Business Anorexia

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It seems obvious that businesses need to take care of their customers in order to grow and prosper; however, it’s amazing how many organizations engage in “business anorexia” as their primary strategy to deal with the downturn in the economy. This describes the extreme leanness that organizations put themselves through, and that weakens their ability to compete. If continued, it creates a downward spiral that causes a business to go through these steps: 1) Rising prices and a weakened economy prompts cost-cutting measures because it provides immediate relief on the bottom line; 2) lowering costs means stretching out the resources and cutting investment for long-term growth, and possibly laying off employees; 3) this leads to a demoralized workforce that spends more time worrying about their jobs rather than focusing on the customers; 4) the organization develops an internal focus and disconnection with the customer; 5) which impacts the customer’s experience negatively and causes them to shop around for other options; 6) which reduces sales, and 7) and causes the organization to operate on paper-thin margins or at a loss; 8) which leads to further cost cutting… and so the cycle continues.

A business must understand three best practices in order to reverse this downward spiral: First, they must know what they do best or better than any other business; second, they must hire the best people who love doing what they do best; and third, they must thoroughly understand and deliver what their best customers value. The intersection of these three areas will create a significant differentiating factor for your business and cause it to become the obvious choice. Let’s look at these three dynamic aspects in more detail.

First, know what you do best – and become even better at doing it. Be creative and innovative so that you can continue to improve. Monitor your competition to know what they offer to their customers. Do some research or visit businesses similar to yours when you travel, and take notes from your visits. Sam Walton of Wal-Mart was constantly looking for better ways to do what Wal-Mart did best. He would visit his numerous stores and take notes; visit the competition and take notes, then implement the best ideas throughout the stores. It can sometimes be a mistake to expand your product or service offering too far, and thus dilute your core competence.

When you fully understand what you do best, it’s important to find and hire people who love doing what you do best. Nordstrom’s number one customer service strategy was to be meticulous about hiring the right people and then training them to sell – not hiring good salespeople and training them to be nice. You need to find people who genuinely like working and serving your customers, and who make customers feel important and valued. Nordstrom’s philosophy is to “hire the smile, train the skill.”

I’ve worked with several organizations that are very careful about who they hire. Whenever they meet someone working at another business who has great customer service skills, they will make a note about that person and if a position opens up, they will invite him or her to apply.

What do you do if you have people who don’t appear to love doing what you do best and are not good working with your customers? If you’ve tried to coach and train them to become better customer service reps, then you might need to find other work for them, possibly in a support role.

The third factor is to perhaps the most important. You have to identify your best customers and deliver what they truly value. This process requires a mental shift from being transaction-oriented to becoming more customer outcome focused. Customers don’t just buy goods and services; they buy what those products do for them, or the outcome they expect. If you can understand that outcome and exceed their expectations, then you will be able to deliver greater value to them, which will develop greater customer loyalty.

Once these three factors are operating within your business, you will be able to reverse the downward spiral and instead of cutting costs, you’ll have the additional revenue to train your staff, create greater job security and allow them to focus on your customers by providing the resources they need to fully serve them. When your customers feel like they are getting greater value from your business, it will differentiate your business from the numerous competitors who sell similar goods or services, and it will cure business anorexia by allowing you to have an organization that is well-fed from the growing sales of customers.