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Performance & Growth

Dealing with Difficult Customers

Dealing with customers is an art-form. Here’s how you can be an artist.

Dr. Thommie Burger

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The importance of knowing how to deal with difficult customers during the infant years of your new start-up company can’t be overstated. Being equipped with this knowledge and interpersonalskills can assist in ensuring your company’s long-term survival. As cited by Dr David Freemantle, “To create a relationship and therefore a likeable connection with a customer, physical energy is required”.

I would like to introduce you to five customers you have either encountered in the past or will encounter as soon as you open your company’s doors for business.  They are mean!  They are arrogant!  You will require a great deal of physical, mental and emotional energy!  They are your customers! But are they always right?  You decide…

1. Mr Dictatorial Derrick and his girlfriend, Mrs Pompous Priscilla

Derrick and Priscilla are demanding for a number of reasons.  Let’s first take a look at Derrick.  His domineering behaviour is part of his personality.  It may also be his reaction due to a past bad service experience.  Overbearing customers such as Derrick feel the need to be or stay in control and often, such customers are insecure.

How to handle him…

Be professional, don’t raise your voice or fight fire with fire by retaliating verbally.  You are not a child and don’t have to resort to name-calling or shoving matches.  Unfortunately, some adults like Derrick miss their childhood years so much that they regress to childish behaviour.  Demonstrate respect but remain firm and most importantly, calm.  So, even though you may have a vision of lying on a beach somewhere far away like Mauritius where you don’t have to listen to Derrick carrying on and on, aim to work positively towards the resolution of the problem.  Remember to focus on his needs by trying to look past the aggressive behaviour.

Now, let’s take a look at Priscilla.  Unfortunately in life, some people seem to go out of their way to get attention or to be offensive.  She may seem poised and self-assured on the outside, but believe me, she is insecure and defensive.   Priscilla will raise her voice, demand to speak to the manager, use profane language, ignore what you say, attack you personally and like her boyfriend Derrick, go out of her way to be offensive and remain in control.

How to handle her…

If you are anything like me you may want to ask Priscilla whether she forgot to take her “chill pill” this morning.  Fight the urge to say that!  Remain professional and whatever you do, don’t exhibit the same inappropriate behaviour although you may feel the situation warrants it.  Don’t retaliate as you will only pour oil on the fire and embarrass Priscilla, which is the last thing you want.  Remain calm and focus on the problem at hand.  Remember, the reason for her inappropriate behaviour is probably due to some past mediocre service experience she had.  See if you can provide her with an exceptional experience through mending this bad situation.

2. Mrs Chatty Christine

Ever met Christine?  She would phone or meet with you and spend excessive amounts of time discussing immaterial matters such as the grooming of her dog, the weather, her family, her accomplishments, other customer service experiences and what she had for breakfast.

How to handle her…

Refrain from falling into the trap of becoming talkative yourself.  Try to remain warm and amiable but focused.  Appreciate the fact that Christine has an expressive personality and predominantly her natural inclination is to connect with people.  She probably draws her motivation from social encounters and in my opinion, may be the life of the party in less formal social gatherings.  Remain friendly by acknowledging her comments as you continue the conversation to establishing her real needs.  Asking specific open-ended questions and using close-ended questions will assist you in determining her requirements and give the conversation direction.  Remember that she is not your only customer and that your own personal time management is vital.  Keep in mind that you should be diplomatic but to the point.

3. Mr Expectancy Edward

You may know Edward as Uninterested Uma.  They want as little involvement as possible with as little effort on their part… but they expect results.  Both Edward and Uma are uninterested but expect things to get done with very little or no involvement from their side.  They will very seldom provide requested information and will often ask you to complete tasks that are either outside your area of expertise or not within the allowed price they’ve paid.  Edward and Uma’s most favourite excuse is that they don’t have time.  Phrases such as “I paid you for this so I expect it to be done” and “If I knew I had to do all this work myself I wouldn’t have hired you to do it”.

