Talk to Your Business Drivers!

How does the ‘80/20 Rule’ affect your business? What do customers like about you? What do they hate about you?

In my work with companies (especially hi-tech), one of the most common problems I see is that they develop an incredible amount of products/services/technology that either have no practical purpose or absolutely no one wants! I would venture to say that many businesses are like this because there are huge assumptions they carry into every transaction. This is a natural by-product of having any type of expertise but it’s dangerous nonetheless because you never want to be irrelevant to your customer base.

In addition to simple irrelevance, many businesses actually vilify their customer base. For instance, in many companies/organizations that have been doing their line of business for at least three years, there tends to be the thought pattern that says, “this is the way it’s always been done” or “these customers always have the same complaints/problems/excuses.” Once each of these statements is seen for what they are, there are small but significant changes that can and must be made. Think about it, unless you’re making a million dollars a day, is there any good reason to always keep doing what you’ve always been doing all these years? Even more so, if customers say the same negative things about your product/service, shouldn’t you change what you do to make sure no such complaints exist in the future? The last thing anyone in business should be doing is settling into an “us” v “them” stance with customers… they’re the ones that drive business!

So how to you stay relevant and in good relations with your customers? It’s simple… talk to them. Ask them what they like and don’t like about your company. Ask them if they know of any similar competitors out there. Ask them if they’ve ever referred someone to you. And after you’ve done that, go back and eyeball your sales for the last three years and try to see if there are any trends that you can spot. Is there a certain type of person that buys more often from you? Who are your top customers? What campaign was the most productive? Is there a time of year that business really picks-up and is there a time when it’s almost non-existent? Is there any rhyme or reason behind who and when folks do business with you?

Once you’ve done that very basic amount of research two things will have happened: 1) your customers will have heard from you in a non-sales activity which is huge in regard to building customer loyalty. 2) You will see your 20% emerge from that data. These are very important to identify for they most likely drive around 80% of your business.

Your 20% folks usually like something unique about your business (i.e. your vision, style, values, service, voice, looks, etc) so invite them to play a role in your newsletters/nurture marketing and really keep them in the loop on what you have in the works, plans for growth, etc. Since they are your top customers, build a profile based on this population and grow it! Don’t feel shy around these folks as they are already ‘sold’ on you so stay in front of them in the ways that they’ve told you are important to them as much as you can!

Seriously, do at least one thing to start surveying your customer base right now! There are tons of free e-mail tools out there but do try to fit-in a fair amount of phone calls too. If you don’t have an extensive customer base, call folks you’d like to do business with and just do some basic research on them. The most successful businesses seem to take huge risks but they really don’t as they are merely reacting to what they hear from real customers and going where customers have already told them they will buy.

 

 

Let Everyone Love You!

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When’s the last time you conversed with your existing customer base? What do they love about you? How does that affect your business decisions?

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It amazes me how many good businesses completely disregard one of their best and most obvious resources… their loyal customers! Loyal customers don’t leave you based on the latest fad or downward pricing trend. Loyal customers consistently go and tell others about your services and why everybody should actually pay more for what you provide. Loyal customers are waiting for ways to interact with your company more often because they feel like they have a stake in your success. Loyal customers try to frequent your business because they believe in it deep inside and don’t want to have to find someone else that does something similar to you, but isn’t exactly you. Loyal customers tell you what they hear on the street about your competitors. Loyal customers prove to yourself that you are one of the best in what you do. Loyal customers are a great source of innovation as they can realistically commit to your future ideas. Loyal customers maintain an insurmountable competitive advantage for you so long as you continue to respect them with hard work and relevance.

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So how do you tap into all of this great stuff? TALK TO THEM. Contacting folks regularly isn’t that hard these days with automated greeting cards, e-mail list managers, automated drip-marketing programs, free e-surveys, etc. Make sure you’re in contact with your prospective customers at least once every 3 weeks and your loyal customers at least once a month! You’ll be amazed at how much you’ll learn about your expertise, public perception of your company and ways to grow and avenues of untapped profit once you get into the habit of focusing and really listening to your customers, especially your loyal ones. The beauty of it all is that once you start to habitually listen to your customers, you’re more than half-way to consistently achieving loyalty with them because most businesses across industries ignore this simple activity.

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If none of the above can readily apply to you today, please, please, please consider revaluating your current vision, strategy and day-to-day operations to be 100% customer focused! Then you’ll only be a few steps away from achieving customer loyalty. A simple way to do this today is to go to last week’s tip ‘Lather, Rinse, Repeat.’

