Operationalizing1. Institute training programs, both managerial and low-level staff.
2. Compensation - alter managerial compensation to include measures of transaction volume, market share, customer satisfaction, and staff training.
3. Pricing – maintain price-points if possible; cut margins on cash-cows, especially if perceived as discretionary purchases; lower price-points on specials, especially fads. Avoid price wars – no-one wins.
4. Product - allow more purchases of items at local levels; localize product lines; search for special purchases from suppliers; do data mining to determine concordances; substitute product lines; but only if perceived as equal or better value. For low-end retailers, deepen lines upward in price-point. For high-end retailers, deepen the product line to lower overall price-points, but retain quality levels. For mass retailers, decrease product-line depth and increase breadth. Use ideas from staff to improve product lines (data mining will not accomplish this), but be sure to visibly reward contributions from staff.
5. Supply - develop multiple supply channels; establish relationships with on-shore suppliers (promote this aspect), or better, local suppliers; establish long-term contractual alliances with suppliers. |
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Invest in your customers. First – hold the line on prices. Customers will become more price-aware, and more price-sensitive, as the recession progresses. They will rebel if they see unreasonable price increases. (Witness the reaction of TD Bank customer when presented with an unreasonable service charge on lines of credit.) Customers view gasoline prices as a proxy for transportation costs, and believe that general costs should decrease in line with their incomes.
Second - consider extending credit to your regular customers for durable goods. It will enhance sales (if not profits) and generate loyalty. Higher rates of risk must be accepted, but will be offset in the long-run by customer retention.
Third – retain adequate staff to provide optimum customer service. |
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