Invest in Service when the Economy Gets Tough

rocket representing your business taking off in a sea of ruins representing touch economic times

When the economy takes a turn for the worse, business owners’ first instinct is to cut costs. They’ll slash prices, fire staff, and skimp on quality to try and preserve their profits.

They think they can keep profits the same even with lower revenue by reducing costs and slashing prices to increase volume.

In almost every case, they’re wrong.

It’s actually during tough economic times that investing in service is key. Here are several opportunities:

 

Attract the Value Conscious Customers who are not Bargain Hunters

People become more value conscious during tough economic times and are more likely to shop around for the best deal. Offering high quality service at a fair price is more likely to earn customer loyalty than offering the lowest prices.

This applies even if your prices are set at a “premium level.” Just be able to deliver the exceptional value. Many others thrived with this strategy during previous economic downturns.

 

Increase Customer Satisfaction and Grow your Profits 

It’s no coincidence that businesses that invest in their customer experience also tend to be more profitable than those who don’t. Satisfied customers stay longer, spend more, and refer others. Investing in customer service may seem counterintuitive, but it’s actually one of the smartest things you can do for your bottom line – even during tough economic times!

 

Increase Customer Lifetime Value

What better opportunity to build loyalty among your existing customers?

Your current customers are your bread and butter, so it’s important to keep them happy. If you can give them great service even when resources are tight, they’ll remember that and be more likely to not only stay with you but buy more from you.

 

Build your Customer Base without Expensive Advertising

Excellent service builds word-of-mouth marketing.

Happy customers tell their friends about great experiences they’ve had, and that word-of-mouth marketing is priceless. While your competitors are cutting back on advertising during a downturn, word-of-mouth can be a powerful tool for you to generate new business without spending any extra money on advertising.

 

Stand Out From the Competition.

In a recession, businesses have to fight harder than ever for market share. By investing in service and quality, you’ll make your business more attractive to the type of customers you want to attract. Those who despise poor service, appreciate your commitment to excellence and want to spend their money with you.

 

Build your Trust and Reputation

Even in a down economy, there are always people looking for businesses they can trust. By investing in service, you can show potential customers that you’re a company worth doing business with—even during tough times. You don’t cut corners.  They will remember that long after your competitors, who have taken the easy shortcuts, are long forgotten.

Invest in your Employees

Happy employees lead to happy customers. 

Where possible, instead of resorting to layoffs, look after your employees – and I don’t just mean in terms of money. Invest in services that make their lives easier – such as providing them with adequate training or providing them with the tools they need to succeed. Help ease their worries about losing their jobs, so they can focus on doing the best they can for you and your customers.

Highly motivated employees lead to highly satisfied customers. It’s a win-win situation for everyone involved!

 

So remember, when the economy takes a turn for the worse, it’s tempting for business owners to cut costs by reducing staff, skimping on quality, and slashing prices. But in most cases, this is the wrong approach—the best time to invest in service is when the economy is tough.

By doing so, you’ll stand out from the competition, build loyalty among your customer base, generate word-of-mouth marketing, attract new customers, and weather the storm better than those who cut corners and often eventually shut their doors.

So next time the economy takes a dive, don’t panic—invest in your customer experience instead.