, no house renovations. Those can wait for the good times. But they do look after the farm.

      In your case putting your cheque book away might mean no new camera, no new computer, no new car, no house renovations. No new toys.

      Here’s an interesting thing. According to my spreadsheet I’m spending about as much on “asset replacement” (new toys) as I am on albums and printing (more if my bookings drop). Also interesting: if you don’t buy that new camera your clients won’t even notice.

      Heather and I were having drinks at the beach with two photographers last Tuesday night, and discussing this very issue. Rod’s retired but his mate said that, in his opinion, photographers need to upgrade their cameras every couple of years. “Look at Rod’s,” he said. “It’s aimed at the amateur market and it’s better than mine!”

      Then he looked down the beach, put his feet up on the rail and said, “No, I can do without for now. I’d rather be surfing.”

      Doing without mightn’t seem like fun, but take a lesson from farmers. Don’t overload the business that supports you and the life you love. It might take some people a while to pay down their debts but racking up new ones will make it worse. The media is getting close to saying it’s our patriotic duty to spend, spend, spend. No it’s not. We know most of us need to tighten our belts, and now’s the time.

      More to follow.

      Cheers, Ian

      PS While you’re at it, take a hard look at your overheads. In my spreadsheet I’m spending more on my overheads than than I am on asset replacement or job costs.

      PPS Don’t forget, my figures mean nothing in your case. If you’d like a copy so you can analyse your own business, please email me. It’ll take a couple of days for me to respond, sorry.

       

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      January 7th, 2009 in Marketing by


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      These articles are about strategies to combat the recession. I ended my last post by posing the question on everyone’s lips: what happens if my bookings drop?

      You’ll need to have read my previous post to make sense of what follows, but to recap, based on the numbers in the graphic below, if I get 30 wedding bookings and average $5000 per job my income is $71k. If I could get 40 bookings I’d make $114k, even if my average dropped to $4600.

      All good, but what happens if I can only get 20 bookings?

      masc-3

      The answer is my income drops to $28k! I could still achieve my $100k income goal with just 20 weddings but only by charging almost 75% more than what I personally believe other people of my standing are – almost $8600 per job.

      If those really were your figures, how would you feel?

      Well, if they were mine I’d start to sweat, my stomach would feel queasy and my first thought would be, I’ve gotta cut my costs!

      I’m going to suggest some positive strategies in future posts, but first I need to focus on what won’t work. (Heather reminds me to add, “in my opinion…”)

      I know that you know I’m biased, but hear me out…

      Most people’s knee-jerk reaction will be to cut their job costs – their album and printing costs.

      So, what if I cut my album and printing costs in half? Well that would be great if I could still get thirty jobs and still command the same price. I don’t need a recession for that to make sense. My income would obviously go up.

      But it doesn’t seem likely that giving my clients something less impressive is going to make it easier to book 30 jobs at the same price. After all, I’ve just abandoned perhaps the most important evidence that I’m a standout high-end studio…

      When I key in the variables this is what I find…

      If I hold my prices with the cheaper albums but still only book 20 jobs I’ll be slightly better off than if I’d spent more money on albums (obviously) but I’d still still have only $35k to feed the family and pay the bills.

      If I drop my prices by a quarter in order to book 30 jobs I’ll do slightly better – $43k. A lot less than my pre-recession $71k, but my best option so far.

      But if I drop my prices by a quarter and still book only 20 jobs I’ll be lucky to clear $10k!

        What’s to be learnt from this?

        When you start to play with your prices and with what you offer your customers, the outcomes are a lottery. Maybe you’ll be better off in the short term, maybe it’ll be disastrous. But two things are absolutely certain:

        You’ve just taken your business down-market to survive. (Do you think “down-market” will be less crowded in a recession?)

        You will still be down-market when the recession ends. (The down-market clients you’ve booked will be recommending you to their down-market friends.)

          A wise friend of mine says, if you want to stay in business you should avoid decisions that have the potential to kill you. You’re master of your own destiny, but in my opinion there are other ways to deal with the recession. With the negative stuff out of the way, we’ll deal with some of those next.

          Comments welcome!

          Cheers, Ian

          PS These numbers come from my spreadsheet. If you’d like a copy so you can analyse your own business, please email me. It’ll take a 2-3 days for me to respond, sorry.

           

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          December 20th, 2008 in Marketing by


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          I don’t need to write anything today :) Read these thoughtful and encouraging comments to my previous posts. Much appreciated, everyone, and more strength to your businesses in what we all agree are challenging times.

          We’d love to hear your own input. Anyone can comment.

          Cheers, Ian

          PS When you link to an individual post, be sure to use the two rows of navigation links above to read more.

           

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          • How to prosper while others decline

          December 19th, 2008 in Marketing by


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          marfa1Chances are you’ve never been to Marfa, but as it happens we have. It’s a tiny town set in the vastness of West Texas (population 2000+) and obviously thriving.

          Halfway between El Paso and the awesome Big Bend Park, Marfa is surrounded by towns in decline. It used to be a water stop on the railway, and a massive army base, but the trains went diesel and the army left town.

