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3 Morsels for Thought in the Current Credit Crunch on Your Customers
By Dat To
“9 predictions for credit cards in 2009” is an insightful article on what will happen to your customers and any potential customers that might pass by this year. In short for credit card holders: more difficult approvals for new applicants, restrictive limits, less available credit, heavier fees to make up for loss of profit to the Card Issuers because of lowered spending trends, and extremely high interest penalties for late payments.
How will this affect your hospitality business?
Less visits from regulars, smaller average bill totals, less curious passer-bys, less adventurous menu choosing by patrons?
‘But I sell atmosphere, entertainment and alcohol, I’ll still be busy especially in bad times!’
We’ll see.
If you are a reasonable person, now more than ever, you will need to give people a better reason to come in.
What can you think of to encourage continued spending with your business? Discount for using cash? Give a free ____________ (dessert or drink?), that won’t crush the bank, and yet thank them for bringing you their business?
How about something to encourage them to bring their family and friends? Maybe you can give special discounts for Birthdays and Anniversaries? Staff appreciation night for all your employees’ friends on a slow night? Partnering with other businesses to provide value added savings or sharing of customer bases?
When times are tough, most businesses cut out their marketing because of costs and practical fears of low cash flow. It is normal to feel this way. Our negative emotions are crippling.
Despite this you cannot afford to slow down in the area of ‘How do I get more customers’ or ‘How do I get more customers like the top ones that I have?’ You have to be more aggressive and creative in your marketing in this economy. You have to turn on the faucet to full blast!
Secondly, you need to plug the leaks without drastically changing your quality and therefore changing your business model and insuring that when times are good again, that these customers will not be back.
Start checking the pricing of every type of service you use for your business. If you can shave $50 from 10 places on your monthly bills, then what would that combined savings equal in gross sales revenue? For example, let’s say that you have a 10% avg net margin, then to net $1000, you would have to sell $10 000 of product. Why give that away by not being watchful? BUT remember, cut costs not quality. If it will affect quality, then don’t touch it.
Also take personal inventory: Don’t take the ‘well deserved, stress relieving’ vacations, cut out the fat in your own personal living. Why do some financial related services for businesses do personal credit checks on you when applying even though you own a business? They figure that you’ll run your business the way that you run your personal life, so they want to focus on you. It just makes sense.
Thirdly, you must be fanatical about the maintenance of training quality, efficient performance and the delivery of exceptional service. If every competitor that surrounds you is getting hurt in the same areas, then the smart ones will be looking for ways to make massive changes. It is a shame that it takes challenging times for us to do what we should be doing to be successful regardless of the present/future economy. Have you ever frequent a place where you want to keep returning because of how amazing the service was? Now that you’re the owner, shouldn’t that be your goal to make everyone feel that way?
What are some methods that you’ve seen that businesses use to entice you to go to their establishment and spend that you thought was impressive and worked? Please share your opinions below.
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“9 predictions for credit cards in 2009”
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This intel was contributed by Dat To
Dat To
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May, 2012
2008
January, February, March, April, May, June, July, August, September, October, November, December
2009
January, February, March, April, May, June, July, August, September, October, November, December
2010
January, February, March, April, May, June, July, August, September, October, November, December
2011
January, February, March, April, May, June, July, August, September, October, November, December
2012
January, February, March, April, May
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