The Polaroid Approach to Reinventing Your Business

The headlines are filled with doom and gloom about the economy—there's no denying it. But what the media often misses is that the biggest wealth transfers happen during downturns. Businesses are either hitting the panic button, cutting back on marketing, or reducing training. In moments like these, it’s crucial to be proactive rather than reactive.

There are three kinds of businesses during hard times:

1. Cellar Dwellers – They hide, waiting for miracles or government bailouts, hoping things improve without taking any action.
2. Hold Fasts – These businesses continue with "business as usual," unwilling to adapt, convinced that past strategies will carry them through.
3. Polaroids – Businesses that reinvent themselves when the market shifts, just like the Polaroid camera. Once in decline, Polaroid rebranded itself as the go-to “party camera,” and they’re thriving.

The goal is to be a Polaroid. Here’s how.

1. Reassess Your Core Offering

Ask yourself, What problem do we solve, and is it still relevant? If the answer is yes, go deeper: How can you add even more value to your clients? Check your Net Promoter Score (NPS), and examine your customer feedback. Are there recurring complaints or requests for specific enhancements? Stay close to your customers and find ways to elevate your product or service to maintain top-of-mind awareness.

2. Diversify Revenue Streams

If you’re reliant on just one revenue source, consider adding another. The goal isn’t necessarily to create ten income streams but to avoid dependence on a single source. Look for complementary offerings, or even unconventional opportunities, such as Kroger’s loyalty data. Kroger turned customer data into a billion-dollar business. Think about assets you already have that could serve a different purpose or customer base.

3. Cash Flow Is King

In tough times, cash flow becomes paramount. Ensure you’re managing it wisely and making every dollar count. Review how effectively and efficiently you’re operating. Make your business nimble, cutting unnecessary costs but without sacrificing quality.

4. Retain and Empower Quality Staff

Now is the time to invest in your team. People don’t leave their jobs; they leave their bosses. Ensure your staff feel valued and supported. Resist the urge to cut back on training, as it only weakens your business. When staff aren’t adequately trained, customer service and product quality suffer. Strong staff retention and development ultimately fuel customer loyalty.

5. Revisit Marketing Strategies

Marketing budgets are often the first to go during downturns, but this is a mistake. Instead of slashing the budget, make sure each marketing dollar delivers value. Review the effectiveness of your campaigns and consider whether your current agency or strategy aligns with your goals in challenging times. Aim for each dollar to bring back $1.50, if not more.

Wrapping Up

These practices aren’t about survival; they’re about positioning your business to thrive when others falter. If you’re proactive in reinventing yourself, refining operations, and nurturing relationships with customers and employees alike, you’ll not only withstand hard times—you’ll emerge stronger.