Uncertainty adds another layer of challenges and anxieties about running a business, and it has been the central feature of the business landscape beginning when the government tried to control the spread of COVID-19 by shutting down the economy.
Since then, massive deficit spending, war, and politics have continued to rattle the business environment with sustained inflation and consumer sentiment that, while edging up, is still well below pre-COVID levels.
Still, even with the cards stacked against them, small- and medium-sized businesses, including music-related enterprises, are finding ways to not only survive the shaky times but to thrive despite them.
Building strong relationships with customers is essential during economic uncertainty. Focus on providing exceptional customer service, being responsive to customer needs, and building trust and loyalty.
Success during uncertain times may involve stepping back from automated customer service and other “cost saving” measures. Getting stuck on the phone with a chatbot that doesn’t understand what you want is a surefire way to lose a customer. In the music business, personal customer service is a must. Granted, automation and technology can be used to facilitate customer service.
A bank that was enormously successful in the 1990s (before it sold its assets to a larger financial institution), modified the adage, “The customer is always right.” to say, “The customer may not always be right, but the customer is always the customer.” The new watchword acknowledges that the bank needs its customers more than they needed the bank, and emphasized the priority of working with them—even when they were wrong—to come to a satisfactory conclusion.
In this economy, take heed of that advice. The more you can accommodate and fulfill your customers’ desires, the more business you will have and the more your business will grow.
Talk with your customers. Ask them what they want and what they expect. Ask them, “How are we doing?” Personal communication shows a level of care that will have a positive impact. It also gives you some clues about their wants and needs down the road so you can position your business to keep their business and convert more prospective customers.
Realign Your Strategy to Meet New Conditions
Adding new products and services can turn a simple retail music store into a one-stop shop for musician clients. Repositioning your store as a destination may require an investment in new stock and employee training, but expanding selection and service to meet customer demand may yield significant, sustainable returns.
Another way to stay connected to your customers is through social media. Follow customers on Facebook, Instagram, and other channels, “like” and comment on their posts, add to chain discussions. Doing this not only keeps you and your business in the forefront of your customers’ minds, but your engagement also shows them they mean more to you than just a revenue source.
Waste Not, Profit More
Manage your utilities costs, and your shelf space. If slow-selling inventory takes up too much space, stop buying it and put your purchasing dollars in high-demand goods. Efficiency is another way to save money. Investigate inventory strategies such as drop shipping and just-in-time delivery. Monitor employee productivity closely and adjust hours to meet the ebb and flow of your business.
Not sure where potential waste is happening? The numbers don’t lie. When in doubt, ask your bookkeeper or accountant. They may have some insights as to where you can save money. The key action is to take a critical look at your monthly and annual expenses and see where you can reduce costs without sacrificing service.
Cutting out or reducing marketing spends during unsettled times is a slow bleed. You may initially see cost savings but you could easily lose your competitive edge and respective market share.
Still, review your marketing plan. You likely will find things that need adjusting. For example: if you send out direct mailers and historically have been getting low return on investment, then shift that spend into something that is performing—search engine marketing, for instance, to get more bang for your marketing buck.
You should be reviewing your marketing plan on a regular basis so this process won’t be as complicated as it may sound. It’s important to give the new spending time to work. A search engine optimization program, for instance, may take time to meet its mature metrics for success. Setting milestone cost-benefit performance markers will keep the program on track.
Keep in mind that by maintaining good customer service, you’re effectively “marketing” to your current client base. That way, you can focus on new customer lead generation, which should effectively help grow your business.
Also, consider co-op marketing. Work together with someone or another business that has the same audience as you but a different offering. For example: split the cost of running an ad with a guitar teacher—advertise their instruction along with the guitars you sell. You split the cost but get just as much reach as you would have had you advertised yourself. And speaking of working together.
Cash flow is king. And if you’re operating on thin margins, it might not be financially feasible to add new services or products that require substantial investment. Even if they promise healthy returns in the long run, let your budget be your guide.
One solution to consider is going into an ad-hoc partnership. For instance, if you sell instruments and want but can’t afford to add repair services to your offerings, find a qualified instrument maintenance pro. Offer that person back space in your store for his business in return for dedicate hours to serve your customers or a percentage of the revenue earned from that business. That way, you both have flexibility and you both make money when there’s money to be made.
What’s “hot” today might be “not” next month. Talk to your vendors and suppliers. Major brands research trends, develop, and produce new products accordingly. Use them as a resource—it’s in their best interest to move product based on their analysis and investment. Find out what’s coming down the pipeline. Ask if your store could receive a test model.
Talk to your customers who stay up on the trends and visit their social media accounts to see what they there are looking forward to and provide that feedback to your vendors.
Attending industry shows, conferences, workshops, and seminars is a great way to stay on top of trends. While these events are located all over the country, there are likely to be some within a comfortable traveling distance. Like marketing, not every event will provide a direct path to profit, but industry insight is undeniably invaluable to your overall growth efforts.
While there are no signs that current economic conditions will stabilize any time soon, taking action now will go a long way to helping you and your business navigate through the proverbial stormy seas ahead. Let the uncertainty be a motivator. To quote Julia Cameron, “What we focus on, we empower and enlarge. Good multiplies when focused upon. Negativity multiplies when focused upon. The choice is ours: Which do we want more of?”
If you want your business to grow, then you have your answer.