          So why isn’t the town dying, like most of its neighbours seem to be?

          marfa1bA minimalist artist called Donald Judd came to town in search of a spectacular landscape to display his massive artworks. An interesting guy … and other interesting people followed. Now it has excellent bookshops, art and craft galleries, a cool hotel, thriving real estate, a charismatic woman running our B&B and the best food we ate in the States. On this trip anyway.

          Why do people come? Because there’s no place like Marfa.

          Marfa has critical mass: a reputation that’s self-sustaining. It’s not easy being Marfa, and most towns fail. It’s not easy being a high-end studio either, and most of your competitors will fail.

          marfa2What prompted this post was a mention in a book by Pat O’Bryan. He talks about sitting in a coffee shop in this little town in West Texas, and looking out to see a film-star getting out of her new Jeep, the sun sparkling off her “rich-girl hair”. She could live in LA, she could live in New York, but “because Marfa is so very Marfa, she’s in Marfa. And so is her money.”

          Move to Marfa and your chances of business success improve, but even there (especially there) you need to look the best, and be the best.

          Take Cochineal and The Food Shark. Cochineal is run by an expatriate New Yorker who moved there after 9/11 and loves Texas. It was recommended by our landlady, but if we’d seen the sign we would have gone straight in. It was perfect. The menu changes daily and the only mistake we made was deciding to share dessert – blueberry pie baked in the best pastry we’ve ever tasted. Unfortunately we didn’t think to photograph it until it was gone!

          After this little rave from me, imagine if you went and they offered you microwave lasagne and defrosted Keyline Pie? If you’ve made your reputation, as I said yesterday, don’t throw it away.

          marfa4Come lunch next day, we realised how small a town Marfa is. We couldn’t find anywhere to eat except The Food Shark, which we drove past several times looking for something better.
          marfa5Eventually we stopped out of desperation and ate the tastiest of lunches. According to The Chowhound, everyone knew about it but us: “cowboys, truckers, ranchers, smartypants New Yorkers”. I’ll bet they do well, but it’s tough to do the same thing in the photography business (sell great cheap stuff) because your time isn’t scalable.

          Which I’ll talk about next.

          Cheers, Ian

          PS Sorry that was such a long post, but I wanted to make the point that money hasn’t disappeared, it’s just got picky. To attract it you need to look the best, and be the best. Or drop your prices.

           

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          • Is the sky falling?

          December 17th, 2008 in Marketing by


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          chickenlittleDoing their Chicken Little impression, the media say the sky is falling. Some of our clients are worried, but personally I wonder. Here’s why.

          First, Heather and I have been through it before (no, not the great depression! that was our parents and grandparents)…

          1. The 1984 New Zealand currency crisis (that might mean nothing to you, but our country almost went broke).

          2. The 1987 share market crash.

          3. The 1997 Asian financial crisis.

          4. The 2001 Tech meltdown.

          Sure, they probably weren’t as bad, but we survived them all. In fact in each of those years except 1984 our sales increased. And we all survived SARS and Y2K too, remember? Plus the odd political tragedy…

          Second, things may not be as bad as you might think. We know that some people are finding it tough, and we feel their pain, but our clients generally seem to be doing very well and our sales are strong. We still see the same gorgeous albums flowing through.

          Third, it pays to look at how bad it really is. I just read the IMF’s November World Economic Outlook update (I also checked out the OECD’s stats).

          The IMF expects a 0.7% decline in the US economy in 2009 and a 1.3% decline in the UK. They’re more pessimistic than they were in October, and it could get worse, but how bad would even a 3% decline be? Serious, absolutely – there will be plenty of personal tragedies – but not the end of the world.

          In Canada the IMF expects slight growth. Our own Reserve Bank expects the same, and so do the Aussies. The emerging and developing countries will have to make do with 5% growth.

           The statistics that look the gloomiest are the confidence statistics. I believe how we respond determines what happens to us. And look on the bright side. We’re not in the construction industry, or real estate, or the financial sector.

          Two more things to take heart from:

          1. The real economy isn’t collapsing so much as the financial markets. The Apple share price may be 50% off its twelve month high, but that doesn’t mean people don’t like iPods any more.

          2. In the real economy, money hasn’t disappeared, it’s just got cautious. It’s going to be harder to charm out of people’s pockets. As it happens I’ve just read a speech in which a Kiwi politician talks about the Great Depression of the 1930s. Unemployment was over 20 percent, we had minimal welfare in New Zealand and there were food riots in our streets. (Do we think it’s going to get that bad?) He said, “I’ve seen photographs of the members’ stand at the [race track] in 1932 – the same year as the riots.  It’s full of well-dressed people, and the car park is filled with large American cars and uniformed chauffeurs standing beside them.”

          I am not being flippant about a serious situation. Over the next few days we’ll be posting more about strategies to survive and thrive in the recession.

          Cheers, Ian

          PS Think of this as a time of opportunity. That shy money will find it’s way into new wallets. Some of your competitors will go to the wall. If you keep your nerve and respond constructively, it could be lonelier at the top in a year or two.

           

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