"The only strategy that is guaranteed to fail is not taking risks.” These words from the founder of Facebook, Mark Zuckerberg, resonate well with retail and hospitality industry. Because, in an industry that is overwhelmed by so much competition at every scale, risk taking is an important element of growing your hospitality or retail business. But it is important to cover your bases before diving into the unknown waters. And hence, if you are looking to make some profitable income, regular effort on building your sales is equally important. So, here is a list of things to consider, to get those mundane yet important things right, so that you can concentrate on innovating.


Review Customer Feedback and work on it.

  • What is your customer saying about you?
  • Do they like the product you offer?
  • Are they having a good experience with the service you provide?
  • Is there a customer favorite among the products or services you offer?
     

The response from customers helps in great measures. Even if you receive negative feedback, it is time you consider the flaws and fix it. This will grow you and your business, in greater dimensions.

From a recent survey based on interviews with 90,000 North American retail consumers, by the Toronto-based Verde Group in association with the Jay H. Baker Retailing Initiative at Wharton School, it was claimed that about 45% customers who experience problems never contact the company. “Organizations that assume no news is good news are at significant risk,” according to the report. “Rather than complain, these people spread negative word-of-mouth and then vote with their feet by making future purchases elsewhere.” On the other hand, if you work on their negative feedback promptly and give them satisfactory service, you have probably retained the customer for every and the customer will be a your brand's advocate through word of mouth.


Be flexible and Don't be adamant

Remember, failing or making mistakes in one area of business doesn’t make you worthless or any small a businessman. It would be wise to focus on products and services that give you a raise, and generate good profits. It is simply okay if the product or service you expected greatly from, is not giving you results. The wise thing to do would be to concentrate on what gives you best results. Meanwhile, try and figure out why that product did not do well and depending on the cost fix it or take the learning for the next time.


Go Mobile friendly

Your customer today looks for things first on their phone. SMS, WhatsApp and Social media channels are a great mode to be in touch with your customers. Ensure that you make your retail outlet visible on such platforms and be available on applications like Google Maps for people to find you easily.

Now that your mundane things are taken care of, here are some key factors that can help grow your retail or hospitality business:


Reduce the customer defection rate

In the retail or hospitality business, you may lose a customer for many reasons. A bad customer experience, a bad conduct with an employee, a not so satisfying ambience or simply one time shopper, the reasons of leaving can be plenty. However, there are few areas that are within the control of the business. You need to focus on retaining your customer and not losing them. Studies show that even a 5% decrease in defections can result in a 25% or greater increase in profits. Focusing and investing on retaining your present customer base is a wise decision and a great avenue paving way for business growth.


Create a new product or service for the present customers

Say for example you are in the food outlet business, and your customers love hanging out at your outlet, you can come up with a new take away lunch menu for your loyal customers. Rather than losing them to your competitor, you can continue to care for them by offering more convenience and ease. Some freebies, thank you notes can always be an icing on the cake.


Nurture and nourish the present client base


Continue to study and understand your customer. One of the ways to do that is to be your own customer. The more proactive you are in sales, the higher growth you can expect. If your customer visits you twice a week, look out at ways to make him drop by may be thrice a week. If you are into the food business, calculate what your customer’s average spend is during occasions or festivities. Look out for ways and means of increasing the customer spends. In retail & hospitality, it is all about thinking and creating a seamless customer experience across various engagement points.


Grow your business through Franchising

If starting a business has got you to a new place and changed your professional destiny, it is time to expand and grow even further. With a good business idea and solid processes in place, franchising can a great platform to grow. Numerous well known names in retail began with a business idea like yours. With a good team in place, you get to utilize other resources using Franchising. Franchising makes you release your strengths on what you do best, making you real efficient.


GM Chris Mavris, of Soul Origin says
--- “One in three small businesses fail in their first two years. But in franchising, 80 percent will still be working in that time. Because they are working off a proven financial model before they go to market. The mistakes you can make have already been made.

It is but natural for franchising to have its own share of troubles. Yet, it is a great platform to expand your retail or hospitality business and to grow exorbitantly.


Alternative funding to grow your business

If you have a restaurant or hotel or a food chain, getting finances can tend to be difficult as many traditional lenders do consider the hospitality sector as a high risk area to release funds. Traditional funding looks impossible most times. Business loans are designed to give you ultimate ease and convenience in smooth business banking. You can avail a dedicated Relationship Manager to manage your funds and guide you with the right products & services.


On the road towards success and business growth, it is often difficult to determine the key areas you need to be cautious of. These are areas you need to handle with care or they can hit back real hard.


People you hire

People hold great importance in the growth of a business. If your retail or hospitality business involves a team, then hiring the right people has to be a priority. Many a time, in order to meet the rapid growth and demands of the market, you tend to hire quantity over quality. This may ease the pressure then, but will harm you in the long run. Ensure that the backgrounds of candidates are thoroughly checked and quality people are hired.


Quality of product/service and customer happiness

As business grows, it is noticed that customer service tends to fall the mark. Even though new customers keep coming in, it is very essential to keep a tab on the existing customer base. Lack of customer service is one key factor that leads to customer dissatisfaction and results in customer retention problems.

Similar to the customer service, it is observed that the quality of the product deteriorates with time and growth of the business. Hence, it is essential to ensure the quality of the product or service you provide is up to the mark and consistent with times.


Financial status

When you are a small businessman, it is easy to manage the finances individually. But as the sales grow and the business moves upward, it becomes difficult to keep a tab on the numbers. It is advisable to have a fixed financial accountant to handle your financial records regularly, not just at tax time. Developing a good rapport with the accountant would help as he would readily point out weaknesses if any, in the business model. This will help you channelize your profits wisely and maintain your business growth.

So in your journey to gain healthy profits, ensure you have happy customers all over. Learn to upgrade your business and jump above the obstacles to achieve retail or hospitality success. Deliver a good omni-channel experience and ensure that you are ready when the customer is willing to pay.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.