Change for the better?

If a business is in trouble then something has to change, but when a business is doing well you need to be careful not to rock the boat. The saying of “if it is not broken, don’t fix it” springs to mind.

We know that bad press or marketing that sends out the wrong vibes can seriously damage a company but there are many successful businesses that have a winning formula and suddenly, without any research or customer contact, they make changes that have an adverse effect on their turnover and profit.

Here are few examples:

A pub chain refurbished a busy pub. You had to book to get a table. After the fit out they changed the lay out, the menus, the format, the pricing and reduced the choices. They lost most of their clients. Instead of being busy it was like a ghost ship. The brewery stuck with it and after a year they were still not doing well. Even discount vouchers did not tempt their long standing clientele back to the fold.

For the landlord it was like starting from scratch. The atmosphere in the pub had changed, the staff were changed and most people did not like the new format or the food on offer.

A building products manufacturer decided to save money by not having any field sales people. They did this thinking they would save money and they sold product through distribution. This backfired as it gave control to the distribution networks and they were able to dictate pricing discounts to the manufacturer. It also meant that specifications went down, and the manufacturer did not have reliable intel on their markets, up and coming projects or who their main product users were any more. Also the redundant field teams joined their competitors taking their client base and insider knowledge.

It took them a while to realise what was happening and they changed their policy back to having direct representation. Clearly all the ramifications of removing the sales force had not been thought through.

A trade warehouse distributor group had a new CEO who thought to save money by reducing product lines, staff and customer benefits. The foot fall fell dramatically. Simple things like free coffee was stopped for collections, there were fewer staff but not bigger queues as the customers had gone elsewhere. Several popular lines were terminated and there seemed to be more emphasis on different product ranges which were only available on line.

Again no communication with the staff or customers to find out what effect these actions would have and whilst making these small savings the business must have lost thousands of pounds daily.

Another building products manufacturer had a new CEO who decided to replace all the senior established sales people with 20 something graduates thinking they would be enthusiastic and visit more clients and thus sell more product. What he failed to realise was that people deal with people. All the established sales teams were instantly snapped up by the competition taking three quarters of the business with them. The group never recovered from this and were taken over by a competitor.

So whilst change can be a very good thing, if it is done without research, thought and consultation then the effects can have a very negative impact and take a successful business down.