One of the disadvantages of living in a small resort area is that when their are changes in the economy, we see it pretty quickly.

I began to see it in November of 2007. Today gas stations charge over $4.69 a gallon (diesel is over $5.20) and that impact sweeps valley wide as the effect of disappearing tourist dollars trickles down to the resort owners and local business owners–who then choke back on their purchases.

Eventually all the other service businesses and stores in the area feel the impact.

There are some businesses that suffer while others thrive. Just what is it that makes the difference? Is it some secret spell, magic merchandising, or price war?

No, it isn’t any of those things. In addition to having a good location (which always seems to help) the secret to success is ultimately customer service and engagement.

In some cases, it also helps if you are not a “luxury” business. When people cut back they may cut out services or products they consider “extras.”

You have to give them a reason to consider you invaluable.

In a recent post on Entrepreneurs Journey, Yaro Starak wrote about “Reputation Management.” I encourage you to read it, and although I like the term, his article title really translates (at least for me) into the simple strategy of seeing the bigger picture–and valuing customers and not only their repeat business but also their referrals.

I want to share a few of my own experiences and tips of what helped keep one of my businesses afloat in troubled times.

When I first opened my business in the mountains of southern California I was met with great skepticism.

At the time I didn’t realize that many new residents (and sole proprietorships) moved or were out of business in under two years.

This made it hard for me to make inroads, but once I was in, most of my work came from referrals (third party endorsements are the best kind).

Later I discovered that the reason I was met with such resistance was that the community saw a lot of transients.

This was due to the local housing market since many people, enchanted with the location, would move into a recently purchased home and then sell it in two years and move out of town.

In other instances, people moved up without a plan (or a job) and so failed to make a living.

Finally, many well intentioned business owners thought they could make it immediately upon moving into the area.

Most new business owners really don’t understand the market up here. It breaks the mold of what works elsewhere. I found that out pretty quickly after my arrival.

However, conducting business in this area proves to be invaluable because you have to really pay attention to what matters in order to thrive–notice I did not say survive.

My first mistake was that I established an answering service prior to my move up into this area full-time. Locals would not use the line since it was not a local prefix.

Today, that has changed a little bit with the use of cell phones or cable phone connections–but only recently. After several area code changes I decided to get a number that could travel with me anywhere. If you can ever do that, I encourage you to do so.

Also, I was too professional. Many people asked if I was a franchise. Fortunately, one local filled me in. “You are too polished. Put up a few flyers and network.” Great advice and my business thrived because I took it seriously.

Now don’t get me wrong, I am not saying not to be professional–the message here is pay attention to your market. Ask those successful business pals just what you might do differently.

Recently the Barkery, a dog specialty store, made a fatal flaw upon moving into Big Bear area. After about six months of operation they are now closed.

Although the owner told me he researched the place–he failed to identify the market and didn’t do very much to make sure the business survived. (He has a few other successful stores and realized this store was not making it and so pulled out early and will probably try again elsewhere.)

Here businesses thrive on relationships but that is something that applies to all small businesses. The relationships you build with your customers and the community are crucial to survival.

The Barkery’s location was a tourist based and not one that locals frequent.

The inventory was limited–plus they opened up right across the street from a successful dog boutique. They dismissed the business as a small concession in a larger store and failed to view the floor where their competitor had a large inventory of merchandise.

PLUS the owner of the boutique worked hard at meeting locals, stayed involved in community events, and engaged other business leaders on a personal level.

The Barkery never bothered.

Now, the remaining pet businesses across town are competing for the same customers. Why are some successful while others are not?

Customer service and engagement.

Now certainly that is not the whole story…but it is a big part of it.

When I moved into the area my pet sitting and animal behavior and training business was one of several but within six months it was the premiere service. This happened for a number of reasons:

1. Phone Etiquette

All calls were returned promptly and had the option to go to a live operator instead of voice mail if desired. When I was hustling work, no call went longer than an hour before it was returned–and in most cases that delay was because I was with a client.

Tip? Return all phone calls before your competitor (or at least within 24 hours).

