Sandra Felsenstein
Head of the DINKA consultancy
A deep review
A crisis with falling sales and price increases, like the one in 2018, requires a deep review of expenses, trying to be more efficient inside the company.
Specifically, this means avoiding superfluous expenses that do not generate perceptible added value for the client, optimizing existing resources and addressing improvements to the organization and its processes.
But care must be taken, for example, when defining which items are included under the heading of “superfluous expenses.” Low-cost advertising is not and can be a very significant advantage.
Regarding pricing policy, my suggestion is to adjust them cautiously. Although, in desperation, business owners often try to regain profitability by punishing prices, this can work against them, resulting in an even greater drop in sales. I think that energy should be focused on selling better instead of selling more. That is, pay greater attention to the product mix in relation to the profitability that each one brings to the company.
The opinion of the specialists
Anabella Cornejo, director of the consulting firm Pymehelp in Villa María, Córdoba, assures that in the face of the sales crisis with pressure on prices, it is key to take a moment to think and investigate before making the wrong decisions. I suggest clients ask themselves if the drop in sales is strictly due to the crisis, or are there other reasons. What is happening, for example, to your competition: is it the same, worse or better? Once you arrive at an answer, consider what should change so that customers prefer you and not the competition.”
Sandra Felsenstein, owner of the Dinka consulting firm, says that first of all it is important to remember that crises are an opportunity to improve. “If we were not able to be more efficient in good times, the crisis drives us to be so, because we must take into account that it is during crises when markets make non-competitive companies disappear,” he says. “Therefore, in the face of sales declines, it is necessary to rethink the commercial strategy, making sustainable, intelligent decisions that do not have a negative impact in the medium term,” he recommends.
Oscar Navós, rector of the Argentine Business School University Institute (EAN), also links the crisis with being more efficient: he suggests 'stabilizing the ship'. "It recommends defining a period of caution in the execution of expenses, without affecting the quality of the service and the staff, then applying the 'zero-based' budget concept that requires informing each sector or area of the company of how much money it will have in the period in question." These are circumstances that test the leadership of the manager or owner of the company,” he says. Different scenarios and their possible consequences and the responses that will be generated by the company must be analyzed.”
Patricio García de Leo, director of the digital marketing agency Known Online, says that when the company has financial backing, it is not a bad decision to focus on gaining the market shares that the competition loses or cannot capture. But when resources are scarce, we must seek to reduce production costs and explore alternatives. "Electronic commerce can be operated 100% by third parties, becoming an alternative source of income. In parallel, it allows it to be a financial leverage with suppliers of demand generation and product delivery," he states. Cornejo says that there are businessmen who show resistance to the development of a website. "We show them success stories in times of crisis. We talk to them about Villa María EDUCA, a series of education professionals who came together to teach short-term courses, and who discovered that those interested continue to appear in times of crisis simply by having published the courses in advance.