How to handle them…

This is where it gets tricky.  As a service provider, you need to get pushy with Edward and Uma.  Get used to calling and emailing them repeatedly.  Make sure you are transparent about your costs and although you like it not, becoming a nagging supplier is inevitable.  Focus on the facts and explaining the importance of the customer’s involvement in ensuring the success of your service delivery.

4. Mr Know-it-All Newton

Probably one of the most difficult customers to deal with is Newton.  Even though he approached you, he always knows better.  Newton will tell you about his knowledge, experience, accomplishments and why he is the best thing since sliced bread.  He has a very specific idea about what he wants and he has very little interest in your thoughts and your experience as the service provider.  Beware!  Newton has pre-conceived ideas and expectations.  Tread carefully when dealing with Newton because chances are that you will never meet his expectations.

How to handle him…

Some service providers are happy to do exactly what Newton wants no matter what they feel or think of it or whether it is the best thing to do.  If you feel you have an ethical responsibility to point out the pitfalls in Newton’s expectations, you are most probably heading for some degree of conflict.  Newton secretly believes that he could do your job much better and that you have little or no specialist knowledge you can convey.   In some instances, if you agree to do it Newton’s way, he may very well turn around feeling very unhappy about the fact that he had to do all the work himself.  Be very careful to commit to Newton’s expectations and way of doing things.  Be explicit and clear about what you can do, what expertise you can offer and what will be included in the service.  Set the correct expectations before doing the work.  Under promise and over deliver!

5. Mr Wheeler-Dealer Wesley

Wesley doesn’t believe in the price you see is the price you pay.  Phrases like “I’m sure you can sharpen your pencil a bit more,” “how negotiable are you” and “your competitor quoted me 40% less,” is common when dealing with Wesley.  He believes that your first price is just an invitation to start the negotiations.  They like the “buy 1 get 4 free” scenario.  But remember!  If you cut on price you can’t cut on the quality of the service delivery.  Wesley will still expect the same high quality service.

How to handle him…

Firstly, consider the following:

  • Do you want to get involved in price wars?
  • Do you want to be known as the cheapest service provider or rather the service provider with the finest all round service delivery?
  • Can you justify your pricing if you charge a premium for your value-added services and expertise?

The best way to deal with this type of customer is to focus on the facts and reasons for your pricing.  Focus on your sales ability and convincing Wesley that your service has various value added benefits that he won’t find anywhere else.  Never badmouth your competitors by focusing on their flaws and your subjective and/or negative opinion of why they are cheaper.  This is not good business ethics.

Focus on what YOU can offer.  Provide examples and testimonials of past satisfied clients.  Highlight the fact that you offer an exemplary service.  But remember; don’t promise or claim something that you can’t deliver on.  If you fail, Wesley may very well come to haunt you!

Dealing with different customers and different personalities can be very challenging.  But you decide… Is the customer always right? Perhaps not, but saying that to him or her won’t necessarily be the right thing to do.  Your ability to dealing effectively with such conflict and difficult situations will in most cases win you the loyalty of these customers.

Remember, always give your customer quality at the point of contact; in the event of encountering an unhappy customer, use bad experience recovery as your key strategy to turn the situation around to your benefit.  Bad experience recovery is vital!

Founder of JTB Consulting, a leading Business Plan Consultancy that provides practical, unique and affordable Business Consulting and Business Plan Solutions to entrepreneurs, start-up businesses and existing companies. Founder of Animazing, a Marketing Agency that designs unique animated videos; a communication and marketing medium clients use to deliver their messages in an effective, engaging and memorable way. Thommie is a Summa Cum Laude MBA Graduate and holds a PhD in Entrepreneurship and Business Management.

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Performance & Growth

Why You Should Do Things That Won’t Scale In Your Early Start-Up Days

Unless you want to be a small-business owner with a lifestyle business, you’re probably looking for an idea that scales – something that allows you to 10x your customers and profits in record time – but how do you accomplish this? Here’s some counterintuitive advice.

