(530) 467-5690 Chris@TeachU.com

A three hour tour?

It’s no secret the economy has slowed to a crawl. Just about every business is feeling the pressures of rising costs (energy prices affect everything) and declining sales. It’s time to watch expenses but be careful about cutting corners.

When sales drop, it is more important than ever to improve your business. Many businesses will cut expenses to maintain profits. This is the strategy of the least creative of managers. The goal of their cost cutting measures is to protect management’s income, not the well-being of the business.

To protect the future of the business, the smart managers will continue to invest in the company’s growth while controlling unnecessary costs. It is absolutely vital that every aspect of your business seen by your customers is presented in ship shape. Look again at the picture. Paint will not change the performance of the boat so painting the boat during a recession would be an unnecessary expense, right? Wrong. Do you think many people would want to board this particular harbor cruiser? People are in no hurry to board a sinking ship. Potential customers are equally reluctant to buy from a business nearing failure.

Customers can tell how well your business is doing by the things they can see. Does your website have ©2003 All Rights Reserved at the bottom of every page? Are the pictures a little out of date? Is your website touting a “new” product that you released in 2001? Does your “Company News” page have an interesting article about an award you won in 1998? I’ve seen all of these examples this week.

If I order something from your business, will it arrive in a used and badly beaten, dirty shipping box? That’s the way goods arrived when I ordered from a certain telescope company in spite of the CEO’s assurances that they were “working the shipping problem by appointing a task force.” That’s CEO talk for “I don’t give a damn about our customers.”

Does he need a task force to find out why $1,000 telescopes are shipped in filthy, improperly packed boxes? The CEO can walk down to the shipping department and see for himself exactly what is going on. He doesn’t need a task force. But he’d have to care enough to actually go look. He doesn’t care. My subsequent order arrived in the exact same condition. The customer, me, could see that Meade Instruments is a poorly-run, failing company from the total lack of care they give to the things I could see. I’m now a former customer of Meade Instruments.

If your company has a delivery truck or a fleet of delivery trucks, are you making extra effort to keep them spotless?

Are your stores clean and neat or are your letting things slip because you’re operating on a very tight payroll? Is your service slipping?

The course of the typical successful restaurant is the best example of how businesses fail by “controlling” costs. They start with a big opening splash. Lots of positive buzz. You decide to try it. Wow! The food is great. The service is excellent. The place is immaculate. You eat there pretty frequently. It’s on your favorite places list.

Then you get busy, work too much, travel too much and don’t go out very often. You return to your favorite place a year later and it’s not quite the same. You notice food on the carpet and some nasty stains. The windows aren’t clean. The dishes show wear. The server seems tired. The food isn’t as good as you remember it being.

The restaurant has really controlled their operating expenses to match declining sales. You won’t go back. It just doesn’t feel clean. Too bad, you liked the place.

Everyone reading this can name a restaurant that followed this path to “closed”.

If you must cut, don’t cut anything your customer can see. In fact, as your competition does exactly that, you should improve everything your customer can see. Provide better service. Update your website, motivate your talent and spruce up your facility.

Chris Reich, Author of TeachU’s Business Talk Blog
Chris@TeachU.com