Slow economic recovery is bane to grow small business.
We must look for ideas beyond the frustratingly slow recovery indicators.
The economic tide naturally rises with consumer confidence and employment indicators after a downturn. With those traditional indicators still depressed after the worst recession in 70 years where should we focus?
Understanding the new customer buying attitudes post crisis is critical to begin understanding.
Traditional economic measures miss important buying behavior shifts.
Economic trend watchers have a built-in disadvantage how to grow small business looking through a rear view mirror.
Instead, zeroing in on customer attitudes gives us a windshield view of what is going to happen. Successful owners who align their selling patterns to their target customers values have an enormous competitive advantage to grow small business.
What are Customers Thinking and Valuing Much Differently?
To grow small business further how do we both understand and anticipate customer’s needs?
Knowing what my post crisis consumer values is one of the best places to start.
Consider this illustration on the best way to grow small business.
Imagine being in a time machine taken back 50 years ago as a young and ambitious entrepreneur. Armed with only the future annual consumer attitude shifts that will grow small business in your pocket.
How would you help entrepreneurs prosper with just that single resource?
So what’s the next best thing to a time machine to grow small business in an uncertain economy? Forecasting future consumer choices is made easier if you know important changing consumer values.
Successful owners understand how to match those changing values with their target customers buying preferences.
Where Did Consumers Get Their Pre-Crisis Insiders Tip?
Consider 2006. Without any “insider” tips or presidential decrees, consumers began to quietly and sharply reduce their spending and increase their savings rates. It is as if they sensed that double-digit annual housing prices increases and gas guzzling SUV’s were no longer sustainable – or desirable.
Why Post Crisis Consumer Attitudes Made Such a Significant Shift
For 60 years the average American consumer saved about 10% of their income. Successful smaller firms still managed to thrive for decades.
However, for the next 20 years riding a sea of easy credit that fueled record consumer spending the savings rate dropped considerably. Some years, American consumers even spent more than we earned!
During 2006 it appears that most Americans somehow knew the spending party was over. Loose credit standards were no longer seen as attractive. Savings rates started to rise to their historical levels. Savvy entrepreneurs adapted and survived.
The Financial Crisis in 2008 simply accelerated that remarkable trend. Sharp cutbacks in both spending and borrowing for both households and small firms were now the norm.
Consumer Values with the Biggest Declines
Consumer surveys* about that same time showed a marked decrease in the desire for material goods and services. An important benefit of these customer attitude surveys is a much better understanding for those who want to grow small business. Knowing the relationship between values, brand preferences and purchase decision-making by the end consumer is vital for owners to have.
Think of this impact on those firms who stay stuck in the past! Look at this dramatic shift toward lifestyle simplicity:
- Status driven values (snobbishness, exclusivity)
The New Consumer Values with Sharp Increases
How would customers help to grow more small firms connecting with these higher felt values?
- Kindness and empathy
- High quality
- Socially responsible
- Self reliance
Want to grow small business fast? Companies with these sets of brand values were three times more preferred than other companies offering similar products and services!*