By Max Berry

A faltering economy may not seem like the ideal environment for attracting new customers. But, even when consumer confidence is low, there is plenty a small business owner can do to instill faith in his existing customers and court the attention of those looking for a business to believe in. The secret, as always, comes down to the golden rule: Be good to them and they'll be good to you.


Back To Basics
"If it's not essential to your business, don't do it," says Ed Hess, Professor of Business Administration & Batten Executive-in-Residence at the University of Virginia's Darden Graduate School of Business. "You have more leeway in the good times, more cushion for mistakes, more room to experiment."


According to Hess, when the economy takes a serious turn south, experimentation is one of the first things to which a small business owner should bid adieu. Dreaming up innovative services and marketing strategies may earn an entrepreneur big business in a time when consumers are looking for the next big thing. But when they, like you, are just struggling to get by, they'll appreciate a straightforward approach. "The closer you are to basic, fundamental needs, the better chance you've got of attracting new business," says Hess.


This strict reliance on the fundamentals-which Hess identifies as quality of product, caring customer service, and strong cash flow-is also a cautious way to proceed in unpredictable times. "Even if your business is doing well," Hess advises, "you need to operate as if the economic downturn will last a long time or might get worse before it gets better."


But beyond keeping you safe rather than sorry, returning to the fundamentals may actually reacquaint you with the most basic-and valuable-tenets of entrepreneurship. As Hess points out, "Hard times focus the mentality of a small business owner back to the fundamentals of customer service and customer acquisitions."



Target the Right Customers
The first step to attracting new customers in any economic climate is pleasing your regulars. "Get close to your regular customers," advises Hess. "Those are relationships that will pay off in the good times." Moreover, the word-of-mouth buzz you gain from them will be a huge boon in attracting new business.

Getting close to your regular customers in an economy that is tough for both of you may involve offering longer warranties and easier return policies on products, or special deals and discounts for your most valued patrons. Your customers have to bear with bad economic times just as much as you do. Let them know you're in it together by reaching out to them and making your relationship as hassle-free as possible. Show some empathy and you'll receive it in return.

Even so, when times are tough, you can't give too much away. "Certain customers you bend with," says Hess. "Others, you can't. It has to be a strategic decision, not global and across the board." Not every customer who patronizes your business should benefit from special offers or discounts. Get in touch with your most loyal customers and offer them an exclusive deal. The fact that you're remembering them in particular, rather than throwing up a sign in the window that says "Sale!" will go a long way toward building that empathy.

Target new customers just as carefully. Look at the demographics of your usual patrons and don't waste resources trying to attract an entirely different set of customers. "Small business owners need to be more tactical and focused in hard economic times," says Hess. "A manager should not use broad-based marketing. You have to think, ‘Who are my customers and who will keep spending?' It's like a rifle shot, not spraying a field."



A Silver Lining
Believe it or not, an economic downturn offers its own kind of opportunities to America's small business owners, if they know how to take advantage of them. "Now is an opportunistic time," says Hess.

While the professor stops short of positing that, disaffected by major corporations, consumers will run to the open arms of America's small business owners ("That's soap opera stuff," he says), he does see an upside to down times: "Other businesses are getting in trouble and their customers have to go somewhere."

Hess makes a compelling point. The most sustainable businesses, the ones providing the best value and customer service, will endure while others fail. And those that survive, naturally, will pick up business from those that don't. The trick is to strive toward running the kind of business that can last. "The economy is out of your control," says Hess. "Focus on what you can control and be very, very proactive."

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