GG van Rooyen

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In the early days of Airbnb, when the site had just a handful of hosts in its website, the founders of the company did something surprising: They offered to have the accommodation hosts were offering professionally photographed for free. As they didn’t have the money to actually pay professional photographers, they did this themselves. They showed up, introduced themselves and took some pictures.

In the world of Silicon Valley, this seemed absurd. Silicon Valley is all about scaling. You want an idea that’s easy to expand exponentially. For instance, the marginal cost of adding a single user to Facebook or Dropbox is small, which makes these companies extremely scalable.

Service businesses, meanwhile, are typically not very scalable, since they are limited by the time and energy you can physically put in. Every new client brings more complexity and demands more time and resources.

Related: Has Your Business Stopped Growing? Here’s How To Turn Things Around

With their free photography, the Airbnb founders had turned an Internet start-up into a service business. There was no way you could scale this kind of behaviour, so, according to the dominant Silicon Valley philosophy, this was not worth doing. If this was what was required to sign up people on Airbnb, it could never be a success.

The manual approach

So, why did the founders do it? Because Paul Graham at the famous Silicon Valley incubator Y Combinator suggested that they do it.

Y Combinator has funded many, many successful start-ups (including Airbnb and Dropbox), and one of its most common pieces of advice to new start-ups is to do things that don’t scale. Recruiting users manually is not a failure or proof that your concept won’t scale. Most of the time, it’s simply a necessity.

“The most common unscalable thing founders have to do at the start is to recruit users manually. Nearly all start-ups have to. You can’t wait for users to come to you. You have to go out and get them,” says Graham.

“This can’t be how the big, famous start-ups got started, they think. The mistake they make is to underestimate the power of compound growth. We encourage every start-up to measure their progress by a weekly growth rate. If you have 100 users, you need to get ten more next week to grow 10% a week. And while 110 may not seem much better than 100, if you keep growing at 10% a week you’ll be surprised how big the numbers get. After a year, you’ll have 14 000 users, and after two years you’ll have two million.”

Surprise and delight

Another reason, according to Graham, why the manual approach is important, is because it allows you to really know and understand your customers. By visiting all those Airbnb hosts, the founders quickly learnt what they loved and hated about the service.

Related: SME Leaders: How You Can Manage Growth

By doing things that don’t scale, you get a much greater understanding of your customer, which comes in handy once you’re ready to flip the switch and grow quickly.

“You should take extraordinary measures not just to acquire users, but also to make them happy. Your first users should feel that signing up with you was one of the best choices they ever made. And you in turn should be racking your brains to think of new ways to delight them,” says Graham.

Lighting the fire

The only opportunity you’ll ever have to thoroughly engage with all your customers on a personal level is when your business is still small. That’s why it’s important to do things that don’t scale early on. It creates the foundation for successful scaling.

“Sometimes the right unscalable trick is to focus on a deliberately narrow market. It’s like keeping a fire contained at first to get it really hot before adding more logs. It’s always worth asking if there’s a subset of the market in which you can get a critical mass of users quickly,” says Graham.

“Most start-ups that use the contained fire strategy do it unconsciously. They build something for themselves and their friends, who happen to be the early adopters, and only realise later that they could offer it to a broader market.”

You can read Graham’s entire blog post, Do Things That Don’t Scale, on his blog www.paulgraham.com.

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Performance & Growth

3 Ways To Promote Business Growth In A Troubled Economy

If you’re running a small business, here are three things you can do to survive and thrive in this tough economic climate.

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It’s a complicated time for South African business owners. According to Xero’s State of SA Small Business 2017 report, 62% have seen a reduction in consumer demand over the past year, and 68% describe economic instability as their most significant challenge. Of course, these problems that entrepreneurs face are not of their making, but they must face them nonetheless.

