The recent economic downturn looks to be claiming its first corporate victims.
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Among the list of once strong retailers scurrying for bankruptcy protection are industry giants Linens 'n Things, Bombay Company, Sharper Image and Steve & Barry's.
This raises a frightening question: can your company make it through this bad economy?
The key to business survival in a down economy is having built up enough customer loyalty and customer trust to weather the storm.
That business advice comes from Dr. Tom DeCotiis, founder of enterprise growth consulting firm CorVirtus and author of the new book "Make it Glow".
Dr. DeCotiis notes that "In a down economy people focus their spending on companies they trust. As consumers get choosy, mediocre choices fall by the wayside for one reason: These companies have not earned enough customer loyalty to survive a challenging economy."
Business Advice for Surviving an Economic Downturn
Here are Dr. DeCotiis' five essential tips to make it through this tough economy and lay the groundwork for even more success.
1. Focus Your Employees on Creating Positive Customer Transactions.
Insist that your employees provide a great experience every time and teach them how to do it. Train every employee in proper customer service procedures and ensure they clearly understand the importance of the customer to the company's, and their own, survival. In difficult times, companies do not get a second chance to make a good impression on their customers.
2. Ensure Your Customer Feels Valued
Customers need to valued, not just for their money, but for who they are. In order to do this, make sure that your company is addressing your customers' need for a strong sense of belonging and significance. For example, make sure that your staff is positive and proactive with complaints rather than negative and reactive.
3. Set Your Customer Expectations
It is not a matter of exceeding customer expectations, but guaranteeing that your customers are never disappointed. Use your company's unique selling point (USP) to shape your customer's expectations. Saks Fifth Avenue sell their consumers on their exclusive and elegant shopping experience, and when customers go into their retail outlets they are not disappointed.
4. Ensure That Your Employees Understand Your Company's Values
People are drawn to integrity whether it comes from another person or a company they buy from. If your employees understand what your company stands for and is trying to accomplish, then they will accomplish it. This is important to remember as owners train managers who train employees and so on. The result of this communication chain is a lack of consistency and alignment with the original values of the company. Spot check different locations of your business with "secret shoppers", people posing as customers who will report to you their experiences. This will tell you exactly how your company's values are being adhered to.
5. Evaluate How Cutting Costs Will Affect Your Customer
There is a big difference between cutting and managing costs. What you never want to do is cut quality. A company lives or dies by its reputation, and quality is at least one-third of its reputation.
Remember, You Earn the Business You Deserve
Customers who love you will never leave you, or will only do so as a last resort. The key to surviving in a down economy is to not lose sight of what matter's most -- keeping customers happy.
"Focus on keeping your company worthy of your customers' loyalty," says Dr. DeCotiis. "If you do, then you will propel your business through this downturn and create a solid foundation from which to grow in the future."