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When the Going Gets Tough ...
1 Nov, 2008 By: Harvey Goldglantz Pest Management Professional Earlier this year (PMP June, pg. 52), I wrote the column "Dealing with the 'R' Word." In it, I eluded that we were either teetering on or already in a recession. If you were a non-believer then, I feel confident you've come to that realization by now.
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It's only been five months since I penned that column, and the economy has gone from bad to worse. Banks (WaMu), brokerage houses (Lehman Brothers), insurance companies (AIG) and financial behemoths (Fannie May and Freddie Mac) have tanked. Iconic institutions, such as Wachovia Bank have had to be rescued from the brink and it's far from over.
People are afraid. The middle class has collided head-on with Wall Street, and the fallout on Main Street isn't pretty. Lamentations of distrust have become the mantra of the common man: Distrust of government, financial institutions and particularly of big business.
So what does this mean for you and your business? That depends on how prepared you are to deal with the fallout from this mess.
Even during the Great Depression, there were entrepreneurs able to make money. You will gain confidence and control of your business through the lessons learned about strategic planning and targeted budgeting.
Fact: New customers will be more difficult to attract in the immediate future.
Fact: There will be greater competition for less discretionary income.
Fact: Customers will be less tolerant of service/communication failures.
Fact: Customer attrition rates increase during economic downturns.
Fact: There will always be a need for pest management
Fact: During economic downturns — the value-delivery system becomes more scrutinized.
Fact: Customers become focused on "discretionary" spending during depressed economies.
Fact: Companies that excel at delivering a higher level of perceived value will command a larger share of their business segment pie.
Protecting Your Base
Since new dollars are hard and more expensive to come by in depressed economies, it makes sense to protect as much of your existing customer base as possible.
Here are some tips to help you shore up your base:
- Call every customer after each visit and thank them for their business
- Send a thank you card after the initial visit
- Reward staff for performing superior service
- Make certain supervisors perform ride-a-long quality control audits regularly.
Competing for New Customers
To maximize effectiveness at attracting new customers, it's imperative employees are able to differentiate your company from your competitors. To my amazement (and soon to be yours) it's been my experience that few companies are adept at this. Don't believe me? Then try this simple test.
Pick a technician and ask him why a customer should choose your company over a competitor. Chances are that you will get one of the following answers: "We deliver better service;" "We are more knowledgeable;" "We are more experienced;" or "We've been in business longer." These are the same answers your competitor's employees will give. There are hardly differentiation points.
When differentiation points fail to deliver perceived value, price becomes the central focus. Service differentiation becomes even more critical during depressed economies when the disbursement of discretionary income becomes a focal point.
That's not what will allow your business to succeed — but it's up to you to understand what's necessary to help your business succeed in this tough economy.
You can reach Goldglantz, president of Elkins Park, Pa.-based Pest Control Marketing Co., at 215-782-1150 or e-mail him at
hgpcmcinc@aol.com.
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