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Back to the basics: How basic fundamentals can help your business grow

By Dr. Harold S. Resnick    

Difficult economic times can create stress and challenges for any business. But trying times can also create potential opportunities. It is during difficult times that true leaders sustain and grow their business—ready to expand even more rapidly as the economic climate improves.

Surviving during difficult times does not necessarily require more capital. Some of the best business opportunities come from natural organic growth when a company focuses on the basics that created its success in the first place.

Following are some “back to the basics” guidelines to consider.

Focus on current customers

Current customers are your best resource for sustaining and growing your business. In times like these, it is critical to pay extra attention to every customer—to make sure their needs are being met and they feel they are being treated properly. It is harder to replace a customer than it is to address their issues. Satisfied customers tend to purchase more goods and services.

Reach out to customers you have not seen for a while. Check in with them even when they are not in the midst of a transaction to surface and address any issues. This provides a great opportunity to ask them to identify any other needs or desires that could turn into additional business.

For example: You purchase your first new car. The salesman sends you a birthday card every year and calls you one other time each year just to check in and see how you are doing. Because of those actions, you purchase three more cars from the same salesman.

On the other hand, let’s say you are leasing a high-end vehicle. Your visits to their service department are marginal—the service was acceptable, but it comes with an attitude. You never hear from the salesman until he calls you two months before the end of the lease and opens the phone conversation with, “Guess who this is?” You can probably guess the outcome: Neither he nor that dealership gets your future business.

Look for revenue growth opportunities

Your best top line growth opportunities come from current customers. Current customers already have a relationship with you. They are the best immediate source of potential value-added revenue.

Consider the following two simple examples. Your lawn is serviced by a small business owner with three crews. As the winter season approaches, business slows down and he has more capacity. He calls to make sure you are satisfied with his service. While on the phone, he asks if you need any landscape or irrigation system work. If he had not made that call, he would have missed the revenue opportunity.

On the other hand, the man who installed your landscape lighting comes by to perform basic maintenance. He complains about how bad business has been during this current housing market, since most of his business was installing systems for new houses. When you ask him whether he was going back to all those houses he installed five years ago to see if they wanted upgrades, he confesses he never kept a customer database. Today, he is paying a high price for that lack of customer focus when times were good.

Another opportunity for revenue growth is the natural extension of your business. Adding or extending a service that is closely related to your current business creates opportunity for additional revenue from current customers. It also opens up a whole new set of potential customers.

The final opportunity for revenue growth is to ask current customers for referrals to new customers. A satisfied customer advocating on your behalf is the easiest way to attract a new customer. Yet many businesses have no solicitation or referral process. Consider a program, perhaps with some incentive for current customers, to help bring new customers to you.

Search out and remove leakage

Every company has leakage. Leakage is the money that “leaks out” in between your top line revenue and bottom line profit.

There are many sources of leakage. Some of the most common sources are quality or service issues that require you to provide a service again at no charge; providing a replacement product at no charge because the initial product was defective; addressing product ordering or delivery issues; internal process inefficiencies; untrained employees who cause errors; etc.

Examine your internal business operations. Finding and correcting leakage issues can make dramatic bottom line differences.

Invest in your employees

During difficult times, many employers cut back on training and development. Others freeze salary increases. For some organizations, this belt tightening may be necessary, but it should be avoided if at all possible.

This is the time to invest in your best employees and address issues with marginal performers. Marginal performers may “pick up their game” if you describe the issues in terms of performance or behavior and not personality. They are also keenly aware that good jobs are hard to replace.

But the real opportunity is to continue to invest in the development of your best employees. Investing in employees during difficult times builds loyalty, commitment, and greater productivity.

On the other hand, employers who take advantage of employees during difficult times may find that those employees will vote with their feet when better opportunities become available.

Challenging times are not easy, but they do provide an opportunity to look hard at your business and focus on the basics. Paying attention to customers, strengthening the quality of products and services, improving the efficiency of internal operations, and developing key talent will ensure your survival in today’s economy and position your organization for dramatic growth as the economy improves.

Dr. Harold S. Resnick is an internationally renowned organizational development consultant. His most recent book is titled, “Energizing Workplace Performance.” He can be reached through www.worksystems.com.


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