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You can reap the incredible benefits that stem from customer loyalty starting today!

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First, spend some time right now to identify who your most frequent customers are/have been. Do they have any similar characteristics? Who spends the most money with your company? Secondly, go ahead and devise a way to survey your actual customer base and ask them two simple questions “On a scale of 1 to 10, would you recommend us?” and then “Why/Why not?” Only 8-10 are truly loyal customers. If most of your scores are 5 and below… you’re in serious trouble and probably have very few repeat customers! Most importantly, find a way to let your most loyal customers know that you appreciate them at least once every month. It’s your job to keep them happy and to provide them with ways to show how much they love you back!

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Contact us for a free book that discusses how to achieve customer loyalty or to set-up a conversation on how you can start to build a stronger base of loyal customers by clicking here. Hey, if it was easy, every small business would be doing it habitually and successfully. I hope you find yourself in that category soon… Talk to you next week!

 

 

Equality Stinks… Win with Loyalty!

How do you get separation from your competition? How are you growing your customer base every year?

Most businesses usually respond to these two questions with “That’s easy, we have the lowest prices and the best customer service!” That’s a fair answer, but do we want to lower our prices every time some new competitor figures-out a way to low-ball our prices? (We’ll address the customer service part in a future tip of the week).

Messing with our pricing is an understandable reaction to competition but I’m convinced it’s a poor foundation upon which to build a strategy to defeat competition (1). The reason is that consumers go with pricing when all things are equal. So in essence, pricing is the last resort of a truly non-competitive business and if that’s our only way to win market share, the clock is ticking on the forthcoming demise of our businesses. Since pricing becomes a significant factor when all things are equal, it’s very important in a winning strategy to make sure all things are not equal!

By making sure our customers’ entire experience with us is second to none, we establish and grow our customer loyalty (2). Loyal customers can become a quality viral marketing sales force. They tell others about us (sometimes unsolicited). Our business pops into their head at the mere mention of our category of service/product. They know we’re invaluable to the point that they even explain (albeit sometimes irrationally) why others would be nuts not to pay more for our service/product!(3)

There’s also very compelling math to enforce a strategy built on customer loyalty. In general, if someone loves their experience with our service/product, they will tell four other people. However, if someone feels the opposite, they will go and tell twelve other people. Which would we rather have: four good referrals from a repeat customer that buys from us regardless of price or twelve potential customers that now won’t buy from us even if we offer the lowest price? Seems like a no-brainer to me.

We all have the opportunity to win loyal customers everyday, it’s just a matter of deciding to do so. Remember, when all things are equal, consumers go with price… so let’s make sure things are never equal!

What can we do to establish customer loyalty today?
First, make a decision to win a loyal customer in every interaction (i.e. on the phone, networking events, deliveries, even in collecting account receivables). Secondly, get a good feel for when and where your first point of contact is with your customers; building loyalty starts there. Most importantly, forge a strong strategy that focuses on customer loyalty as the goal instead of resorting to lowering prices in the face of competition.

Customer Loyalty Action Steps: (Put one of these into practice this week and then add another one every three weeks

Step One: Create a way to measure customer loyalty

This is very different than the traditional customer satisfaction survey. High customer satisfaction is a factor in loyalty, but it isn’t the same thing. Ask your customers a simple question, “Will you recommend our service/product to someone else?”(4) (If you want to do an e-mail survey, www.surveymonkey.com is an easy place to start). On a scale of 1-10, only 9 &10’s indicate a solid level of loyalty. 1-8’s are the ones telling twelve people to avoid you at all costs! (5)

Step Two: Identify barriers to customer loyalty

The key is to actually experience what your customers go through in their interactions with you. Another way might be to visit a competitor to see what it’s like to be a consumer in your industry. There are plenty of businesses that have started from the latter when someone said, “Man, based on what I just went through, I bet I can run this type of business better myself!”

Step Three: Find a way to reward your loyal customers
This doesn’t have to be something so magnanimous that it breaks the bank but just some sort of system that allows for you to consistently give appreciation to your repeat customers. It can be a card that keeps track of purchases, referral discounts on services, or even in a mention a newsletter, etc.

