A ticking time bomb has been created by government mismanagement and it’s headed straight for your small business. It’s record-high inflation, blowing up budgets worldwide. This bomb is about to detonate and take out countless American small businesses just like yours in the coming weeks.
With high inflation, consumers will once again be forced to choose between supporting local businesses or the convenience and low prices of big companies like Amazon and Walmart. As prices of gas, groceries, and other necessities skyrocket, American consumers are going to tighten up their budgets and shift their discretionary spending to paying for the price hikes (or begin racking up dangerous credit card debt, as interest rates rise).
Stay-at-home orders from the COVID-19 pandemic completely reset consumer behavior, shifting many Americans away from buying products at local businesses to buying from the big corporations.
We’re about to see the sequel. The culprit this time? Government mismanagement, leading to the highest price increases in 40 years. And consumers are being forced, yet again, to start pinching every single penny.
It’s not that people don’t want to support small businesses. It’s that the convenience of Amazon Prime’s 2-day delivery and Walmart’s low prices are seemingly irresistible, at a time when every American household is trying to stash their cash and slash their spending.
Small businesses lack the buying power of these behemoth companies. They’ve lowered their prices as much as they can, cut down on inventory, and have spent hours transitioning to an online store—all in the name of saving their business and holding onto the loyal customers they still have.
The result? All of a sudden, companies like John’s Pet Supply Shop and Carol’s Jewelry Store are forced to compete with the nearly instant delivery time of Amazon and the low prices of Walmart. But they can’t keep up, losing customers and cash.
What does that mean for your small business? Let me be clear: You can’t afford to lose business right now. You need the tools to not only survive this recession, but come out of it with a stronger customer base than you had before. It’s possible. The three steps outlined below can help you prepare and protect your most valuable income-producing asset: your local small business.
Step 1: Re-engage.
Email your customer base right now. Remind them how much you appreciate their business and making their life better. Then ask, “What is the most valuable service we provide for you?” Offer those customers a special discount, offer, or bonus to buy from you again. Use the valuable feedback from your customers to attract other new customers.
Offer your customers an incentive to refer their friends and neighbors to you. Think of your satisfied customers as your proven sales force: They’re motivated to help you grow your business and are rewarded along the way. Re-engage and remind your customers how your product or service is the solution to a problem they face.
Step 2: Re-invent.
What new services could you create to serve more customers? Has a customer ever said, “Have you ever considered selling ____?” Example: Could you offer home delivery so your customers save gas? Or offer a frequent buyer punch card? Next, incentivize your team to find ways to reduce expenses (as a bonus, they get a percentage of what they save you) and ways to increase sales (they get a percentage of the sales increase). You want to empower every employee to help you grow your business.
Let’s face it. Good employees are hard to come by and harder to keep. By incentivizing them to think creatively as if they were business owners, you’ll get everyone on the same page and working towards a common goal—not just for your business to survive, but to thrive. It’s time to re-invent and find creative ways to serve your customers.
Step 3: Reset.
Define a clear goal of new customers, customer retention, and sales goals. It’s shocking how many businesses don’t have any sales or customer goals they’re working towards—or know if they’re profitable or already in financial trouble.
You work hard to serve your customers and employees—and you can’t do that well without a rock-solid plan in place to reach more customers and make more money. How many new customers would you like to gain this year? What lofty yet achievable revenue goal could you set this year? Define your goals. Communicate them clearly to your employees. Then take action.
Big companies like Amazon and Walmart can’t offer personalized service. You can. So play to your advantage. Slip in handwritten thank you notes in your orders. Surprise and delight customers with bonus offers and email specials. Include a few pieces of Werthers’ Original Caramel Hard Candies. Make every interaction with your customers a memorable one—and they will keep coming back and refer other customers to you.
Business owners can’t control the government’s bungling of inflation. But you can follow a proven formula to create and motivate more raving customers so your business grows and not implodes.