If you recently started a business, are thinking about starting one, or you’re unhappy with the success you’re seeing, then you may wonder what you can do to help ensure business success and see it now before your business faces closure. There are many tactics you can use to help your business succeed in the long run. Some offer the potential to deliver business success in the short run but most deliver high returns only in the long run. You need to build a marketing plan containing a mixture of short-term and long-term tactics to ensure your business succeeds.
Tactics that deliver business success in the short run
Sure, you can implement plans that deliver business success in the short run. Be careful because some of these can hurt your business and its growth in the long run so you should only use them when facing a critical situation that should correct itself over time. For instance, reducing your costs is a time-honored means to help your business over a hump. In the long run, these cost savings might cripple your business. Below, I show some of the downsides associated with cutting costs.
Eliminating employees to reduce your payroll can mean slowdowns that create customer dissatisfaction. If you don’t have sufficient staffing to meet customer needs, over time you start losing customers and garnering poor reviews that turn away potential customers, resulting in reduced profits.
Layoffs, missed bonus distribution, or overwork due to poor staffing result in poor employee satisfaction that leads to a series of negative consequences such as absenteeism, loss of your best employees, and poor performance. Layoffs might also impact your ability to attract the best workers once things turn around and you start hiring again.
Reduce operating costs
Again, you may “cut off your nose to spite your face” when you reduce operating costs. For instance, substituting lower-quality inputs inevitably affects your outputs resulting in customer dissatisfaction. The old adage that says, “You can’t make a silk purse out of a sow’s ear” is accurate. Moving to a less expensive physical space might also result in lower profits as location is a big factor in business success.
Below is a graphic displaying the notion of trade-offs and opportunity costs. This depicts the concept from the consumer’s point of view, but the same concept works in business decision-making.
Reduce costs the right way
Of course, there is a right way to reduce costs. For instance:
- Tighten up so your business doesn’t waste as much of the money it spends.
- Paying invoices within 10 days saves money without negative consequences as most vendors offer a discount for businesses that pay quickly.
- Use inventory management tactics to reduce unsold finished goods and ensure raw materials arrive as needed rather than stockpiling them. Software such as EDI (electronic data interchange) helps maximize this cost savings without a negative impact.
- Find ways to reuse waste materials. For instance, a brewery might sell the mash left over after fermenting beer as feed for animals.
- Implement zero-defect processes so you catch products you might reject early in the production process to avoid waste.
- Manage cash flow to reduce your need for borrowing and save interest costs.
Create business success in the long run
Most business strategies take some time before you see the positive results that lead to business success. Here are a few tactics you should add to your business’s strategic plan to build for the future success of your business.
Invest in the right people
One of the best things you can do for your business is to hire the right people. If you get this step wrong from the get-go, then you could end up with a high employee churn rate, poor customer satisfaction, higher staffing costs, and poor productivity.
Hiring the right people means spending more time hiring new staff, ensuring your benefit package is competitive, and training new hires. It also means managing your staff in a way that gets the most from the great employees you hire.
Unfortunately, a high employee churn rate or another outcome from hiring the wrong people could spell the end of your business if you can’t recover from it quickly. Hiring the right people from the start means you will get all your tasks and jobs done in a timely manner with no issues. It might help to use a recruitment agency to get you the right people.
Respond to customers
If you want to create an exemplary business reputation and succeed in the long run then it all comes down to your customers. You need a growing list of customers who find the benefits of your products to continue buying from you and bring in new customers. Therefore you need to try really hard to get them through the door and keep them coming back for more, which comes down to how you make them feel when they are using your business and any services you offer.
Responding to customers quickly matters as it reduces the frustration or anger they feel at being let down. It also reduces the negative impact that word-of-mouth has on your performance as dissatisfied customers spread their negative experiences. On social media, that word-of-mouth can sink your business fast.
If you have a review page then you might find it extremely useful to reply to all queries as fast as possible. For instance, installing a well-trained chatbot that sits on your site to address concerns 24/7 can head off problems before they become crippling. A good listening post on social media also helps ferret out complaints so you can address them before they spread like a disease. In all cases, you want to make customers whole in responding to their complaints, so you need to find out what will do that for each individual customer. For instance, I once found my hotel was overbooked and didn’t have a room for me. They made arrangements for me at another hotel that was less convenient. In compensation, they comped my room. However, my company was paying for the room so I experienced the inconvenience without any benefit.
Knowing how to manage your customer relations comes with practice, you could use a company to help you navigate this in the beginning. Take a look at something like expert Zoho consultants to put you ahead of the game.
Think about your location
Something else you need to think about is where your business is located. If you are an online business then you might want to spend more time working on your SEO keywords, to help your target market find you more easily. If you have a physical business that customers can pop into, consider locational benefits such as nearby retail and entertainment options, parking, lighting so customers feel safe, and an attractive store environment.
If you are on the main street then people can more easily learn about you as they go about their other errands. While a less advantageous location might save you some money people won’t know you are there unless they look online for something specific and come across your location.
Marketing is king
Finally, if you don’t invest the right amount of money into marketing then you won’t see any returns. Marketing isn’t something nice to have, it’s essential, especially when you open a new business. This is one of the areas that should take a significant amount of your startup money, without it you won’t be able to market your brand to customers. This means they won’t know you exist and therefore you won’t make any profits. There are so many techniques out there that you might want to use for your business. For instance, email marketing or social media marketing. These are two great options when it comes to getting a high amount of customers and clients on board.
Below are some guidelines as to normal marketing budgets as a percentage of your overall budget based on your industry.
As you can see, you have various options when it comes to ensuring business success. Try a mixture of long-run tactics and a few short-run ones that don’t destroy your business. Save the most serious of the short-run tactics for when you face a serious financial challenge rather than as a first choice for saving money.
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Hausman and Associates, the publisher of MKT Maven, is a full-service marketing agency operating at the intersection of marketing and digital media. Check out our full range of services.