Success for a small business means watching your pennies. Margins are usually small, sales are often weak, and there is little or no cushion available to absorb a mistake.
It is also true that small business owners must not get so caught up in watching pennies that they miss the holes that are leaking dollars. Harry Barnes, in 1942, referenced this as “penny wise and pound foolish.” And I have discussed this idea in two previous columns, Follow the Money and Chasing Bright Shiny New Things.
Yet a recent experience suggest that you also need to consider customer perception of your efforts to minimize costs. This may sound funny but here is my story. Consider this picture.
Our refrigerator has a mechanical issue. When the service rep came out, he diagnosed the problem (we hope but that’s another story). The parts weren’t available locally s0 he ordered them to be shipped to us. He will be coming later this week to install them. What we received are the three envelopes shown along with the items you see. As near as my wife and I can tell, all three mailings came from the same location. Two came one day and the third a day later. Each envelope had postage for a pound but all the items weighed only about 7 ounces.
This may have been an effective and efficient way for the company to handle this. But to me, the customer, I’m asking “REALLY?”
Effectiveness and efficiency form part of your business image. We applaud companies that portray, through words and actions, a mission of customer service. Think of the places where you do business. This concept is probably part of why you go where you do.
I might even go further and suggest we may pay a slightly higher price for a company that demonstrates efficiency than one where we get the cheapest price but its operation is somewhat helter skelter. My rationale would be that the well organized company can probably find a way to bring their costs down while the second company may offer a bargain today but we can’t see how they will be there tomorrow when we need service or want more.
I don’t know where the balance point is between being efficient and your company’s rating on customer service. My purpose is to remind you that these concepts, efficient, effective and perception, are intertwined.
Developing an on-going sustainable business means finding that balance for your business.
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Glenn Muske is an independent expert on rural small business, working as GM Consulting – Your partner in achieving small business success. He provides consulting, and writes articles for county extension agents and newspapers across North Dakota. Previously, he was the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality.