Preserve customer relationships even in hard times

Small Business Talk

By Joyce M. Rosenberg
The Associated Press

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The recession is an opportunity for many small-business owners to strengthen relationships with customers.

Many of these opportunities grow out of adversity, for example when customers no longer can afford to pay the prices, rates or retainers they agreed to in better times.

Amy Power, who owns a Dallas-based public relations firm, had a client — a spa — that opened in October 2007, the month the stock market began its huge decline.

"They really took a hard hit," said Power, president and CEO of Power Public Relations. "They were ready to pull the plug on their PR programs."

She faced a similar situation with a dental office. So Power cut the retainers that both clients paid by two-thirds.

But Power said she also made a vow to these clients: "I will work just as hard."

"I think they appreciate that there's a certain amount of honor that goes with that kind of agreement," Power said. "I believe my firm will be better positioned for stronger relationships and better business" when the economy improves.

Ending the relationships wasn't an option. "That doesn't do either one of us any good," Power said.

Many public relations firms are making similar adjustments; marketing expenses are among the first budget lines to be cut.

Richard Dukas has had a number of clients say they need to cut the retainers they pay his firm by 50 percent or 60 percent. He's told them OK.

"The philosophy is, some revenue is better than no revenue," said Dukas, president and CEO of New York-based Dukas Public Relations.

But Dukas also has his eye on the future. "If it's a good client and we believe in

their business, then we're going to try to weather the recession with them."

He's found that being flexible can have more immediate rewards. One client cut its retainer in half but "referred us to another piece of business at a healthy retainer," Dukas said. And that new client sent two more clients his way, giving him a total of three new accounts.

Cutting retainers, rates and prices is a key way to build relationships in a recession. So is paying attention to customer needs.

Premiere Corporate, a New York-based company that puts together travel packages to sporting events, saw business slowing last fall as the credit crisis took hold and the stock market collapsed.

Clients cut back their budgets for discretionary travel. Some just stopped calling.

Executive Vice President Robert Tuchman made sure he kept in touch with all his clients.

"You can't say, 'This guy doesn't have money, I'll call him in eight months,' " Tuchman said.

"We really went and bent over backward to find ways to make things work within people's budgets."