The unexpected can blindside even the most successful of professional businesses. Even in the busiest of times with great clients and brilliant loyal staff, unforeseen circumstances can totally shake the equilibrium to pieces.
Successful good times can seem infinite with businesses declaring they are just so busy with more work than they can handle. Or they can be relaxing in a cloud of confidence that staff tenure and performance will be ongoing.
And it’s during these ‘super cosy’ times that many SMBs take the foot off the pedal. But fallacy and complacency can bite hard. And the wounds can be particularly deep for businesses whose toes have never even touched a marketing and digital pedal in the past.
It’s acknowledged that the majority of client and staff churn is preventable with effective planning, strategies, marketing and digital analysis, processes, human care, training and due diligence. However, loss can occur through absolutely no fault of the business itself. Service capabilities, results, history and personalities can have no bearing on loss, which not only blindsides but can land with little or no forewarning.
Every business loses clients, with research indicating an average Australian client churn rate of 6-8%, with some sectors as high as 20-25%. Significantly, global statistics indicate the ratio is between 10-15%. And while data is variable, the implications are clear.
Yet what is not generally factored and shared is that a certain percentage of that churn will be of no fault of the business itself.
Such loss can result from a myriad of reasons, such as death and permanent injury, off-shoring, clients losing their own major accounts, bankruptcy, industry changes, liquidation, turnover of boards and executives, financial pressures, government legislation or divisional closures. And there are instances where fraudulent actions by companies have come under ATO or ASIC investigation, which has blindsided suppliers.
According to the Department of Jobs and Small Business, 25% of staff leave within 12 months of starting a new job. And the latest AHRI Turnover and Retention Research Report states the average staff churn rate is 18% (with a range of 37% of 26-23-year-olds to 6% of 50-year-olds and older).
I would estimate that circa 10% of the above percentages result from unforeseen circumstances and are of no direct fault of the company or staff member. It may be due to permanent injury or death (staff or family members), interstate relocation, career change, family or financial pressures or a variety of circumstances that has simply nothing to do with the business.
In my 10 years of owning a recruitment agency, I witnessed many tears being shed as staff left a business they loved working for, often due to a devastating occurrence in their personal lives.
And while there may be several weeks or months forewarning of some situations above, it can still blindside business owners and result in fear-based knee-jerk hiring.
How to survive the blindsides
We are all going to be blindsided at some stage. But you can cushion the blows and response frameworks if a platform of attraction has been built and maintained.
The first step is a mindset flip to acknowledge the best time to keep the foot on the marketing and brand pedal is during the super cosy times.
It is always easier to say ‘thank you but I don’t have the capacity right now’. Or have to scramble to replace a staff member. Knee-jerk reactions and poor decision making is rife during stressful times with a multiplying effect.
And how you communicate you are busy may harm your business in the long run. Give context as to why you are so busy with a positive message to ensure you don’t appear unapproachable and disinterested.
Client attraction tips
- LinkedIn is the largest and most effective business platform for professionals, with 10 million Australian members. So it deserves top priority to build, maintain business and personal brands and networks. Have profiles that are on brand, powerful and inspirational. Curate and share high-quality content that educates, informs and raises the business value proposition. Be consistent, purposeful and encourage your market with generosity.
- PR is defined simply as protecting, enhancing and building business and brand reputation through the media. Take a granular look at the needs of your industry, what pain points they may face in the coming months or years and position your solutions. PR is a great tool to protect your own business brand against industry reputation damage (case in point is the financial sector with the royal commission). It is not always about mainstream media exposure but a strategic plan focus. Build brand recognition, thought leadership and subject matter authority by publishing exceptional content in industry publications and association magazines.
- Step up for networking and public speaking opportunities and show up to events. While it can be tiring it is valuable when a clear and strategic focus is applied. Sponsoring events with industry support is also a great way to keep your brand top of mind, and sharpen your authority positioning with keynotes and speaking to relevant audiences.
- Focus on digital and SEO strategy by keeping the heat on Google visibility, content ranking and digital campaigns for both online and offline offerings.
Staff attraction tips
One of the biggest issues for SMBs is the talent scramble with bigger brands and organisations. Not being a sought-after employer-of-choice means SMBs must work extra hard in raising their visibility as a great workplace destination with compelling stories and social proof.
- Long before you have planned or need to hire, develop a PR strategy to showcase the great times in your workplace, the vibe of your business and positive team. Use Facebook, LinkedIn, Instagram, websites, and industry group channels —anywhere where you can to raise visibility to potential new staff that your business is a sought after workplace.
- Change your attitude to hiring and treat every candidate as a potential client. Create an interview process that is memorable and builds your employer brand for every person you meet.. They may not get the job but they will remember how you made them feel and share that to friends and others.
- Build up a bank of great conversations and industry and smart non-industry contacts. Genuine flattery and honesty is a great way to build employer awareness. Do that via LinkedIn and networking events.
- Encourage current employees to share their workplace experiences on their social media platforms and incentivise introductions.
Not every business wants to grow above current levels. But if there is any predilection to expand then keeping the foot on the pedal will not only protect the current equilibrium but provide great opportunities for organic growth.
You can help us (and help yourself)
Small and medium businesses and startups have never needed credible, independent journalism and information more than now.
That’s our job at SmartCompany: to keep you informed with the news, interviews and analysis you need to manage your way through this unprecedented crisis.
Now, there’s a way you can help us keep doing this: by becoming a SmartCompany supporter.
Even a small contribution will help us to keep doing the journalism that keeps Australia’s entrepreneurs informed.