Bottom Line Killers And How To Beat Them
by Tom Egelhoff
Over the past 35 years I've talked to thousands of business owners. In spite of their differences there are many similarities they share and many common mistakes they make. In this article I'll explore two of those mistakes and how to correct them or keep them from happening.
Starting a business is like playing a musical instrument. You practice day after day to become a professional musician. What most people miss is while you are becoming a great artist you should also be studying how the music industry works so you'll be prepared for your big break.
The business owner learns everything about getting the product or service out the door, only to find that they fall short in the actual running of the business and as a result the business fails.
The first mistake is customer service. Can you define good customer service? Few people can. Why? Because the level of satisfaction each of us desires is different. We sure know bad service when we get it, but good service often goes unnoticed.
Why do 90% of franchises succeed while 85% of small businesses fail? They have perfected each aspect of their business. Can you name the very best McDonald's restaurant you ever visited? The best Pier One? Pizza Hut? The point I'm making is that customers really don't expect "knock your socks off" service. If you "wow" them this time what are you going to do to "wow" them even more next time?
What customers really want is consistent professional service time after time. Each time they walk in your business they are taken care of without hassle or problems. This doesn't mean that you don't do your best when taking care of them. It simply means there is a level of customer service you CANNOT provide profitably.
The problem for new businesses is they try to be all things to all people. No customer left behind so to speak. Soon this takes a toll on profit because of inefficiency. Can you get a steak at McDonalds? Sure. They could run over to Albertson's and throw a steak on the grill for you. Good customer service? You bet. But is that profitable for McDonalds?
You and your employees need to define the exact level of service you CAN profitably provide on a consistent basis. Are you sometimes required to go beyond this limit for a customer? Of course you will. But when you and your employees are providing consistent professional service day in and day out your customer retention and profits will rise.
Next, let's deal with employees. Retaining employees increase your bottom line, yet many businesses have a revolving door of workers. Training new employees is extremely costly. New employees make more errors. If your customers see new faces each time they visit, what message does that send? The first thing I think is, "This must not be a good place to work or people would stay." I can't count the owners who have told me, "There are no good workers anymore; people will leave for .20¢ more an hour."
I'm sorry but no one leaves a job they truly enjoy for eight dollars a week. Fear of loss is always more powerful than expectation of gain. What I hear is that you are a bad manager with poor people skills. You probably don't show appreciation for what they do correctly but are always ready to point out what they do wrong.
Years ago I found a "60 Day New Employee Interview." It does two things. A new employee can often see fresh ways of doing things. These ideas can improve efficiency and increase profits. The other is it tells you if the employee likes the job. What's good or bad and if there are problems or misunderstandings about the job. (If you would like a free copy, send a SASE to Eagle Marketing, PO Box 271, Bozeman, MT 59771-0271.)
I am not a fan of "Employee of the Month" because you only have one winner. I would rather see you publicly recognize each employee in some way over a six-month period. You may think employees work for you but they actually have their own goals. Send the kids to college. Buy a home. Have them write their goals down and post them in the break room. Help them reach their goals by working together harder and smarter. It's called a "team." You help them reach their goals and you will reach yours.
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Based in Bozeman, MT, Tom Egelhoff is the author of How To Market, Advertise & Promote Your Business Or Service In A Small Town, and The Small Town Advertising Handbook: How To Say More And Spend Less. He is also a seminar and workshop presenter and trainer. He may be reached at 888-550-6100 or PO Box 271, Bozeman, MT 59771-0271
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