There is a degree of optimism amongst entrepreneurs which is encouraging: 45% anticipate that business will stay the same over the next year, and 40% expect growth. While this positivity is a good thing, it must be tempered with pragmatism and proactivity.

Related: 3 Strategies To Implement A Culture Of Innovation In Your Business (Without Blowing Billions)

If you’re running a small business, here are three things you can do to survive and thrive in this tough economic climate. 

1Look for cost savings

This is very obvious, but it’s worth repeating. When your business is contending with an ailing economy, it will be forced to make certain choices. Those choices can become more or less difficult depending on how you manage your incomings and outgoings.

Developing the firmest possible handle on your finances is the best defence against external turmoil.

Look for cost savings wherever you might find them. What subscriptions are you still paying for that you no longer need? Which supplier relationships need to be terminated? Are you spending too much on stationery? Aim to eliminate all unnecessary costs: Even if they’re small, they’ll often add up to a larger cumulative saving.

Technology can often help with this process. For instance, cloud accounting software like Xero can take care of financial administration and cash flow related tasks – identifying any areas of discrepancy or waste and ensuring that your resources are being used efficiently. Taking advantage of it is likely prudent. 

2Automate everything

automation

And we mean everything.

Businesses that waste time, waste money. The more energy expended on manual processes and tasks, the less time you have available for vital business or operationally critical processes and tasks. It’s very hard to grow if you’re spending inordinate amounts of your day on repetitive, time-consuming work.

Related: How You Can Profit From Constrained Consumption

When it comes to things like report preparation, data entry, and accounts payable and receivable, it’s worth investigating your automation options. Things like pursuing invoices can now be done with a click of a button and a few strokes of the keyboard. What’s more, they can be handled safely, legally, and efficiently.

Don’t stop there. See what other tasks can also be automated. When you have more time, you have more headspace for the things that really matter to you and your company. 

3Spend wisely

Although it shouldn’t be a rule during trying economic times, it becomes substantially more important during times of unrest. It’s easy to spend money on hires and gadgets in a blind panic, but it’s also dangerous – and can deepen any financial troubles you may have.

Any investment you have, no matter how trivial, should be thoroughly audited for potential profitability. If it won’t help you make money or become more efficient, it shouldn’t be pursued. If there’s a greater than acceptable chance of making losses, save the risk for a time when your business is more profitable.

Related: Has Your Business Stopped Growing? Here’s How To Turn Things Around

Knowing what is and isn’t a sensible investment isn’t always easy. Cloud technology can again be of use here. if you’re considering investing in service desk software, it can generally let you know if the number of resolved queries will result in meaningful cost savings. If you invest in a marketing automation tool, it will let you know if your campaign ROI is likely to exceed the expense.

Navigating the choppy waters of the modern South African economy won’t be easy, but by implementing the above, it will be more than manageable. With financial prudence, process automation, and strategic investment, you can come out the other side even stronger than before.

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Performance & Growth

How You Can Profit From Constrained Consumption

There’s an art to giving new markets access to products that were previously unavailable to them – and growing your business as a result.

Matt Brown

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The ambition to disrupt markets with new innovative products and services is on the rise. This is especially prevalent in Silicon Valley, where entrepreneurs love to talk about disruption  —  though few understand the term.

There is an important distinction between efficient, sustainable and disruptive innovations  —  namely that instead of making products better or more affordable, disruptive innovations give a market access to a product that was previously unavailable to them. Enter constrained consumption.

Constrained Consumption

African consumers are aspirational by nature. The challenge, however, is that the man in the street has to overcome barriers and constraints to achieve their aspirations. If these constraints can be accurately identified by entrepreneurs and brands, they have a huge opportunity to capitalise on them.

Related: Common Mistakes SMEs Make When Looking At Growth Opportunities

The Disruptive Opportunity

When it comes to making a true dent in the world ,  perhaps the biggest opportunity for disruptive innovations lies in emerging markets, where examples of constrained consumption can be found everywhere you look . This represents fertile ground for entrepreneurs and brands to disrupt markets and create monopolies around new innovative products and services.

