During these challenging economic times, companies are scrambling to find ways to reduce expenses in order to survive. Ironically, this strategy has weakened their position and created an opportunity that can be exploited to separate your business from the competition. Instead of following the pack and making cuts, you should focus on increasing the value that you are providing to customers. As consumer wallets are squeezed they want to get the most out of their dollars, not pay the same (or even more in some cases) for a lesser quality product or service.
The cost that customers are willing to spend directly correlates with the value they expect. It is accepted that as value increases, so will the price. Therefore, providing additional value to the customer can increase revenue. Grocery shoppers flock to Whole Foods because of the high quality of their products resulting in significantly higher margins than their lower cost competitors. Consumers consistently prove that best value is more important than lowest cost. Take for example Walt Disney World, which is one of the most expensive family entertainment options available. The theme park is consistently packed because visitors believe they are getting the best value for their $85+ ticket versus the lower-cost competition. Increasing value does not always require a large financial investment from the business. Small adjustments can often yield exceptional results. Never underestimate the opinion of your customers. Solicit feedback via surveys, comment cards, or simply talk to them. If they are taking the time to provide you their opinion, take it seriously and act on it. They are telling you what it will take for them to spend more money in your store!
Conducting business also costs the customer their time. Time is finite and you are competing with other time consuming priorities such as family events, eating, recreational activities, etc. Time wasters such as waiting in lines, on hold on the telephone, or slow service drastically decrease the perceived value of your product. Show your customer that you appreciate them choosing to spend their limited time with you by identifying methods to conduct their business more efficiently. Chick-Fil-A has an army of folks working behind the counter with separate employees conducting the transaction with customers, providing drinks, and filling orders. If there is an exceptionally long line at the drive-thru they have employees outside physically taking orders and completing credit card transactions before you even get to the speaker box. This effort coupled with the fact that Chick-Fil-A is consistently ranked number one in order accuracy is why they are ranked number one in per store sales and the only fast food restaurant averaging more than $3million per location annually.
Do not become so focused on expanding your offerings that you lose sight of your core. If you are in the fast food business, remember to provide speedy service. If you are in landscaping, don’t lose focus on providing beautiful scenery. And if you are in the entertainment industry, don’t lose focus on making customers feel relaxed. I have news for cable television providers; people pay you to provide cable television. I don’t care that you also provide internet and free long-distance phone service. If my cable TV signal continues to drop out, I am switching to satellite.
Never nickel and dime your customers. Nothing is more annoying than to fork over more money around every turn. Today, people speak poorly about the large airline carriers because of the additional costs to check luggage and elimination of snacks from some flights. Since travelers already accept the fact that airline costs consistently increase, the industry would be better served by increasing the cost of airfare by the cost to check the bags (and a bag of peanuts) instead of suddenly charging for these services. To take it a step further, offer expedited check-in and coordinate with TSA for an express lane at security for those not carrying any bags, thus decreasing wait times and eliminate departure delays caused by flight attendants having to find space for carry-on luggage on full flights.
Large and small businesses can separate themselves from their competition and place themselves in the best position to weather the economic storm by increasing the value they provide instead of by making cuts. Think about the value you are sacrificing by cutting your staff, reducing employee training, and other short cuts. How many customers are you losing because you don’t want to pay $10 an hour to hire an additional checkout clerk and reduce customer wait times? Can you improve the dining experience for your guests by hiring an additional server to focus solely on ensuring drink glasses remain full? Perhaps you can improve the value you are providing to nursery customers by conducting gardening tip workshops. What can you do to improve the value that you are providing to your customers and turn around your business?