Capitalising On Excess Resources To Expand

Albert Einstein said, “Problems cannot be solved by the same level of thinking that created them.” That is why it is critical for entrepreneurs to think outside the box when they face challenges. It may sound cliché but that is the truth. Thomas believes that crisis situations are actually one of the best times to look for opportunities and to be creative with your resources. In our first book he gave an example of how PestBusters created and branded a complementary service in 30 days during the SARS crisis in 2003 that netted the company a cool $500,000. When the H1N1 flu epidemic emerged, the company was considering whether it was a good time to re-start that service. After looking at all the different factors, they decided against it because there was not enough demand to support the service. They found out that H1N1 was not as serious as previously reported and that it was very similar to the seasonal flu. Based on that, they knew that the fear of H1N1 would soon subside and any demand for his premium services would drop. It proved to be a good call as the public became more educated about H1N1. This is a great example of why we advise you to look for opportunities around something that you know, so that you can discern what is a real potential opportunity and which is not. However, Thomas did spot other potential opportunities. Instead of looking inward (in Singapore), they looked outward.

“We have not retrenched anyone because we don’t believe in doing that nor have we cut our staff’s salaries. Instead, we looked for other ways to capitalise on our excess resources. Before the crisis struck, I had already been looking for another country to expand into as the Singapore market was already matured and our Malaysia operations had stabilised. I was invited to go into a few different countries like Doha, Philippines and Indonesia. I visited those places and I decided that the Philippines market had the greatest potential. From what I observed, Philippines doesn’t depend on export and the hotels there don’t overly depend on foreigners. Local tourism is enough to sustain their operations. When I stayed at the Shangri-La hotel, I noticed that the hotel’s lounge and café were always filled with customers at all times of the day. People were there to conduct meetings or to meet friends or to have high tea. In fact, a lot of the functions held in the hotel are organised by the locals who come from the different states around the country. Once I had decided to focus on the Philippines market, I started channelling our resources to build our business there. The timing was also perfect as I was able to send more of my experienced staff over to the Philippines for a longer period of time.

“Our usual practice with any new country that we expand into is to send our experienced staff there to provide assistance and support and make sure that everything is running well. We would usually send one to two men at the most because we run on full capacity. However, because of this crisis, we had the luxury of sending three men to Philippines. As a result of that, we were able to capitalise on the growing demand of our services. In fact, before we could even complete the first phase of our treatment for one hotel, we already secured the contract for our services with another hotel. And this was for a huge property located in Boracay, which required a lot more manpower than the usual hotel. In the end, my staff stayed in the Philippines for two to three months. One of them has been stationed there for more than six months because business was growing so quickly.

“I believe that one of the reasons for the rapid growth of our business in the Philippines is due to my partners’ willingness to work closely with me. One of PestBusters’ differentiations is our training and our staff. Before we start any new operations, we spend time training new staff until we determine that they are equipped with the necessary skills. We only start doing sales after our staff completes their training. My partners agreed with this system and they were willing to send the new staff to Singapore for two months of training without having any sales at all. Some people may think that it is crazy to stick to such practices in such bad times. They think that a company should be thinking of ways to cut down on expenses like training and focus on getting in the sales instead. But my partners shared my vision that our first client will be our “showcase” to brand our company and attract potential clients. In order to achieve that, we needed to have trained staff who could deliver. Our newly recruited Filipino staff completed their comprehensive training in Singapore in January 2009, and immediately we got our first client—the Shangri-La Makati. When we went in there and did our thing, they saw the level of service we provided and our name started to spread among the Shangri-La group. Now we have a group contract with them because we are doing the entire Philippines chain of Shangri-La.”


The Greater The Crisis, The Lesser The Competition

Recessions are useful for weeding out the weaker players. That’s why there’s the saying, “Only the strongest survive.” As we said earlier, challenges and difficult times force a person to come out of their comfort zone. One needs to be creative and flexible to respond quickly to the different situations that are beyond our control. This will actually benefit the business in the long-run. In times of excesses people don’t take the time to stop and think about how to lower their costs or increase productivity. But when you stop and analyse the different aspects of your operations, you may find resources that could be better utilised or eliminated because they were needless in the first place. This will also have a positive impact on your business as making the changes can help your company become more efficient. In a report released by the New Zealand Trade and Enterprise (NZTE), they focused on studying the strategies and the key factors of 13 companies who have remained on the Global Fortune 500 for at least the last three recessions. One of the seven key factors that they identified was, interestingly, an increase in their advertising and marketing budget. The reason behind it was to “increase market share and take advantage of greater advertising reach, possibly at more competitive rates.”

In a crisis, most businesses stop their promotional activities. Their focus is to cut down on expenses and possible losses. A lot of the times they forget that what helped them arrive to where they are today, more often than not, was their focus on growth, plus a healthy appetite for risk-taking. We are not talking about gambling, but calculated risk-taking that is the bedrock of entrepreneurship. This presents a very unique situation; a very rare opportunity for those who can recognise it. Just imagine, while most of your competitors are cutting down their marketing and promotions, and experience shrinking sales as a result of their cutbacks; you can buck the trend by ramping up your marketing. This will help you increase your market share and even dominate your niche. In a boom market, everyone is actively marketing. Even though the target market might be bigger, but competition is also much tougher. Your target market has a lot of alternatives and options to choose from and your brand may get lost among the crowd. However, in a downturn, while your target market of potential customers may probably shrink but there is also less competition from other businesses. If you are the only one who continues to do consistent marketing then you will definitely gain a bigger market share.

An example that was given in the NZTE report stated that a study by researchers of the Profit Impact of Market Strategy (PIMS) showed that companies that increased marketing spending during a recession gained market share three times as fast during the recovery compared to companies who cut advertising spending. The NTZE report then proceeded to illustrate the example using the case study of Procter and Gamble (P&G) and how their creative advertising led to the coining of the term “soap opera”. During the Great Depression, while competitors were cutting down on marketing, P&G increased their advertising spending. They turned to the radio to reach out to their group of customers who they knew were key purchasers of their products—the housewives. P&G sponsored and created radio serials that were broadcasted in the weekday daytime slots when the housewives mostly tuned in. These radio serials became known as “soap operas” because they were sponsored by P&G’s cleaning products, including its key brand product—Ivory™ soap. The campaign was a success, which led the company to doubling its advertising budget every two years during the depression. It was said that A.G. Lafely, who served as the CEO, President, and the Chairman of the Board of Procter & Gamble until June 2009, stated, “When times are tough, we build share.”

That may be well and good for a company who can afford to spend on media like the radio. But what about the average Small and Medium Enterprises (SMEs)? There are many low-cost advertising and marketing activities that you can still do if you are an SME owner. Below are just some of the many strategies that you can implement on a limited budget:


  • Use direct response marketing techniques.

Instead of doing image branding ads, meaning advertisements that say little but feature many images, focus on creating simple, copy-based advertisements that has an irresistible special offer and a strong call to action. Some examples of direct response materials include print ads, flyers, personalised sales letters, special reports, email blasts, et cetera.


  • Focus on qualified prospects.

Since you have a limited budget, spend more effort on targeting customers who will give you the best return on investment for your advertising dollar. Be more specific in targeting your market. For example, if your target market is the high-income earners, then don’t distribute your materials indiscriminately, instead, direct your materials to places where these people work, eat, live and entertain.


  • Provide free education.

Put your experience and expert knowledge to good use by educating potential customers about your product or service. The more people know about your product or service, the more they will be convinced to buy your products. One industry that puts this strategy to good use is the training and motivational business. The free previews that they offer are a mass selling platform to educate potential customers about their payable courses.