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 Plaid Group Newsletter Join The Plaid Group mailing list and you’ll receive a free bimonthly email newsletter filled with insights and ideas you can use to enhance your company’s operational performance, spur growth, and increase bottom line profits. You Can’t Cut Your Way to Success Focus on the customer and thrive, even in a down market. by Tim Smith, Principal  [ Print Version ]These days, everyone is talking about cutting costs and spending less. Nothing wrong with that, of course – for small and mid-sized business, managing costs is always a good idea. But the business manager who cuts costs without improving how the organization generates business and delivers on its promises is like a person who goes on a crash diet weeks before a class reunion. The solution doesn’t address the fundamental issue … and the results are short-lived. In good times and bad, there are three basic things that every business must do in order to be successful:
A smart manager can turn an economic slump into a competitive advantage by leveraging competitors’ overreaction to gain market share. While your competition is scaling back their marketing and sales efforts and cutting back on service, you can step up your efforts across the board and win new customers. In addition, difficult times often “thin the herd” and eliminate weak competitors, which can lead to growth for better-managed companies. So don’t just focus on cutting costs. Get the jump on the market by maintaining a focus on No. 1 and 2 above. Here are some practical tips for helping you get customers and deliver on your promises: Uncovering profitable customers Step one – even for long-established businesses – is determining the type of customers you want and the products and services you want to provide. Spend some time with your key managers identifying the characteristics of your “ideal customer” and then create the products and services required to satisfy their needs. What do you want in a customer? What does that customer want from you? And what do you want to provide (and how)? These are some of the key questions that are often overlooked in the daily rush of business. The goal is to find customers that are a good fit for your company and its business model. The closer the fit, the more likely you are to shine. The opposite is also true. The worse the fit, the harder it is for you to be profitable because all facets of your operations become cumbersome. For example, imagine a new customer that needs a great deal of customization. That customer may look good at first, but the uncommon requirements could result in slower processing, more mistakes, higher costs and more opportunity for internal conflict … all of which can lead to a poor customer experience, lower profits and a drain on management’s time and attention. Chasing after – and winning – unprofitable business is worse than having no business at all! Once you understand the type of customers you business can best serve, you must establish a deliberate, focused sales process to find and attract that clientele. Be as careful and meticulous about how you develop business as you are in providing the product or service you sell. Here are a few tips for managing the sales process from Misty Khan, president of Advena Artemis, a Houston-based sales consulting and software firm: 
Delivering on your promises keeps customers coming back At strong companies, good performance is not left to chance. It is deliberately managed. If you boil everything down to a basic level, a company is a group of people working together to get something done. When those people are working toward the same goals and are in sync and working efficiently – using a series of integrated, dependent activities that we typically call processes – the rest of the puzzle often falls into place and success follows. If the processes by which you operate the business are not tuned up, your customers notice! During boom times, many companies adopt a “do what it takes” mentality – the mantra is “get the business in the door, give the customers what they want, and we’ll figure out how to do it the right way later.” Well, later is today! It’s easy to identify ailing processes. If you have process performance data, the best first step is to quantify the results you’re getting and compare them to the results you want. But what if you don’t quantify your company’s process performance? No problem. Talk with people around the office or shop floor and ask them what frustrates them the most when they are trying to get their work done. You’ll quickly find out what’s not working … the areas where processes break down. Your employees can also help develop solutions to those process breakdowns – they often have useful solutions to workflow “traffic jams” but are sometimes hesitant to speak up until asked. During your discussions with staff members, use process maps or flow diagrams to make workflows, relationships and problems visible. By charting how work moves through the company – a customer order, for example – you show employees their specific role, but more importantly, how their job interacts with everyone else. Once you straighten out your organization’s most pressing process breakdowns, it’s time to make certain that everyone in the company is pulling in the same direction. As a leader, one of your most vital responsibilities is to establish clear direction. You do that by ensuring your company has specific, attainable goals and the strategy for achieving them, and by making sure that all employees understand where you’re headed and how you’ll get there. A facilitated off-site work session can be an extremely effective way to set or reaffirm direction, align efforts to facilitate growth and collaborate on addressing immediate pains. The act of holding the session off-site sends a message that the direction-setting work is critical. And an off-site session is effective because it takes people away from the distractions of the work place and their normal routine, and allows them to concentrate on more than the latest crisis. It also gives participants a sense of ownership that is a powerful motivator. During that session, collaborate with managers and other key employees to establish goals and define the actions necessary to achieve them. That collaboration will produce pragmatic goals and action plans that people understand and support. Finally, your management team and employees can’t help you keep the company moving in the right direction if they don’t know what that direction is. So, if the plan is worth doing – and your vision for the company is certainly valuable – share it with everyone in the company. Learning more We’ve covered a lot of ground in this newsletter, and I’ve tried to be as succinct as possible while still including some practical ways to take full advantage of an economic slowdown. If you’d like more background on the steps and suggestions presented here, below are links to past Plaid Group newsletters in our archives that addressed these issues in more detail:
The bottom line is that the difficult market conditions offer opportunity for smart companies that are willing to invest in structuring their approach to sales and marketing and streamlining their processes to ensure that customers are being served properly. It’s not too early to start! More Information? If you’d like to learn more about gaining and serving customers during difficult times, please send an E-mail to info@plaidgroup.com, visit our web site at www.plaidgroup.com, or call us at 713-627-3569. The Plaid Group publishes a free bimonthly e-mail newsletter filled with insights and ideas you can use to enhance your company's operational performance, spur growth and increase bottom-line profits. To subscribe, change your e-mail address or unsubscribe, please visit www.plaidgroup.com/newsletters_subscribe.asp. Author's Note: Tim Smith is a Principal with The Plaid Group. The Plaid Group helps companies simplify and stabilize their business operations to improve financial performance and gain a competitive edge. Copyright 2009 The Plaid Group |
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