Skip navigation

How to Survive an Economic Lull

When a baseball player falls into a slump, getting out is not easy. A lot of hitters are guilty of trying too hard and complicating the task. Reverting back to the basics, the swing's fundamentals, often is the best cure. While you aren't struggling to hit a curve ball, the core lesson remains the same: during an economic slump, go back to the basics.

To sustain success during hard times, keep in mind the following four strategies.

Understand your customer

Identifying what the customer wants from a dining experience, and then offering high quality for a reasonable price, could help retain and even expand your business during a recession. Take an introspective look at target clientele to determine how habits and wants shift and then tailor unique services.

Price should not be the only form of value for customers. All aspects of a restaurant's operation, from messaging to menu to offerings, should align to meet the customer's expectations. Quality products, outstanding service, a comfortable and clean environment and competitive prices are all necessary to create value and a positive experience.

Beverages always have been one of the best ways to generate profit. Still and sparkling beverages are a time-tested profit builder. A simple non-alcoholic beverage order can tack on 25 to 30 percent profit to a guest's check. Consider expanding your beverage portfolio into areas such as energy drinks, smoothies or green tea.

Product differentiation

Differentiating the product becomes crucial when battling to compete for customer dollars. Reducing advertising and marketing budgets, for example, can decreases customer recognition and awareness of the product, which may impact positive returns. Even though your customers are watching what they spend, they will not accept a diminished product in return. Partnering with a successful brand could lead to more brand recognition and trust from consumers, especially during hard times.

Effective alternatives

Coping with reduced customer traffic means strategically offering products consumers will buy. Products now in the marketplace are direct responses to these trends. Equipment innovations, for example, offer products that can be prepared in minutes, avoiding waste and labor costs. These developments add value for you and keep prices reasonable for customers.

Set the example

Nowadays many people in the industry are talking about “going green” to describe environmental initiatives. But due to reduced budgets and cash flow, green improvements could be the first casualties. Through routine improvements and simple changes, you can cut costs by saving water, decreasing utilities and reducing waste to improve the bottom line.

For example, repairing plumbing leaks, pre-soaking dirty dishes, turning off lights in areas with natural light or replacing incandescent light bulbs with compact fluorescent ones are all simple, inexpensive ways to reduce waste and increase efficiency.

Make further improvements by replacing neon signs with new energy-conserving LED ones or recycling cardboard containers instead of letting them occupy expensive dumpster space. Practicing and building these good habits can help you outlast the tough times and prosper when the economy turns.

Like a ball player mired in a slump, you have to keep swinging away. Focusing on the basics will allow you to emerge from the slowdown with better overall operations and customers that are even more satisfied than before.

As vice president of marketing, Jim Dinkins creates strategies to drive growth for Coca-Cola customers.

TAGS: Trends