Where NOT to Trim Expenses in a Recession

There are cuts we can afford to make, and cuts we cannot. Do you know where that line is in your business?

Here is an example…
What does a restaurant have to offer? Good food and good ambiance (I count service in this). Any cuts in these areas are made at their peril.

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A restaurant should know better than to take a key ingredient out of a favorite dish, just to save money. Pad Thai (above) is not the same without the shrimp. It would be better for the restaurant to charge 50¢ more and give their customers a delicious dish made the right way.

Those of us who think twice before eating out want the experience to meet our expectations.

What is vital to your customers’ satisfaction?

  • The food must be reliably delicious and be served with acceptable speed.
  • The software must work.
  • The car repair must last more than 90 days.
  • The toy must withstand a 3-year-old boy.
  • Staff must answer the phone during working hours, and fill orders quickly and accurately.
  • Professional advice must be given accurately and be timely.

Recently I spoke to a physician who is a board certified radiologist. He does not skimp on equipment, technology, and personnel when many of his competitors now do. Patients get a live person every time. MRIs, CT scans, and X-rays are read, dictated, and faxed at lightning speed by an experienced radiologist. Of course, this makes it a bit tight financially, but his business is increasing dramatically and his market share has begun to make up for his higher expenses.

Another example. Los Angeles County asked residents to install “low-flow toilets.” Although many of these new toilets met government requirements of using 1.6 gallons per flush, they did not meet the customer’s primary expectation: waste removal. It is possible to win the battle and lose the war if you focus on money rather than focusing on your customer.

(By the way, if you want a low-flow toilet that works, see Terry Love’s website.)

All business owners must ask:

Are my cutbacks hurting the quality of my product or service and driving away my best customers?

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