EVEN THOUGH THE ECONOMY IS GOOD, DON’T MAKE THESE BUSINESS MISTAKES BUSINESS HOW-TO
Great news — the economy is rolling along and all is good. Sales are growing for most businesses, opportunity is around every corner, new customers are becoming easier to acquire, and profits are going up. Gotta love a strong economy. But we all know a strong economy doesn’t last forever. I’ve been hearing the rumblings from the Wall Street pundits that we only have another 12–18 months left in this good economy. While I have no clue how long or short our boom will be, I do know one thing for sure … Tons of businesses are allowing slop to creep into their operations, and when this economy turns, it is only a matter of time until that slop kills a number of small businesses. LET ME SHARE A FEW EXAMPLES: My team and I recently hit a company sales goal. As a reward, I was going to take the whole company (all 60 of us) to pizza, beer, and bowling. We called the nicest bowling center in town, but they wanted us to use their catering option. Unfortunately, that option blew the budget, so I called back and asked to reserve lanes. I was told that wasn’t an option. It wasn’t like I was asking for two lanes. I needed 10 lanes, and I didn’t want to simply walk in and hope they would all be available. Since a reservation wasn’t an option, I asked if I could prepay the per-lane fee of $40 per hour. Again, the answer was no. I even got a manager who told me they didn’t want to reserve the lanes because Fridays in the summer were sometimes busy. I was floored when I heard that. I asked the manager, “Are you slow some Fridays?” and he replied yes. I then explained to him that I was willing to come in and prepay $800 for 10 lanes for two hours and buy pizza and beer, which would guarantee that this Friday would be busy, and that it didn’t make sense for him to not take my guaranteed money over money he hoped would come in. The answer was still no, so we took our business elsewhere.
In a good economy, a company feels comfortable making dumb policies and simply hoping more money will come in; they have enough cash today to pay the bills. All of this is slop. As I write this, I’m on vacation with my family at a lake resort in McCall, Idaho. It’s a small resort town two hours north of my city and one of our favorite spots to get away from it all. We knew we would want to rent Jet-Skis for the day and have fun on the lake, so I called the marina and got voicemail. Getting a business’s voicemail annoys me, but McCall is a small town, so I let it go. I left a message telling them I wanted to rent a pair of Jet-Skis for the day. The next day, I was near the marina and the kids were playing in the lake, so I decided to take the short walk to the marina and reserve those Jet-Skis for the next day. As I was walking, I came across another place that rented Jet-Skis. I stopped, chatted with the kid who was working there, and reserved my Jet-Skis through him. At this point, it had been 24 hours since I called the first company, and I wasn’t expecting a call back. Either way, they missed out on hundreds of dollars in sales, all due to slop. The phones may be one of the single easiest things for any business owner to fix and see massive improvements with quickly. For my mastermind group, I brought in my phone guy, Dave Tester, to do some live calling to each attendee’s business to help them improve. When I buy or invest in a company, one of the first things I do is look at the phones and who answers them. I secret shop the person answering the phones a minimum of five times, and if I can’t salvage the person answering the phones, they are typically the first to go. When the economy is good, the problem of bad front desk people actually magnifies. This is why I want you to pay close attention to this in your business.
and new customers are coming in daily, it can be hard to focus on keeping what you already have. Considering that an existing customer is easier to sell to and more profitable than a new customer — according to every study I’ve ever read on the subject, not to mention my personal experience in business — taking your focus off customer retention is a massive mistake. The business math is always better if you grow and have low attrition. Not to mention the fact that, when the economy turns, you’re likely going to lose a few customers, so wouldn’t it be better to have more customers rather than fewer so the loss hurts less? If, after reading this, you think slop isn’t happening in your business, think again. It happens to everyone to some degree, but if you aren’t paying attention, it happens so much more than you know. Right now is the best time to fix slop. The economy is great, and fixing these areas that are costing you money is a great way to maximize profits so you can continue investing in your company, continue growing it, and make sure the next downturn — whenever it hits — is simply a minor annoyance to you instead of a potential business killer.
–Shaun
Another area of slop that often gets overlooked is customer retention. When the economy is rolling
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