In the face of economic uncertainty, Canadian small businesses focus on customer experience and employee satisfaction to manage rising costs, according to the quarterly American Express Small Business Monitor.
The report reveals small-business owners choose investing in customer and employee loyalty over short-term financial gain, with 47% agreeing they would rather reduce profitability than risk losing customers due to price increases.
Of those surveyed, only 20% were willing to reduce perks for customers, 18% were willing to reduce perks for employees and 12% were willing to reduce staff wages or benefits.
Eric Nielsen, vice-president and general manager, small business services, American Express Canada, said “Small business owners see their employees as critical to the success of their business, and their customers as the lifeblood of their franchise. We can now see even more evidence of this mind set in challenging and unstable economic times.
“Many small business owners responded by saying they would prefer to carry the financial burden of rising costs, even if it impacts their own profitability. However, the most uncertain of times can create the opportunity to be innovative and adopt new pricing strategies.”
The primary reason for not increasing prices in response to rising costs, according to 38% of respondents, was the need to stay competitive. Fifteen per cent said they wouldn’t raise prices because they believed customers wouldn’t understand or that they would lose sales.
Jennifer Harrison
Twitter: JHarrisonBIV