This opportunity is compounded by the impact of ‘the rising billion’; the estimated three to five billion people who will connect to the Internet for the first time by 2020.

7 Consumer constraints that require innovative solutions that will allow you to access new markets, carve a niche for yourself and grow your business.

Unpacking Constrained Consumption

business-constraints

Below are just a few examples of constrained consumption, and how entrepreneurs and brands can take advantage of them.

1Wealth Constraints

Arguably one of the most common addressable constraints in emerging markets is the wealth constraint. Smartphone adoption in emerging markets is largely constrained by the affordability of smartphone devices. The world’s cheapest Android smartphone (the Freedom 251) by Indian company, Ringing Bells, is a disruptive product that removes this constraint even in remote areas where some consumers earn below $10 a month.

2Access Constraints

There are more people in Africa with access to mobile phones than clean drinking water. The same can be said when it comes to electricity access. In many instances, the ability to charge a mobile phone is restricted, and sometimes non-existent.

The $5 wind-powered phone charger for bicycles, developed by a sixteen year old Danish student, is a disruptive innovation that addresses the access constraint in a simple and DIY fashion.

3Complexity Constraints

If a technology product is complex by nature the technology adoption curve by users is often extended. There are some who argue that the launch of the smartphone has extended the technology adoption curve,  not shortened it.

The reality is that if a complex feature of a smartphone can be transformed into something simpler, and then provided to the constrained users, the technology adoption curve can be shortened or removed. MTN has done this by enabling feature phone users in Africa to access tweets from Twitter via SMS.

4Educational Constraints

South Africa’s population is currently around 55 million people, but, according to 2015 statistics, only 550 127 full-time learners took the National Senior Certificate (NSC). What if this status quo could be disrupted through peer-to-peer video streaming technology, such as Meerkat/Periscope?

By enabling lessons to be streamed to a broader set of remote students, educational barriers could be substantially removed. It could also disrupt the underlying business model, with educational institutions creating an additional revenue stream by charging 25% of the normal tuitional fees to remote students (subscribers).

Related: [PODCAST] Brent Tollman – How To Sell More Using Story Telling And Video

5Health Constraints

The simple act of getting to a medical healthcare professional or doctor is often out of reach for many Africans. The connection of doctors to patients in a remote and digital context can remove this barrier. While the commercial model won’t work in Africa, given its price points, iCouch.me is a Web app that pairs users with healthcare professionals who typically charge between $65 and $90 for 50 minutes of video chat time.

A solution like this would disrupt the entire value chain through partnerships with companies, hospitals, and insurance companies.

6Banking Constraints

The lack of banking infrastructure has seen disruptive mobile banking solutions launch across Africa. Most notable is mPesa in Kenya and EVP Plus in Somalia, but more start-ups are entering financial services with disruptive innovations. Why does this matter?

Access to affordable financial services is linked to increasing economic growth, reducing income disparities, and alleviating poverty. But in most emerging markets, access is limited by high fees, product constraints, and lack of trust. The Barclays Accelerator start-up, GetWala, is on a mission to bring digital banking solutions to emerging markets.

7Funding Constraints

For many start-ups and small businesses in emerging markets, the lack of funding is often a primary barrier to growth. The rise of crowdfunding and social funding has solved the funding dilemma of many start-ups. But the emerging opportunity lies with the traditional institutions and today’s modern disruptive companies. Barclay’s Africa has recently launched its own accelerator and is in the process of opening up its business model to disruptive innovators. Even WeChat Africa has announced its own seed fund for promising mobile start-ups.

Future-proof your business

Disruptive companies that put innovation at the heart of their culture are future-proofing their businesses, and the importance of culture generally increases in proportion to the competition in the market.

Success and profit are largely dependent on the right culture mix. Spotting constrained consumption is just the first step towards realising a disruptive ambition and a pre-cursor to creating a dent in the world as we know it.

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