Business Coaching

We have all heard read the reports. Our world is in an economic downturn. Many say it’s a severe recession while others use the word depression but regardless of the label, business owners are only concerned with how their numbers look.

For some, such as those in discretionary industries like apparel and travel, you are among the hardest hit.  We all know that eventually customers will purchase and profits will return but what can we do right now to preserve customers and profits?

There are two actions to take right now to ride out the tough economic times.

First, businesses must find the value in their current customer base.

In other words, business owners need to understand that the greatest asset of their business is their current customer base.

It costs upwards of six to eight times more to acquire a new customer than to sell an existing product to an existing customer, so in our current “economic winter,” it is vital to treat current customers well and find ways to add value to your current product and/or service line.

While some companies would have us believe that they are customer centered, in reality that may not be the case.  When the phones are ringing wildly with sales, customers are crowding showrooms and battling over the last item on the shelf, some owners forget that their customer’s money was earned by hours of hard work and because of that they are going to maximize the value they receive for the money they spend.

A great customer experience is the key to creating and maintaining a business relationship. As Dale Carnegie said, having a genuine interest in somebody is the first step to that person feeling valued.

Second, businesses must streamline. While it seems logical to think that having a larger range of products which appeal to the widest of range of people would be the best way to increase sales, some successful business owners to think differently.

Diversity doesn’t mean that you have a great business. It may be more profitable to sell lower volume items at higher price points and higher profit margins.

While product diversity may be important if you are a large scale retail establishment who is known for being the one place that customers can shop for just about everything, the specialty business owner may have a different focus.

In this case, selling the highest profit margin products may make more sense.  Product bundling and customer appreciation days may increase the perceived value while preserving a high profit margin.  Businesses rarely survive over the long term by focusing on low prices.

Finally, keep in mind, downturns force companies to pare marginal products and services, and focus on what they do best.

This is one of those times.

There is no denying that when the economic climate is challenging, streamlining operations is pivotal to the bottom line but remember that those customers who have believed in your business in the past are the best assets you have.

Don’t offer more, but, instead, optimize the value of our current offerings.

You can buy the cheaper office supplies but don’t discount the customer’s experience.

One Response to “Coaching Lessons to Help Businesses Thrive in a Recession”

1. Evette says:

   August 23, 2011 at 12:52 am

   It is true that coaching lessons can help businesses that are slowly turning down. They can help by providing companies with business plans that could bring them back on its track.