MBA Tampa Bay Blog
Businesses don’t always shut down immediately when they are failing. A business failure can be painful and damaging economically and personally
There are many types of businesses but failing businesses have common characteristics.
1) Quality revenues are tanking.
2) Margins are insufficient to generate profitability.
3) Key relationships, customers, employees and vendors are strained or broken.
4) The business is worthless/liquidation value at best.
While turning around a failing business is not easy, the steps to effect a classic business turnaround are simple. There are 4 critical steps.
1) Cash flow must be immediately improved.
2) Margins and profitability must be immediately increased.
3) Key relationships must be improved.
4) Business value elements must be re- established.
Getting customer feedback is important to better understand how customers feel about your business, your products and your services. That includes listening, understanding and improving the relationship with the customer.
1) Apologize. It does not need to be profuse but it must be sincere. The assumption is always that the customer was truly disappointed and for that we should be truly sorry; Express it directly.
“I’m truly sorry.” Apologies cost nothing but they are worth nothing if they are not sincere.
2) Seek to understand their point of view of why they were disappointed, unhappy or dissatisfied. Do not try to dissuade or counter their opinion of what happened. Hear them out and recognize they have every right to not be satisfied. Do not seek to find ulterior motives in their dissatisfaction. Let them know you understand what they are communicating.
“I understand what you are saying. “
3) Allow them time to consume what you have communicated. “I am sorry and I understand what you are saying.” Do not immediately try to “fix it.” Usually some tension will be reduced by your sincere apology and your indication that you understand what they are telling you.
4) Listen, frequently at this moment the customer will tell you what they would like for you to do about the complaint if you give them time and space.
a) I want my money back.
b) I want a replacement.
c) There is nothing you can do- I am so disappointed.
d) I appreciate you taking the time to hear me out… I will be back, I will try again, I will buy something different next time etc.
5) Your next step should be clearly considered in advance- it should represent a policy or practice designed to regain your goodwill even if you have lost the customer.
a) I would like to refund your purchase price. I want you to know I appreciate you taking the time to tell us what we did wrong/how we can do better/issues we need to address, etc.
b) I want you to know our policy is to discuss a customer issue internally and donate an amount equal to the purchase price of any product or service that was not satisfactory to one of our customers. We support the local food bank/shelter/animal rescue etc. and will add the price of your purchase to our next donation. Be sure you do it.
Frequently complaints are resolved, forgotten and we move on. Resist this temptation, keep a list or journal of every complaint or and review frequently. It will energize your quest to always get better.
For performance-based solutions to small business problems affecting cash flow, business value and profitability, we can help. We don’t earn fees if we don’t perform. We Guarantee it!
Marvin Baker, EA, CVB- Small Business Consulting