By Bret Lamperes
The natural reaction in an economic downturn is to cut prices, reduce advertising, and hand out pink slips. Well, I take the opposite tack: It's far better to find ways to increase your prices, advertise more, and retain the quality workers you already have.
This approach demands a different way of thinking about the challenges that hard times represent. The first thing you need to accomplish is accept that the only real problems are idea problems. Your money problem is an idea problem. Your personnel problem is an idea problem. All problems are idea problems.
Increase you prices. While contemplating ways I might be able to charge more for our services and still let customers know they are getting the best deal, I came up with several approaches. The first: Increase rates and offer terms on your goods or service.
Putting customers on a set payment plan allows you to charge more while padding your bottom line with interest. If the need is cash flow, you can turn to a factoring outfit -- in effect selling the debt in return for immediate cash.
You can also increase your rates if you bundle your service or product with those of another outfit with the goal of making what you are offering more desirable. Find other businesses that are willing to discount their product or service for your customers in exchange for the referral. For example, a moving company could partner with a mini-storage facility, or a restaurant might want to team up with a movie theatre. The possible combinations are limited only by your imagination. Not only does this approach add value to what you sell, it also encourages customer loyalty.
It always pays to advertise. Some say, "We can't afford to spend more on advertising". Again, this is just an idea problem. When I didn't have the money to advertise our moving company, I simply instructed our workers to drive the empty trucks around town when there was nothing else to do. It worked. We were soon getting calls from people who said things like, "I see your trucks everywhere. You must be the busiest moving company around!"
One of the good things about downturns is that they are good times to grab market share. Don't let money stop you. Your rivals are cutting back, which is both a challenge and an opportunity. Come up with better ideas than your competition and seize the advantage.
Keep the best till last. I tell my employees a story about a chicken and pig. The hen tells the pig how much she respects Farmer Brown is and suggests that they do something nice for him. The chicken recommends they make a nice breakfast of bacon and eggs. This is fine for the chicken, which only has to give part of herself, but the pig has to give everything!
We all have workers who are chickens, just as we all have workers who are pigs. We need both, but it makes a lot more sense to take care of the pigs, who give it everything they've got.
The question is: How to retain workers you can't afford? As with advertising, it's an idea problem. You might find, as I did when the slow winter season began, that putting your head together with a valued employee can produce a creative solution. With one particular worker, I began by telling her how valuable she was to the business and how I didn't want to lose her. We talked it over, worked it out -- and ended up agreeing that she should take an extended, unpaid vacation. This solution suited both of us.
Sharing employees is a second way of retaining good people when business is lean. Here is how you make it work: Find another business that is hiring part-timers and share your great employee with them. I had one worker whose salary I couldn't pay. Basically, while I was looking for a $20,000-per-year person, I really liked the $36,000-per-year worker who was already on staff. So, after a little thought, I decided to split her duties between two of my companies, with each picking up half of the tab. Can you share a good employee with another business to retain strong people?
These are just a few things we have done or thought of to gain and keep momentum in times of uncertainty. I'm sure there are other innovative approaches which I would love to hear about. So forward your own ideas and solutions. When it comes to idea problems, you can never have too many solutions to choose from.
Edited by Roger Franklin