Step Four: Recruit your loyal customers
It’s helpful to simply ask your loyal customers why they initially chose you and more importantly, why they keep coming back. Just asking them these questions shows that you recognize and appreciate their consistent patronage and it provides you with possible promotion ideas and helps you solidify what should be the core of your business. These are great folks to introduce new services/products in focus groups or to approach in expansion efforts as they will be excited about your continued success.(6)

Step Five: Don’t settle for average
Make it a habitual reflex to win customer loyalty by setting an exceptionally high standard of service throughout your organization. This includes how employees (or yourself) are rewarded/promoted as well as how you grade yourself at the end of every year. For a healthy bottom-line, it really makes sense to work hard on customer retention. (7)

As always, if you need help in focusing your strategy/operations on customer loyalty, look to the various resources within our chamber (businesses, chamber staff, consultants) who can help you stockpile this valuable business resource…Talk to you next week! For more information on Better San Diego please click here.

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1. Whenever we just lower prices and lower prices and lower prices, we effectively cheapen our industry and that can’t be a good thing. We’re also really just throwing money at the problem (of losing to competition) instead of reacting to it with concrete solutions. In fact, whenever it comes down to simply throwing money at a problem; the problem is rarely ever solved and only exacerbated by the fact that we wasted money on non-solutions.
2. http://en.wikipedia.org/wiki/Customer_loyalty and for more on the benefits of customer loyalty, purchase article #3 from http://www.bettersandiego.com/BookList.htm
3. Customer loyalty can be complicated so (for a thorough analysis of it, purchase article #1 from http://www.bettersandiego.com/BookList.htm). All of us have versions of customer loyalty in our lives. Maybe it’s our favorite restaurant or drink. Or perhaps it’s our preferred brand of pancake syrup. There are tons of things that we wouldn’t even think twice about purchasing, even if we knew it cost more than an equivalent product made by someone else. The Mac users of the world are probably the best example of this… sure Macs are unique and stronger in areas, but are they really worth the big difference in price compared to a PC? This is how brand loyalty works. (Within our chamber, The Runaway Brandit company focuses its marketing services on making this a reality for any business- www.RunawayBrandit.com)
4. This is the core of article #3 from http://www.bettersandiego.com/BookList.htm
5.The 5-8’s might not be militant in their hatred of you but they tend to be huge drains on your customer service and restock/reorder systems.
6.For instance, I would’ve done almost anything to help keep the Old Spaghetti Factory open in downtown if I knew what issues they were facing and what I could have done to help. Now there’s nothing wrong with going to San Marcos for a visit but: 1) it is far and 2) that place was a downtown landmark and a favorite of the whole family (extended family even!).
7.The return on investment is much higher in customer retention efforts compared to new customer recruitment. This is largely because you don’t have to spend time finding, educating and selling that customer on the value of your business as well as the fact that 80% of your business comes from 20% of your customer base. The strongest example of this is any type of organization that relies on membership dues/monthly or annual contracts, etc. If an organization masters its retention of customers/members, then it has a strong and consistent base of operations from year to year. Plus, the retention efforts will produce a higher quality experience for each person which then makes it more likely that they will recruit/sell for that organization.

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Follow-up Like You Mean It!

How are you separating yourself from your competitors? How are you reminding potential customers that they should get back in touch with you?

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Yesterday I was in meetings most of the day and had quite a few voicemails waiting for me once I sprung free. I diligently wrote down each message as I was expecting a few important calls that day. As I was doing this, I ended-up having to replay more than half of the messages. Why? Because I couldn’t make out either the name of the person who called or the contact number that person left at the end of the message. Has this ever happened to you? Why do people do this? Did they really want me to get back to them?

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In a busy world, we take many shortcuts and often times we don’t fully realize the full ramifications of most of these shortcuts. Not enunciating your name properly and/or rushing through your contact number are two of these shortcuts that can negate the time you took to make the call in the first place. Right off the bat, rushing through these two parts of your message make it seem like your heart really wasn’t in the follow-up. And think about this, slowing down when presenting your name, company and phone number really only takes an extra few seconds… a few seconds that conveys professionalism, confidence, significance, customer care and presence of mind. Aren’t these all things you would like associated with your business?

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So today, spend an extra few seconds to make sure you pronounce your name clearly and in a friendly sort of way. This is actually worth practicing so that people over the phone feel the same warm and unforgettable sensation whenever they hear your name.
Then make sure you leave your phone number in a way that communicates that you fully expect to be called back soon. A simple trick is to give-out your numbers slowly as well pausing after each set so that the customer can write them down before you give out the next set.

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Go ahead, try it today! And as always, feel free to drop us an e-mail if you would like to position your business as one of the premier customer-friendly options within your industry. Hey, it’s not easy or else every small business would be doing it effectively and habitually… I hope you find yourself in that group soon! Talk to you next week!