One of the great challenges many small businesses are facing right now is figuring out how to survive amid economic inflation, supply chain disruptions, and the labor shortage. Belts are getting tight, and it’s getting much harder to find a way to keep the doors open. One such consequence of these pressures has been so-called skimpflation, or the lowering of both service and quality. Many small businesses have little choice but to cut costs somewhere, and making those decisions is rarely easy.
No one is happy about this. As Shep Hyken describes it in his article on the subject, this situation “is causing frustration at all levels. Customers don’t like it. The leaders at these companies don’t like it either. And employees, at least the ones who are still there, often have to take the brunt of their customers’ frustrations.” Unfortunately, there are no easy solutions to be found, especially since each business will likely have to come up with their own compromises.
But skimpflation seems hardly the right answer, as Hyken contends: “I’m seeing that customer loyalty is up for grabs. In our research, we see customers demanding a great experience in exchange for their repeat business. Let them down, and they move on. The companies that still get this right are flourishing. Laggards are struggling to keep both customers and employees.”
Hyken recommends seeking cost-cutting measures that aren’t customer-facing, which admittedly is easier said than done. For example, he mentions how some businesses might be increasing pay to keep their best employees at the cost of laying off others, but this can easily backfire if those layoffs occur on the frontlines where customers are sure to notice due to longer wait times and divided attention. Another example is that of a restaurant that chooses to substitute lower quality ingredients that will inevitably impact the quality of their dishes. Discerning patrons may notice and go elsewhere.
What then? Each business has to ask itself that question, has to analyze its books to figure out where to trim that fat and save money. Perhaps there will be no perfect answer that will make everyone happy, but Hyken has this to recommend: “Gather your team and brainstorm the answer to this simple question: ‘Where can we cut costs that our customers won’t notice?’ You never know. Someone may have the perfect answer!” By making this a group activity, you will make any decisions easier on the staff, as they’ll at least have a say in it.
Where might you start? Here are a few spitball ideas for your meeting: can you negotiate better rental rate with your landlord? Can you trim utility spending in some way? What about seeking volume discounts on the supplies you use frequently? Are your employees willing to sacrifice certain office amenities (even if temporarily)? Can you rethink your products and services to make them more efficient? Are you able to perform certain duties rather than pay third parties to do them for you, like delivery?
Indeed, you have to critically analyze everything. But as you seek to balance your books, you might look at mystery shopping as an expense you can do without, that it’s something you can cut without your customers noticing. Consider, however, Hyken’s point about maintaining a great customer experience lest your customers seek the competition. Companies that double-down on offering a top-flight experience are still succeeding, so you can ill-afford to skimp out on your high standards, and time again has proven this is something you can’t self-evaluate. The good news is that mystery shops are quite affordable, and the return-on-investment means they pay for themselves in short order. Want to learn how? Reach out today, and let’s start brainstorming how to keep your business healthy and well-positioned for each new challenge that comes your way.
