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Original Thoughts is a series of promising new businesses ideas, highlights and approaches–whether it’s product news, market research findings, brand launches, creative design, industry happenings, hot trends, unique approaches, or entertaining developments, Zion & Zion is always keeping an eye out for innovative and entrepreneurial concepts that help us to help you, our clients.
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Spreading the pain is no way to grow a business
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Posted by Aric
on Tuesday, March 24, 2009
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in categories
Communications,
Consumer Psychology,
Customer Relationships,
Mrktng Communications,
Public Relations,
Sales and Operations
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Have you ever wondered why it seems harder, not easier, to get good service in the current down economy? It seems strange doesn't it? People are out of work, resources for hire are abundant, and revenue is scarcer for many companies. So, why isn't service better in general, instead of worse?
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Well, the answer is because companies are cutting resources and headcount. And the consequences of this is that project timelines are being lengthened. This is also compounded by the fact that many companies' employees are now motivated by the "stick of doom" instead of the "carrot of growth". Companies are asking their employees to double up on job responsibilities, and to deal with increasing amounts of stress.
The consequences of this...? Only natural, they feel pain, and the pain spreads throughout the service chain and has an impact on customers.
So, what's a company to do? Well, I can tell you what we've done. And, our results and those of our clients have been outstanding.
Remember how you got where you were, and it wasn't through poor customer service, too-thin resources and demotivated employees.
Yes, the economy may call for a business model change, but if pure scaling isn't going to work, then be selective, be more niche oriented, not less. Figure out what you're really good at. Make sure that it aligns with the current economic environment, and just plain go for it.
When recession hits, it's an opportunity. And if it isn't an opportunity for your business, then start thinking about how it can be the next time--because there's always a nex time.
If you resist the temptation to treat good times as windfalls, then in bad times, you'll have the resources to take market share, and to attract the best resources away from your competitors.
Think of it this way, when your business has a good day or a good week, you don't go out and spend all of the profits, so why view a year or two or even three, four or five any differently. It's all a balancing act.
Warren Buffett recently commented on Bloomberg that he would never go below $10B in cash, and in truth, he wouldn't even go anywhere near that figure. This is a man who takes a $100K salary a year, yet is worth billions. Who'll pay for his grandkids college, but at that point, has said, that they're on their own.
So, in summary, think in years. Build cash reserves in good times, and come to think of them as a secret weapon. Look forward to recessions and market discontinuities as opportunities to cash in some of your resources in exchange for market share, and you'll have a motivated, healthy team and company that can provide exceptional custom service in bad times and emerge even stronger.
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