While politicians might be wary of admitting it, the nation seems to be in, or at least headed toward, a recession. In April, real estate information firm RealtyTrac reported foreclosure filings spiked 112 percent in the first three months of 2008, resulting in 155,000 families losing their homes to foreclosure over that span.
While the housing crisis is definitely a concern, the prospect of a recession is causing a stir in other areas as well. In the business world, a recession almost always leads to layoffs. While it might seem as though small business would suffer most in a recession, that's not necessarily true. Analysts often note that the smaller the business is, the more capable it may be of surviving a recession. Unlike their larger counterparts that boast a hierarchy of employees and high overhead, small businesses are often more flexible. Also, small businesses tend to have more personal connections with their customers, a definite advantage when money starts getting tight.
Small business owners looking to cultivate those customer relationships should consider the following tips.
â¢ Do whatever it takes to keep customers satisfied. While it might be one-sided, customers are more likely to share an unpleasant experience with a business than they are a positive one. Consumer surveys note that a person who has had a negative experience with a company will tell roughly 10 people.
During a recession, consumers place a greater emphasis on getting their money's worth, so hearing a friend speak negatively about a local business could have a very negative impact on that business' chance to gain new customers.
When money is tight, small businesses should emphasize to employees the increased importance of satisfying all customers and keeping both the regulars and any new clients as content as possible.
â¢ Increase trusted employees' decision-making power. If a customer has a question but the owner or manager is not in, that could lead to a lost customer. By giving trusted employees the power to make certain decisions, such as whether or not to offer discounts on larger purchases, small business owners could be keeping customers they might otherwise have lost. In addition, customers will respect a staff that's experienced enough to have several people capable of making decisions, and are more likely to return as a result.
â¢ Keep track of any complaints. While some customers seem born to be difficult, it's good to treat all complaints in the same way and to keep track of all customer complaints or problems.
If the same complaint is brought up time and again, it's not an aberration but rather a trend. A negative trend will result in diminished business even during boom times, and especially during a recession.
A second element to keeping track of complaints is the chance to develop an effective means of complaint management.
Customers often appreciate the personal touch smaller businesses offer, and that includes a more empathetic approach to addressing complaints. Make your complaint management approach as personal as possible.
â¢ Image is important. During a recession, many people cut back on their spending. That said, when people do decide to spend money, they want to get the most out of their money. A professional appearance and image makes a business seem more credible.
Discuss with employees how they and their appearance are integral to the company's success. Make sure facilities are clean and safe, and make sure employees present themselves in a professional manner, both in how they speak and how they dress.