Running Your Business Well in a Poor Economy

In this article I am going to go over what I believe to be 4 Key points to concentrate on in periods like these – that being said, they are critical areas for any business at any time. Get a grip on these areas and you will give yourself the best possible chance to survive in the tough times and really prosper in the good times.

Communication

How you communicate internally and externally is crucial, both your employees and your customers need and want to hear reassuring messages and to see you acting in a positive and strong fashion. It’s all too easy in difficult times to fall into a sort of paralysis and to reduce your visibility both internally and to your customers …………don’t !!

In times of emergency it is absolutely necessary that you have a decisive communication plan for your internal and external customers. Your employees may be worried about their jobs and their prospects, and your silence will do nothing to conquer their fears. If they are worried or concerned, rumours will start, and before you know it productivity will go down and the strongest ones will start looking elsewhere for the security and reassurance that they seek.

The information that your customers are receiving – if it doesn’t come from you, will be from the media and the rumour mill, and all too often if they have nothing to persuade them otherwise, you will be lumped in with everyone else in your sector or industry, and before you know it, the trust and reputation that you have spent years building up will be gone.

Even worse than no communication is poor communication, so make sure that you communicate early, often and be as clear as possible. Do not be tempted to save some money by reducing your communication – this is a false economy. It doesn’t have to be expensive to communicate nowadays, as there are many inexpensive ways to communicate with your staff and customers. Look to online media such as Intranets, Blogs, and Ezines or in the case of staff, talk directly to them, and work with them to generate ideas that will enhance your business and make you stronger. Now is not the time to keep them isolated and in the dark.

Customers

One fundamental rule in business is that it is far more expensive to go out and get a new customer than it is to keep an existing one. Challenge yourself and ask yourself what you are doing to ensure that you are keeping your existing customers happy and coming back, rather than forgetting about them to focus exclusively on new customers. I’m not saying don’t look for new business, I am saying don’t sacrifice your existing customers in the search for new ones.

Your current customers already have a positive experience with you and what you do, and they will most likely be far easier to access than new customers. Look for ways to cross-sell, and also search for discounts and special offers. Do you have a structured approach in place for how you will deal with customers after they have placed an order or when you have made a sale? Make customer retention a key platform for your business. How good is your customer service? If you don’t know, find out – and fast. In my view, one of the biggest differentiators of businesses is the quality of customer service; sadly it is not that difficult these days to differentiate yourself positively on almost any aspect of customer service. My experience with most businesses and organisations is that customer service is quite commonly poor, and all too often, shocking. It doesn’t cost a lot to establish policies and procedures that will give top notch customer service. Trust me, if you do this your customers will notice, and they will come back and be prepared to buy more.

Who are your most valuable customers? Again, many businesses do not know this and they spend lots of time, money and effort on those customers who don’t add much to their bottom line. Once you know who the most valuable customers are – focus on them, ditching the least valuable ones if necessary. The Pareto Principle applies to just about every industry I know, in more or less the same way – why spend time, money and effort on those low profit customers when you could be channelling that effort and investment into the most profitable ones.

Marketing

Don’t stop spending on marketing. Yes, look at your marketing expenses and what you are getting back, and if it’s not viable, look at other ways to do this better. Again, with current technology and approaches you can market effectively without it costing the earth. Sometimes it just takes a bit more effort to evaluate what you are doing and where you are focusing your efforts.

Have you really segmented your customer base? Do you know who your target customers are and the most effective channels to access them? If your target segment is 18-25 yr olds, a full page spread in the Daily Telegraph isn’t likely to be the most effective way to access this market. Don’t be seduced by the Social Networking hype and blindly start Twittering and spending all of your time on Facebook and Bebo, yes they can be effective – but not for everyone, don’t just follow the herd unless you have done your research. Once you know who you are targeting, and the way that group gets their information or makes their buying decisions, THEN go down that route.

An effective marketing strategy does not need to be expensive, but it does require planning and consistency of approach.

Training

One of the first areas that companies often cut back on is training. I for one cannot understand the rationale for this. If you look at other areas such as sport, if things get tougher and more challenging, you don’t tend to see people saying, might as well not bother with the training sessions then, as things are more difficult and the competition is tougher than last year.