Worst practices in business: Who DOES that?

You’ve heard of business best practices, of course. They are the subject of books, articles and seminars nearly every day.

Far less often do people talk about the all-too-common everyday worst practices that can annoy your customers and vendors, slow your progress, squander your opportunities, and eventually, lead to serious harm or failure for your small business. You may have experienced many of these either from the customer or vendor side.

But who on earth would routinely behave in ways that could have such a negative impact on their business’ short- and long-term well-being? In fact, these everyday “worst practices” are surprisingly common:

• Fail to provide project or delivery updates when your customer requests them

• Turn in projects late or incomplete

• Over-promise, then under-deliver – and deliver when it’s too late for the customer to request changes

• Cut corners in quality and refuse to make good when requested to do so (or at best make good reluctantly)

• Don’t return phone calls or respond to emails from business associates in a timely manner

• Don’t show up when you say you will; make them wait

• Forget you asked for a meeting at your office, and be out at another meeting when your guests arrive

• Take the attitude that if they want your business, vendors should be available to answer your calls 24/7, holidays, weekends and late nights included

• Argue about price, even if the price you’ve been given seems fair (you can always save a little more, right?)

• Demand that vendors rush to do your work – every time

• Then, don’t pay the vendors for a long time – and make them inquire repeatedly about payment

• Lose your vendors’ invoices – every time, if possible

• Refuse to track your time, expenses, sales, and work product, and then blame everyone around you for poor profits

• Insist that you’ve “always done it this way”

• Think of business as a “zero-sum-game” – one person wins and the other must lose

• Assume that everybody else does business just the way that you do, and that you can go on this way indefinitely

In fact, you can get away with some of this for some period of time. One day, however, your customers may wander away, your vendors fail to jump to attention, your employees bail, and your profits vanish.

Before that happens, if you have an inkling that some of this sounds just a little like you, keep this list handy, and cross off each behavior as you eliminate it from your own everyday practices.

 

Here's to the long-term relationship

Unless your business model thrives by selling once to a customer and then moving on, never to transact with that customer again, you need relationships. Some of the best of these will be long-term relationships.

A long-term business relationship with a customer or client offers several likely benefits:

-Providing repeatable or likely-to-recur income

-Comprising one part of "a customer base"

-Ideally, because you know the customer, assuring relative ease of meeting its needs

-Providing referrals, references or a good word for you

-Sometimes, offering frank feedback on how you're doing, which is a good thing

What do you provide to this long-term customer in return? Ideally, we suggest:

-Always assuring fairness in service, pricing, product and service; in some cases, the long-term customer merits priority service

-Going the extra mile to understand the customer's business and, as appropriate, to assess needs and make recommendations

-Providing referrals, reference or a good word for your customer

-Extending the occasional olive branch, if there is a conflict

We feel this issue is timely because we so frequently hear that "the business climate has changed." We hear that customers want more for less. They consider doing it in-house, doing it for less... or doing without. They price shop, deadline shop, consider off-shoring, hire their incompetent cousin to do it. They buy it cheaper, buy it used, fix the old one.

All this and more makes the good long-term business relationships you have more valuable than ever. Treasure and nurture them.

 

Navigating the arithmetic of economic recovery: A guide for mid-size businesses

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Just as there is arithmetic to recovering in the investment market, there is a logic and arithmetic involved in business recovery. Specifically, it's often easier to lose ground than it is to win it back.

In the investment market, if you lose 40% of your $10,000 investment, you have $6,000 left. When that remaining investment adds 40%, you have... $8,400. What a bother.

Similarly, a recession can create business losses that are challenging to recoup... and they aren't all strictly in the numbers.

For example, a large business customer may pull its business "temporarily" during a recession. Getting that customer buying again can be an uphill battle. Getting the customer back to or above its previous level of purchasing can be even tougher. During the customer's hiatus, it has probably been courted by your competition, with great deals, low prices and - gulp - perhaps a fresher approach.

Many businesses reduced their marketing and hence shrunk their visibility during the last difficult quarters. Now they need to regain what they've lost in terms of being "top of mind" - ramping up marketing will require serious, insightful and ongoing effort now if it's been shelved or minimal in the last year or two.

Were your engineers busily designing the next great thing during the slowdown? Great - you can come out shining. However, if the malaise meant that R&D was stalled and that even the best minds in your company were dulled by lack of sales and incentive, it's time to refresh your approach and your offerings, because your competition will or has done so already.

Has the sales team been keeping in touch with all its customers and prospects, or has it, as in the infamous sales saga of Glengarry Glen Ross been waiting for the "good leads" and better times? There is no time NOT to be selling.

Today... while the past certainly affects your firm, days gone by matter now primarily as a lesson. Starting today, you have the need and you've absorbed the arithmetic. You know that a concentrated, energetic and smart effort distinguishes the companies that will soon regain their momentum and reach new heights from those that will not. This is true even if your revenues are down, your staff is reduced and you've borrowed money. It will take more work and more applied intelligence to gain ground than it took to lose it, just as it does in the investment market.

How is your company addressing the recovery? Please comment or email us privately with your thoughts.