2. Trust

In many cases I got permission to keep the keys of all my new customers–which meant I was the person they would call over and over again. It also helped that I had 24 hour operators for emergency situations such as the one where my client’s relative was rushed to the hospital. They jumped in the car and didn’t have time to do anything but call during their drive down the mountain. I only had to confirm that their pets would be safe and cared for.

Tip? Earn the trust of your customers, clients, and colleagues.

3. Choices

Another reason was that I often gave customers/clients choices as to how to do business with me. Even though it cost me money to offer credit card services to my clients–I paid for it. Now I might have taken maybe a dozen cards in a year but it was just part of the service. They also could choose the frequent customer discount by committing to a certain amount of business with me per year. And, I also offered specials to those customers if they sent referrals that turned into customers. More importantly, I very rarely said “no” to their requests.

Tip? Ask and answer. Find out what your customer/client needs are and then find a way to deliver them.

4. Communicate

I also listened to customer needs and in the aftermath of an earthquake (6.7) where I had spent the whole day negotiating boulder filled roads and crawling through debris to locate animals–I called all the clients to reassure them and give them updates. This was above and beyond what was required.

On the flip side, in all my years of pet sitting I had one account who didn’t arrive home as expected. For some reason we did not call or dispatch someone. So, when the client called the next day to say they were home–it was a heart sinking experience for me.

Although the animals had food and water, they did not get the extra TLC we delivered. They never would have know but I admitted the error–it was not pleasant BUT in the long run that integrity and accountability is what we were known for.

Tip? Communicate with your clients regularly–and operate with integrity.

5. Go Beyond the Status Quo

In about six months of operation most of my competitors were out of business. Since I calculated how much it cost to run the business and support myself, my prices were higher than theirs. However my service excellence and follow through far exceeded any other similar businesses and catapulted us to the forefront as “the” choice.

If you are “the” choice your business will do well. As one prominent veterinarian told me about her practice (very high dollar), “It isn’t always about the price, it is about the convenience.”

Tip? Offer good value for your fees or price.

6. Network

In the past I worked with any and every pet business. In fact, for a while I refused to sell merchandise and instead sent my clients to the local pet stores for supplies–this resulted in a huge number of referrals. I also provided classes for any pet business that asked me. Although I was a member of various professional groups such as the local chamber an other professional business groups, I found other complimentary businesses to be invaluable for networking.

Tip? Network for success!

7. Be Visible

Too many people pull back and fail to be visible when finances get tough. Put your cards out, make special fliers, advertise, write a column or editorial for the local paper to drive attention to your business. I found that direct mail with coupons drove traffic to me on a consistent basis. Also, vehicle signs are a great way to attract attention and pick up new business.

Tip? Find new ways to increase the visibility of your business.

8. Do Whatever it Takes

I laughed when one of my pals told me about a local business that took back a product sold by a competitor–the result is a loyal customer that comes back every month to spend her dollars at the customer service savvy place. The simple action of taking small ticket item back created goodwill and loyalty that will generate hundreds (if not thousands) of dollars of new business for them this year.

This was interesting to me. Sadly, there are few pet businesses I feel comfortable referring to in my area today. In fact the only other behaviorist and trainers I can comfortably recommend are over an hour drive from here.

My referrals are a third party endorsement so when my clients complain to me, or have a poor customer service experience with one of my referrals, well that reflects on me and my business.

In fact, I recently quit doing business with several local businesses because they did not take action when I (and my customers) brought up issues.

When I think about who I do business with–restaurants, banking, and grocery shopping–I support those who treat me the best…essentially I vote with my dollars. You should too and your customers are no different.

Tip? Takes steps to make sure your customers vote for you with their dollars!

As for the better pet businesses in the area, all the locals know who they are. They are professional, do what they say they are going to do, deliver a good product or service, and go above and beyond what is considered “normal.”

Take a look at your business, assess it, and ask for feedback.

A recent pet product distributor told me, “I don’t care what we are doing right what I want to know is how we can improve. If there is anything you don’t like, are unhappy with, or would like to see–let me know. It is the only way we can get better and keep all our customers happy.”

Now that is dedication to customer service and engagement.

So now, valuable reader, take a minute and share any tips or hints you have on this topic by commenting below and feel free to ask any question on this topic while you are at it.