Market volatility has certainly caught everyone’s attention recently. The Dow Jones is down over 5,000 points year-to-date, purchasing power is down over 8%, and the economy shrunk 1.4% in the first quarter. Former Chair of the Federal Reserve, Ben Bernanke, as well as an alarming number of economists, are now predicting that America is headed for stagflation.
While that’s a term that gets thrown around periodically by alarmists, it’s a situation we haven’t actually seen since the 1970s. So, what is it? In short, Wikipedia defines stagflation as “a situation in which the inflation rate is high, the economic growth rate slows, and unemployment remains steadily high.” While unemployment is still in the low single digits, the fear is that supply-chain interruptions, rising energy costs, and a shallow labor pool are going to combine to shutter a lot of small businesses in the future, as well as close a number of underperforming locations for the big box stores. All of this would propel those unemployment numbers skyward. In any case, if you want to dive into the nitty gritty on this topic, Business Insider has a write-up.
So, are we actually headed for another round of stagflation? At the risk of stating the obvious, only time will tell, and so all any of us can do is try to prepare for whatever eventuality comes our way. We can’t control what’s happening in the global economy, but we can take steps in each of our little slices of the world. With that in mind, let’s take a look at some recommendations for weathering that kind of storm, as well as any other kind of economic downturn:
Cut Costs
This is a no-brainer, of course. Every business owner wants to spend less money, but figuring out where to cut back on is always a challenge. Figuring that out often means doing a top-down audit for all expenditures to try to identify what can be trimmed. Broad advice on this front ranges from reducing energy costs by shutting heating and cooling when you’re closed, to buying your building so you can head off any future rises in rent costs. A favorite strategy of ours is to concentrate on your core competencies: whatever makes your company the most money, makes your customers happiest, and excites or inspires your employees the most—do more of that. If you’re offering legacy products and services that just distracting from your core business, it’s time to make the cuts. Think about it this way: what’s worth your time, and what isn’t?
Invest in Employees
Staff development costs money, so you might be tempted to cut back on that, but the truth is that better-trained employees are just more efficient—and happier. Higher productivity saves a lot of money in the long run, and more importantly, a training program shows employees you care about their contributions to the company. And yes, mystery shopping is indeed a training program because of the constant evaluation it provides and the coaching that comes along with it. Contented employees are more likely to stick around, which means you’ll have less recruiting and new-hire training to do, saving money and frustration in the long run.
Deliver a Great Customer Experience
Speaking of constant evaluation, the whole point of a mystery shopping program is to improve the overall customer experience. This includes the customer service your employees deliver, as well as the overall perception of value for your products and services. Getting real-world feedback from average consumers is crucial for understanding what the person-on-the-street thinks of what your business is doing. Beyond this, a great customer experience simply means happier customers, which helps make for happier employees, which means greater productivity and profit.
Productivity and profit are the two best weapons against any kind of economic downturn, stagflation or otherwise. A positive work environment is the best defense against the Great Resignation. In the end, if you concentrate your energy on what you can control—rather than on what’s going on in the financial news—your business can still survive (and ultimately thrive) regardless of what happens on Wall Street.
Primed to learn more? Ready to invest in your business’s customer experience? Want to make sure your employees feel valued and appreciated? Well, what are you waiting for? Contact us today, and let’s get ahead of whatever the future has in store!
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