More competition, rising costs, emphasis on reducing internal expenses, improving the customer experience: It's a roller coaster ride.

More competition, rising costs, emphasis on reducing internal expenses, improving the customer service experience: A roller coaster ride is what’s in store for 2012. I have talked with some in the flooring industry and some in completely different fields, and most are saying the same things: While there will be some bright spots, there is plenty of uncertainty for all in this historic election year.

2011 was a challenge for most, especially those not well diversified, unless they were lucky enough to be on the cusp of a boom in a specific market segment. No one I talked to was particularly happy with their growth rate or profit numbers. There was an inability to pass along increased costs due to competition. Some suffered expensive losses on projects gone bad or unexpected claims. Planned expansion didn’t materialize when budgets were cut and projects cancelled.

Look at your largest or most formidable competitor: what can you do to effectively compete, or does your analysis show that they are likely to show large losses in their quest for market share? Rate your personnel and their professionalism; how do they measure up? Will competition or other outside factors, like the political climate, ruin certain market segments for you?

What's On the Horizon?

A slowly improving economy and cautious optimism seems to be the consensus. Builders are beginning to clear off dormant land and do excavation. Heavy equipment rental companies are expanding their sales efforts and adding new equipment in anticipation of demand. There will be more employment, but salaries will remain static.

Areas to target are healthcare; property management; commercial builder and specialty commercial contractors. Federal, state and especially local government will be a tough sell unless the money has already been approved and the funding is in place. Take a look at school systems for upgrades and remodeling. There is always some money that will be spent; capital outlays are planned several years in advance.

Control those costs that you cannot pass along and emphasize profitability. This is the time to make sure you’re really going to make a profit before taking that bid. Look for the unexpected to happen; when times are tight, people do crazy things. It is much tougher to pass along those “extras.” Fewer, well-researched bids at selected targets should keep you on track for some growth.

Where will you have success? That will depend on your location and a market analysis to uncover profitable areas. How opportunistic you can be in taking market share from your competition? If you’re not the “big dog” in town – and even if you are – this is the time to be carefully aggressive. Lower your advertising costs by buying at a discount through careful timing of your purchases. Sometimes waiting until the very last minute makes good sense. Don’t forsake all traditional advertising.

So what else can you expect this year?

Rising Costs

Manufacturers have announced price adjustments due to raw materials increases they can no longer absorb. And these increases are sticking for the most part. So far, market competition has kept some of these from hitting the consumer. I believe this will change and prices will escalate. Base salaries may remain static, but medical costs and other fringe benefits will surely advance. Business expenses including travel will be higher.

One way to control your overhead is to reduce internal costs through better training. Have you ramped up your customer service training? Are you still doing follow-up surveys on jobs and, if you are, are you really listening to the feedback? Or are you just going through the motions? One national company is reducing costs by eliminating the steps their client must endure to solve a problem. Part of this is by giving their customer reps more authority to take action.

Whenever possible, use technology to help speed the process along. I don’t just mean, “Press 1, and then press 3 for the directory, 4 for more options” like some of our banks or phone companies. For a customer service hotline, have a human answer the phone. How about a simple, easy-to-find section on your website for clues to fixing problems? Or perhaps something similar to, “Jay’s Lightening Fast Solution Line - Response is Guaranteed in 2 Hours!”


Make it your friend. Expansion or renewed commitment to B2B will save money and personnel. What else can your company do when you maximize the use of smart phones, iPads, laptops and mobile tags? High-resolution digital cameras are now standard with smart phones, so there is no excuse for not snapping a picture of a problem and immediately sending it to your service guru.

That brings me to an important area that’s no fun, frequently overlooked, and always costs money and significant frustration: collections! Here is where technology can be your friend and reduce your cost. A trained, dedicated, individual with the right mindset and incentives can be invaluable. Friendly, helpful, professional, well-organized, eye for details, astute, motivated, and goal-oriented are just a few of the adjectives I’d use to describe this special person.

Hire the wrong one and you won’t collect money, and you will make enemies in the process. The right person, however, can be a treasure of immeasurable value. You might also outsource this to one of the leading professional agencies; if you do, though, consider a maintenance menu approach, rather than just calling them in when you’ve been unable to collect your old receivables; it will be cheaper in the long run.

Government Regulations

These will tend to limit your ability to prosper. There is always the fine print that takes away most of the rights you enjoy in the private sector. I once fought a losing battle to collect when work had already been performed. The government agency discovered that they “didn’t really have some $10,000 in funds” necessary for payment. It made no difference that everyone agreed that the work had been authorized and properly completed. It was after the end of the government’s fiscal year and last year’s funding could not be modified. Even if the money is there, it may be called away or “re-allocated.”

Imagine that you have spent significant time in preparation and in bidding a job, that you were the low bidder, and then come to find out the funding has been pulled and the project shelved indefinitely. You lost money there, too. Perhaps you have experienced the socialistic approach of some states that put you at an automatic percentage disadvantage on all bids unless you meet certain location, size, ownership or registration criteria. Government business can be profitable, sure, but devastating if you don’t have the eye for detail.

The first quarter of 2012 is over; the second has just begun. Going forward, consider a special focus in some area of your business, a “rally around the flag” type initiative that everyone can support. Enthusiasm and absolute determination will often spell the difference in beating out a competitor. Build a year-long sales promotion that can provide momentum throughout 2012 with rewards for everyone for their performance.

Make Your Customer Service Memorable

Whether it’s that special person with the smile in her voice or an easy-to-navigate website, be first class; think of, thought of by many to be the gold standard for an online experience. Make dealing with your company a pleasure rather than an experience to be endured. This will pay long-term dividends because it will keep your clients close. You’ll get the nod, rather than have them shopping your competition.

A roller coaster can be a lot of fun or a frightening experience if you’re unprepared. Good luck.