Creating new customers

The next six months are going to be an increasingly difficult prospect for traditional small and medium enterprises that have survived the GFC. While the mass media focuses upon the equities exchange, Parliament moves into the deficit containment sphere, smart companies will have to concentrate on what Drucker called the business of business – creating new customers.

Tom Porcelli, senior economist at RBC Capital Markets in New York says: “I think if you’re looking for signals for consumer spending or jobs, there are no positive signals here. In fairness, we’re going through a pretty tough recovery and we know that, but I think this is a reminder that the recovery’s going to be very uneven.”

Unlike Bernanke’s commitment in the US to leave rates on hold, Glenn Stevens is still pretty determined to put the choker on lending to the small business sector by raising rates in Australia. The consumers are well aware of this predilection as consumer confidence remains virtually unchanged from last month when, surprisingly, the RBA adopted a wait and see approach.

In the US, consumer confidence fell in February as consumers’ short-term outlook on jobs worsened, stoking analysts’ concerns that spending could falter and curb economic activity. Consumer confidence has sagged to a 10-month low this month on worries about jobs and fears gridlock in Washington could hinder efforts to restart employment, curbing the economic recovery. The housing market remains rickety, data showed on Tuesday, further underscoring the economy’s fragility.

Gary Morgan reports that the best indicator that Australians are still in ‘recovery mode’ is that 33% (up 1%) of Australians say that their family is ‘worse off financially’ than they were at this time last year compared to just 29% (up 1%) that say they were ‘better off’ — tellingly, this Consumer Confidence indicator has not managed an entire month in positive territory since Roy

Morgan began conducting Consumer Confidence weekly in October 2008.

Around the world we see the conservative side of politics in full blooded hunt for cuts in the level of national debt with claims that there has been a natural correction to the purported financial crisis at the same time as calling for tax cuts for small business to really take down the levels of unemployment and underemployment. On the other side of the house there is concern that the worst is not over and that there has been a shift from household debt crises into sovereign debt crises such as in Greece today.

Reflecting the Barnaby Joyce debate in Canberra, The New York Times article Judging Stimulus by Jobs Data Reveals Success points out that non-partisan economists and the politically neutral Congressional Budget Office believe the package has created or saved 1.6 to 1.8 million jobs so far, with 2.5 million expected by the time the program ends.

In this tough emerging climate it is critically important that smart companies invest in the creation of new customers and do everything possible to create a service culture that creates a platform for loyal and valued contributors to the bottom line. Only attention to market signals and closeness to consumer preferences will provide room for growth and business development this year.

Tourism Australia Chairman Rick Allert said, “You’ll have to continue to provide service and don’t lose sight of your customers and their expectations. Focus on training your people and making sure you’ve got a quality product at all times”.

Australian Chamber of Commerce and Industry’s chief executive Peter Anderson takes up this theme, saying: “Investment now in relevant workforce skills and training will also pay dividends in the longer term, as Australia emerges from the economic downturn, when we will require a new pool of skills and knowledge to drive productivity and economic growth.”

The hot tip is to remember that outstanding and memorable customer service provided by knowledgeable staff is recognised as of the major contributors to keep existing customers loyal and creating the most valuable and least cost support – satisfied advocates for your business in tough times.

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Dr Colin Benjamin is an entrepreneurship and strategic thinking sonsultant at Marshall Place Associates which offers a range of strategic thinking tools that open up a universe of new possibilities for individuals and organisations committed to applying the processes of innovation, creativity and entrepreneurship.

Email dr.colinbenjamin@marshallplace.com.au
Contact: CEO Dr Jane Shelton, Phone +61 3 9640 0099