Rules for Small Businesses to Live By
By Suresh Srinivasan
If the headlines are to be believed, economic activity is finally on the uptick. After three tough years, some companies may be breathing a sigh of relief -- and may be tempted to return to the profligate ways of the late 1990s. That's a temptation worth resisting.
Even in good times, companies should continue to adhere to the same strict business fundamentals that got them through the bad times. Successful companies have more than good fortune in common; they stick to essential business principles. The rules we've followed during tough times won't change one iota as things improve.
If you're selling to business, remember that every company always wants to do more with less. In other words, even given these past few years of extreme cost-cutting, companies are not looking to cut and run. They want to grow their business and utilize existing resources to do more. In up and down economies, opportunities abound to sell your products and services.
So consider these eight recession-tested rules as you chart your company's course moving forward:
Be manic about product/service quality.
Perfect what you sell and make sure it works perfectly each and every time. Whether you're delivering a product or service, every customer must have a satisfying, consistent, repeatable experience. Their experiences will give you a platform for word-of-mouth and repeat business through existing customers; indeed, your goal is to make them evangelists. Many companies chose not to cut corners with product and service quality during the recession, but instead embraced the Japanese philosophy of kaizan , and sought to make incremental improvements as they went. It's not necessary to hit a home run each time; just strive to build sustainability in the products and services that you sell.
Build around existing customers.
Your cost to acquire a new sale is drastically lower if you can determine what products you sell that existing customers don't already have. So survey your customers. Increase survey response by giving away something for the customer's time. Mine whatever data you already have. Once you've identified those customers, implement a way for them to try those products/services before they buy. You'll be amazed how well received your new offering will be, and how quickly you can grow your profits. In an improving economy, it's even more important to continually offer new products to existing customers. The channels are already open; you have an opportunity to have these kinds of discussions, tapping a source of revenue that many businesses don't fully realize they have.
Build around existing employees.
Hiring and retaining top talent sounds easier than it is, but just as it's vastly better to grow a business through existing customers, it's likewise far smarter to build from within - especially in a challenging labor market. Provide an incentive-oriented environment where employees partake in profits, aligned with your business goals. One of a companys main goals is to provide 100 percent customer satisfaction. To align employees with that goal, companies should provide spot bonuses, employee profit sharing, professional development and such for those who exceed the customer's expectations time and again. Make your employees shoot for the stars and train, train, train. As the economy improves, you need to avoid employee churn, since employees are your link to current customers; they're your institutional memory. Your ability to deliver quality service can come only from the personal touch that is part of knowing (and learning from) your customer.
Partner your way to success.
Profile your customer base. Figure out who else might sell services/products to those customers. Pursue partnerships with these firms and offer reciprocal commission-based alliances. Make a concerted effort to put together affiliate programs, retailer programs and partner programs. Formalize the process, and line up the profit percentages in advance. This can then become an alternate sales channel of evangelists, and you'll have a larger product set to sell your own customers. Some companies pursued this to great effect during the recession, empowering partners to effectively sell on their behalf. You can strategically resell some other company's products to your customers as a way to increase your overall capabilities. If you can secure partnerships with other firms that have a sphere of influence over similar kinds of target customers, you can identify complementary products and services to cross-sell and up-sell.
Innovate relentlessly.
If you're providing a service, it's necessary to continually put yourself in the shoes of your customers. Figure out what their needs are -- by asking them. This can be dizzying initially because they'll tell you a thousand different things at a thousand different times. But with a large enough base to survey, you'll begin to recognize common themes across your customer base. Integrate the solution of these problems with the products you sell. Your customers will be happy, you'll solve more of their problems, and you'll build your unique selling proposition at the same time (while building competitive advantage).
Adapt your product to different markets. As important as product/service innovation is, it's critical to recognize that your existing product/service base probably isn't spent. Even if you've managed to saturate a few markets, you almost certainly haven't dominated them all. The key is to diversify your revenue base, and thereby open one or more new sales channels.
Perfect your unique selling proposition.
Why is your product/service unique, and why should someone buy from you? This may be a moving target as your competitors' products shift from day to day, but keep your sales force continually updated so they can use this in tactical sales. Reinforce this message in all your marketing. The recession compelled focus and clarity, and while the level of hype may increase as marketing budgets once again grow, you can prevail by not losing your focus - and by ensuring that your sales and marketing teams not lose theirs, either.
Service, service, service.
Whether your customers pay you a nickel or $100,000 per month, they still trust you for a critical service or product. Their hard-earned money pays your salary. Breed a culture where employees treat customers as if their salary depends on it -- because it does.
Continually benchmark yourself -- then do the same with your competitors. Understanding that you'll have to filter out some of the noise, take a realistic snapshot of the industry overall, assign the industry a growth rate that you believe is an accurate depiction of reality, and see where you're growing.
Some of this counsel is timeless, perhaps, but it proved especially timely and valid during the recession. Your company's recovery is neither inevitable nor universal; it's in your hands. During the last three years, many companies took advantage of economic adversity to become more profitable by adhering to fundamentals.
Above all, be in control of your growth. Moving forward, scale so you can grow on your own terms. After all, it was precisely the "growth at any cost" mentality that led to the meltdown three long years ago.
About the author, Suresh Srinivasan -
Suresh Srinivasan is president of BroadSpire www.broadspire.com in Los Angeles. BroadSpire Inc. was named to the 2003 Deloitte & Touche Technology Fast 50 in the Los Angeles
Visit the Author's Website
(Published 6/14/2010, )
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