The Biggest Side Effect of a Strong Economy: Business Slop

Here’s some great news: The economy is rolling along, and all is good. But there’s one side effect of a good economy that can hurt every business: slop.

Right now, sales are growing for most businesses, opportunity is around every corner, new customers are becoming easier to acquire, and profits are going up. But we all know a strong economy doesn’t last forever. I’ve been hearing rumblings from the Wall Street pundits that we only have another 12–18 months left in this good economy. While I have no clue how long or short our boom will be, I do know one thing for sure: Tons of businesses are allowing slop to creep into their operations, and, when this economy turns, it’s only a matter of time before that slop kills them. Let me share a few examples.

Slop No. 1: Bowling Blunder

bowling ballsLast year, my team and I hit a company sales goal. As a reward, I planned to take the whole company (all 60 of us) to pizza, beer, and bowling. We called the nicest bowling center in town, but they wanted us to use their catering option. Unfortunately, that option blew the budget, so I called back and asked to reserve lanes. I was then told that wasn’t an option.

It wasn’t like I was asking for two lanes. I needed 10 lanes, and I didn’t want to simply walk in and hope they would all be available.

Since a reservation wasn’t an option, I asked if I could prepay the per-lane fee of $40 per hour. Again, the answer was no.

Then a manager told me they didn’t want to reserve the lanes because Fridays (the day we aimed to go) were sometimes busy in the summertime.

I was floored when I heard that. I asked the manager, “Are you slow some Fridays?” and he said yes. I then explained to him that I was willing to come in and prepay $800 for 10 lanes for two hours and buy pizza and beer, which would guarantee that this Friday would be busy, and that it didn’t make sense for him to not take my guaranteed money over money he hoped would come in. When his answer was still no, we took our business elsewhere.

When the pleasures of a good economy offer enough cash to pay the bills, companies feel comfortable making dumb policies and simply hoping more money will come in. This whole strategy is the definition of slop.

Slop No. 2: Wavering Water Toys

lakeAs I write this, I’m on vacation with my family at a lake resort in McCall, Idaho. It’s a small resort town two hours north of me, and it’s one of our favorite spots to get away from it all.

We knew we would want to rent Jet-Skis for the day and have fun on the lake, so I called the marina and got directed to their voicemail. Getting a business’s voicemail annoys me, but McCall is a small town, so I let it go. I left a message telling them I wanted to rent a pair of Jet-Skis for the day.

The next day, I decided to take a short walk and reserve those Jet-Skis for the next day. As I was walking, I came across another place that rented Jet-Skis. I stopped, chatted with the kid who was working there, and reserved my Jet-Skis through him. At this point, it had been 24 hours since I called the first company, and I wasn’t expecting a call back. Either way, they missed out on hundreds of dollars in sales, all due to slop.

‘Hello? Is anybody there?’

Having a person answer  the phones with good customer service skills is one of the single easiest things for any business owner to fix, and it results in massive improvement.

For my mastermind group, I brought in my phone guy, Dave Tester, to do some live calling to each mastermind attendee’s business to help them improve. The results were incredible.

When I buy or invest in a company, one of the first things I do is look into the phones and who answers them. I secret shop the person answering the phones a minimum of five times, and, if the person answering the phones just doesn’t cut it, they are typically the first to go.

I’ve found that most front desk people are full of slop, but, most of the time, it isn’t their fault.

When the economy is good, the problem of bad front desk people actually magnifies. This is why I want you to pay close attention to this aspect of your business.

‘Make new friends but keep the old.’

 

retention

Another area of slop that often gets overlooked is customer retention. When the economy is rolling and new customers are coming in daily, it can be hard to focus on keeping what you already have. But considering that an existing customer is easier to sell to and more profitable than a new customer, taking your focus off customer retention is a massive mistake. The business math is always better if you grow and have low attrition. Not to mention the fact that, when the economy turns, you’re likely to lose a few customers, so wouldn’t it be better to have more customers rather than fewer so the loss hurts less?

If, after reading this, you think slop isn’t happening in your business, think again. It happens to everyone to some degree, but, if you aren’t paying attention, it’s happening much more than you know.

Right now is the best time to fix slop. The economy is great, and fixing these areas that are costing you money is a great way to maximize profits so you can continue investing in your company, growing it, and making sure the next downturn is simply a minor annoyance to you instead of a potential business killer.

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