What to do when the upturn is bad for business

Oedo

Hi folks,
We provide services (web/marketing) and have noticed in the past few months that fewer small businesses are getting in touch.

Any tradesmen we talk to are saying they're flat out at the moment.

So even though the upturn in the economy is a boost for a lot of businesses, it's not a time when some businesses (mainly small) will be taking a step back and looking at how to improve things through promoting themselves online or otherwise.

In saying that, I'm sure it'll be balanced off by other types of businesses getting in touch, new businesses taking off that will need websites, etc.

For the sake of discussion we have recently increased our prices and haven't noticed a major impact as regards our conversions.

Just wanted to open the discussion here for this type of situation where aspects of businesses can be impacted negatively by an improvement in the economy.

smash

The only way that the upturn in the economy would ever affect your web business negatively is if you're a company who offer cheap services. If you are perceived as being cheap, then people with money wont engage with you as they'd rather deal with someone more professional.

If you're increasing your prices then you better make sure you're increasing your level of service too because if you don't, you wont compete with the big boys and your reputation will take a major hit.

Oedo

smash wrote: »

The only way that the upturn in the economy would ever affect your web business negatively is if you're a company who offer cheap services. If you are perceived as being cheap, then people with money wont engage with you as they'd rather deal with someone more professional.

If you're increasing your prices then you better make sure you're increasing your level of service too because if you don't, you wont compete with the big boys and your reputation will take a major hit.

Thanks for the reply, however it's not as straightforward as that. To date a certain proportion of our business has come from sole traders - this isn't because we're perceived as cheap and provide a bad standard of service, it's more to do with how we've positioned ourselves by making it easy for smaller businesses to engage with us. In any case, lower cost to suit the budgets of smaller businesses doesn't have to mean cheap. No point in going too far in to the details, but suffice to say that we're not perceived as a cheap outfit, but nonetheless a proportion of our business has come from smaller companies that nowadays don't seem to have the time or motivation to deal with their website because of how busy they are.

I assume we're not the only ones who would see a drop off in business of a certain type even when the economy is on the up, so I wanted to post to share ideas about how to alleviate that.

For what it's worth we do work for bigger companies as well which I expect to continue.

smash

Oedo wrote: »

In any case, lower cost to suit the budgets of smaller businesses doesn't have to mean cheap.

No, but it means you're in a race to the bottom. When you get to the level of "But sure my mates son can do it for €250" or "I can get it done on fiver.com" then you need to either up your approach or up your volume. Upping your volume means upping man power and man hours. For such as small return it's never going to be worth it.

There are a lot of web agencies who made it through the recession by dropping rates and taking on small clients at high volume. Now there's an upturn and their portfolios are full of small business, which means large businesses wont touch them.

antoinolachtnai

You are beginning to answer your own question.

You had a positioning that worked well in the downturn, serving solid but small businesses that had empty order books. Now the positioning isn't working anymore because the order books are full. The type of customer you have isn't interested in growing their business further.

The solution to this problem is to reposition somehow.

beauf

antoinolachtnai wrote: »

You are beginning to answer your own question..,...

This.

I think you will have to change what you are offering. Add more value. More functionality. Perhaps something to help busy smaller companies manage a busy workload better. More complex website that add more functionality.