The Solution
Although the economy in the U.S. and elsewhere appears to be on the rebound, there continues to be a lot of focus on cost-cutting. We still hear of the occasional plant closure of round of layoffs. Every company has turned a microscope on their expenses. We fly economy class and stay in economy hotels. Companies like Tyson Foods and Honeywell have curtailed perks like on-site daycare. Customer service staffs have been cut to the bone, making hold times longer and service more cursory. Business lunches are held at cafeterias instead of bistros. Even postage stamps are now printed on cheaper paper (as those of you who may have recently tried to peel one out of the package to stick it to a letter have discovered!) According to consulting firm Towers Perrin, 60% of companies have reduced their merit pay increases by 3.5% below what they awarded last year. We're all tightening our belts in many ways we hadn't thought of five years ago.
There is a lot that is good about this introspection. There was a great deal of lavish spending in the 1990s that could not be sustained, and a lot of efficiencies that were overlooked because there was no need to be efficient when you have unlimited venture capital. Many businesses with implausible business plans or improbable chances of success were snapping up posh office space and hiring people at alarming rates. Streamlining some business practices was badly needed and is still a very smart thing to do.
While we're talking about efficiency- the most efficient way of improving your sales is to keep your current customers and get them to refer more. In How to Win Customers and Keep Them For Life, Michael Leboeuf demonstrates how, even in cold mathematical terms, it is much more efficient to concentrate on winning customers rather than winning sales. A satisfied customer is worth many sales in terms of repeat business and referrals.
New customers are much more expensive than established ones. Advertising is expensive and extremely inefficient. The market is saturated with advertising, and it's less noticed and less believable than an established relationship with a company, or a recommendation from a friend or neighbor. So the question becomes, how do you impress a current customer to the degree that they will come back for repeat sales and refer others?
Preparing a lagniappe gives the chef an opportunity to practice his creativity on something he may not be ready to put on the regular menu yet. It makes the customer feel special and well cared-for. There may not be a way to measure this in the cold numbers of staff retention, and customer satisfaction. If one chef finds his job more satisfying and therefore performs better or refrains from moving to a different job; or if one customer, impressed with the level of service, returns and brings his family or clients for another visit; the store is well rewarded for a bushel of lagniappes.
Look for ways that your business might be able to employ this principle- empower your salespeople to offer a little something extra- announced only AFTER the sale is closed so that it doesn't seem like a bribe or incentive. Send a thank-you note after a sale. Throw in an extra small accessory, or offer a free follow-up service. Give all of your people more time and resources to treat customers in a way that is unexpected. Your people will love it, (it's only human to enjoy being generous, especially with the company's money!) and so will your customers.
Conclusion
Now is an excellent time to make your company stand out with some well-placed generosity. In comparison with your competitors, it might just pay to be lavish. The French in New Orleans have a custom called the "lagniappe" or the small gift. Cajun chefs often prepare a special small dish as an appetizer or dessert. The waitstaff would deliver it with a flourish and announce "lagniappe from the chef!" There is a cost to the restaurant for following this custom, the ingredients and staff time to prepare and serve a lagniappe had to impact the budget of the restaurant, but the return on such a small investment is great.
