How businesses can create value in difficult times
We are experiencing tough economic times in Nigeria, and many sectors of business have been brutally affected by the recession, which has naturally resulted in rising costs of goods, and consumers spending less. Now is the time when consumers want to get real value for their money, and spend it on what they regard as necessary and lasting. At the end of the short stick are the small business owners who have to adjust to rising inflation, high cost of running a business and consumers’ regressing spending habits.
The journey of an entrepreneur is an unpredictable one – satisfying and sometimes joyless. In these times, the big issues that create obstacles and impede growth such as inadequate power, security and high cost of doing business have escalated. The recession has somewhat created competition for the little resources.
However, small business owners have an opportunity to keep their businesses going. This may not result in the profits that they have gained prior to these times, but it would gain them the one thing that they need to stay afloat – consistent business. How best to accomplish consistent business than providing what consumers want – value.
What is value? In this case, it is focusing and improving on the little things that they can control; the things that they can influence, the things that do not require government intervention; improving people and their internal operations to keep them operative. It is not a guarantee for success; however, it can make a big difference.
It must be stated that the one aspect the small business owner requires no government intervention is satisfying the customer. Without customers, there is no business. Therefore, the customer is the means to create and offer value to keep businesses afloat. The benefit is the opportunity to establish lifetime value customers, who will serve as a lifeline, and whose patronage can ensure growth and stability. These are just one part of the strategy to make head way in a bad economy.
Whether or not small business owners can afford to hire staff, the following are points for reflection on how to create value that can affect customers and business sustainability.
Five-Star customer service: We associate a five-star rating as an endorsement of the level of quality service rendered by a business. The hospitality businesses, the movie businesses, among others, are one for the few sectors, known to require such rating. The financial services rating resemble grading scores +A, B etc. The point is offering value requires offering five-star customer services. If customers are going to be selective because they have a choice where they purchase goods and service, the question is: are small businesses poised to be the one that the customers stick with? Customer service is an experiential process; it’s about relationships. Small business owners should invest more on their relationships as part of offering value. Naturally people make repeated purchases owing to familiarity, comfort and convenience. A customer would rather do business with someone they feel they can relate with, than an entity where they can just purchase things. Therefore, small business owners should double down on building quality relationships.
Invest in training: Technical know-how and knowledge always need an upgrade. When an economy takes a turn for the worse, it is usual that small businesses cut back, and this may result in the loss of jobs. Regardless, a bad economy also presents opportunities. This is a time to be innovative: to seek ways to improve operations, to run leaner, and to invest in upgrading skills or acquiring new ones, or creating a new service. As the economy improves, those who have invested in these could come out on top. This is a situation whereby the cup is either viewed as half-full or half-empty. There is a good story about how to see “opportunity”. It’s about two men from two different shoe companies who visited a town in the hinterland to find opportunities to set up a factory. When they got there, they both saw people walking around barefoot. One sales man reported back that it was arid land because the people wore no shoes; the second sales man reported that because people wore no shoes, it was a great opportunity to establish a factory to make and sell shoes. Investing in training and knowledge can make us the second shoe salesman.
Get rid of bottlenecks: Technology has enabled small businesses to work faster and more efficiently. This is a chance to offer convenience and comfort. When a small business creates layers and layers of processes for customers to get products or answers, they raise barriers between them and the customers, which is the opposite of offering value.
Creatively solving problems: When customers encounter problems with products or services, they expect to get solutions from the business that they patronise. The take-back policy, or warranty after purchase, is not applied by many Nigerian businesses because the cost of a replacement may affect their bottom line. However, there must be alternative creative solutions to help customers, otherwise, they may likely move on to another business they perceive can solve their problems, even if at a higher premium, and give them value.
This is not an exhaustive list. But the point is, by offering high value to customers, constraints can spring opportunity. Small businesses can create opportunities to manage downtime and improve on it. Value is about the small details, not an elaborate showcase of goods and services. It’s about making investments in the business and the people, with an end goal in mind – attracting lifetime value customers in a downtime and beyond.
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