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SMALL TALK

July 12, 2009

A different way of doing business

JOYCE M. ROSENBERG AP Business Writer

NEW YORK — The recession can have an upside for some small business owners by giving them opportunities to strengthen their relationships with customers.

Many of these opportunities grow out of adversity, for example when customers can no longer afford to pay the prices, rates or retainers they agreed to in better times.

Amy Power, who owns a Dallas, Texas-based public relations firm, had a client, a spa that opened for business in October 2007, the month that the stock market peaked and then began its huge decline.

“They really took a hard hit,” said Power, president and CEO of Power Public Relations. “They were ready to pull the plug on their PR programs.”

She faced a similar situation with a second client, a dental office. So Power took a big hit herself, and cut the retainers that both clients paid by two-thirds.

But Power said she also made a vow to these clients: “I will work just as hard. You’re not going to fall by the wayside.”

“I think they appreciate that there’s a certain amount of honor that goes with that kind of agreement,” Power said. “I believe my firm will be better positioned for stronger relationships and better business” when the economy improves.

Just ending the relationship because the client can’t pay the full retainer wasn’t an option. “That doesn’t do either one of us any good,” Power said.

Many other public relations firms are being forced to make the kinds of adjustments Power has made. At many companies struggling or just worrying about the economy, marketing expenses are among the first budget lines to be cut.

Richard Dukas has had a number of clients say they need to cut the retainers they pay his firm by 50 percent or more. He’s told them OK.

“The philosophy is, some revenue is better than no revenue,” said Dukas, president and CEO of New York-based Dukas Public Relations.

But Dukas also has his eye on the future. “If it’s a good client and we believe in their business, then we’re going to try to weather the recession with them.”

Cutting retainers, rates and prices is clearly a key way to build relationships in a recession. So is paying keen attention to all of a customer’s needs.

Accel Inc., a Lewis, Ohio, company that designs, engineers and assembles packaging, does a lot of business with retailers of health and beauty products. Chairwoman and CEO Tara Abraham said her company works with customers to come up with packaging that’s appealing and is a good value.

However if the packaging creates problems for people working in the stores — think of styrofoam peanuts flying everywhere that must be cleaned up — the customer is ultimately not getting a good deal.

So, Abraham said, part of her company’s job is to consider what happens when the products get to the stores.

“How do we reduce labor costs in the stores?” she said.

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