Every business strives to do better. Increasing sales, reducing costs, and gaining market are just a few of the standards companies use to gauge their success. The problem is that using these standards as measures of success can sometimes lead to shortsighted decisions that do more harm than good. So here are five performance standards that could be hurting your business – if used as key influencers.
- Time and efficiency. Many companies measure the effectiveness of customer interactions by time. Speaking to more customers in less time is the goal. This is especially true when it comes to customer service departments. Instead, train your staff to make sure every question is answered and problem solved, regardless of how long it takes. In the long run customer satisfaction will increase while repeat calls will drop.
- Queues and wait times. Some businesses such as restaurants or nightclubs welcome and even encourage long lines, believing it makes the establishment appear more enticing to those passing by. The problem is that those forced to stand in long lines will be unhappy customers before they’ve even made a purchase, reducing their chance of returning. Instead focus on creating a great experience as soon as they arrive. That may mean shorter lines or finding a way to turn waiting into a positive experience in itself.
- Cutting costs. When times are tough, the first expenditures to get cut are usually marketing, followed by customer service. However studies have shown that companies who maintain their investment in these areas often see less of a sales drop than their competitors who chose to reduce spending. These companies also experienced faster recoveries when the market picked up.
- Your competition. Many business owners view success as a race. For them to win, their competitors must lose. The fact is that the only thing they should be trying to win is the hearts and minds of their customers. Worry less about the competition. Focus instead on putting energy and resources into providing great products, backed by awesome customer service. Doing that will be the best way to force your competitors to play catch-up.
- Attracting more customers. Many businesses will regularly offer aggressive promotions for new customers – think phone companies and health clubs, but totally forget their current customers. According to the Harvard Business Review, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one. So while exclusive promotions for new customers are fine, it’s even more important to reward the loyalty of current ones.
Marc Gordon is a recognized marketing expert. He regularly appears on TV and radio. His articles appear in over 200 publications worldwide. Visit marcgordon.ca or his online show at marctv.net for more business tips.