The next step is treating customers as unique and special and making them partners in your business, where they can assist with service improvement and product development.
In our last article we discussed the art of ‘Upselling’ and introduced various tips and techniques successful entrepreneurs use to increase sales and stay ahead of the competition. This month we focus on developing a true customer focus.
It’s been ages since we’ve heard the plea “if you don’t take care of your customers, someone else will” or that the customer is “king”. One-time CEO of Scandinavian Airlines, Jan Carlzon, declared a long time ago that “the only thing that counts is a satisfied customer.” In an industry struggling with high fuel prices and overcapacity this idea soon faded into obscurity, along with many airlines.
Walt Disney, the legendary entrepreneur and co-founder of Walt Disney Productions, said right at the outset, “Do what you do SO well that (customers) will want to see it again and bring their friends.”
The satisfaction index
Recent research indicates only 1 in 4 customers go home satisfied. Clearly we are paying lip service. The whole point about sales is that you want your customers to come back, and when they do, to bring their family and friends. The early entrepreneurs were lucky. When a customer had a bad experience she told just 10 people.
Nowadays, with the internet, and especially social media, customers tell 10 000 of their ‘friends’ and the whole world gets to know in milliseconds. Ask companies like Woolworths, South African Airways and Hyundai whose fortunes have risen and fallen on customer’s perceptions.
Only two types of customers?
If you’re a small business owner you may think there are only two types of customers – those that shop with you and those that shop with the opposition. We believe its helpful seeing customers in categories. These could be ‘new’, ‘fickle’, ‘loyal’ or ‘advocates’, price-sensitive, convenience, traditional or finer foods or ‘blue blood’, ‘cosmopolitans’ and ‘young influentials’. There is no end to the segmentation. Adapting your sales strategy to suit each group is key though.
For new customers, shopping for a particular price point or a special occasion, a warm welcome is essential. They may not represent a big proportion of your current sales, but they offer the greatest long term potential – so don’t ignore them. For loyal customers and especially customers who sing your praises building a formal, long-term relationship is the ultimate goal.
In our experience nothing works better than talking to your customers. Some would say not merely talking, but listening. Hearing their voice above everyone else’s in your business. If you have physical premises (restaurant, shop or garage) you should be walking on the floor / forecourt daily and talking to your customers.
One of the ways to interact with customers, preferred by the big retailers, is Customer Focus Groups. A Focus Group is a group of customers carefully selected to give you feedback. It’s important they’re customers who have a vested interest in your business and who won’t hold anything back.
Focus Groups are not difficult to organise, requiring just some simple planning, sending out of invitations, hosting of customers in a safe environment (on or off-site) and engaging in conversation. Let customers talk openly about their shopping experience or ask them specific questions about your products and services (sales channels, pricing, promotions and new developments, in fact any area of the business you want feedback on). Focus Groups shouldn’t be once off events but an opportunity to build life time relationships with customers.
Next time you are on the shop floor, instead of avoiding difficult customers, as many salespeople do, ask your staff to point them out and then introduce yourself and your product offering or “value-proposition”.
Engaging your customers
By definition a “value proposition” is a promise of value to be delivered to a customer or the belief by a customer of value to be experienced. “Value”, in this context, is based on the benefits a customer receives from good or services in return for payment. Value propositions may apply to the entire business, or part of it, and may include customer accounts, various products or services offered for sale.
Audi’s introduction of the Quattro drive system in 1980 led to it becoming synonymous with high-performance vehicles. In terms of customer value Audi’s Quattro system set it apart from other competitors. Although other car manufacturers (BMW, Mercedes and Jaguar) also had all-wheel drive systems they were not as widely encountered and marketed as Audi’s.
Why is a value-proposition essential? The answer is simple. Your value proposition creates a strong differential between you and your competition. It improves the quality and focus of your selling. You’re able to increase sales in specific customer segments. Customers typically want to know “What’s in this for me?” and “Why buy from you?”
If you spend just one day understanding what customers want and clarifying your value proposition you will have improved your business.
Another key concept to understand is a customer’s “moments-of-truth”. These are points at which a customer interacts with your business and has an experience, good or bad. They may be many. Let’s use the example of a garage. Nowadays garages operate as “convenience centres” i.e. they sell petrol, diesel and other automotive-related products as well as groceries and / or fast foods and with added-value services like dry-cleaning, ATMs and car washes.
From a customer’s perspective the “moment-of-truth” is the minute she decides to fill up her car (on the way to work or on returning home again), spotting tell-tale signage or perhaps an inviting looking forecourt, safe, secure parking as well as short queues at the pumps. Buying fuel is a ‘grudge’ purchase. Customers typically ask themselves: Will my experience be easy and quick? Is there someone helping with traffic control? Is the entrance to the shop accessible or is it blocked by a delivery van? Is the shop clean?
Are the aisles easy to shop and my favourite food product on display? (We’ll deal more thoroughly with layout and / or space issues in a future article). When I want to pay, will I have to queue? Is there a manager on duty if something goes wrong?
Let’s not forget we’re now in a convenience outlet, customers need to find a suitable place to park, fill up their car, choose tonight’s meal and then leave in under 12 minutes. We can learn a lot from TESCO, the UK’s market leader, with respect to convenience. Their standard for queues is not “3 minutes” or “5”, or one cashier for every three customers, as is typical in South Africa, but “one person behind another is a queue” then management take action.
They call up extra cashiers, put on packers, walk the queue talking to customers. Nowadays, service stations operate 24/7 and need to run efficiently even at 03h00 in the morning. But it’s not operational efficiency they want. It’s customer efficiency. Cutting back staff to the extent that customers requiring assistance can no longer find them on the shop floor is ludicrous.
If one understands a customer’s moments-of-truth and what they really need one can improve their experience of your business.
Hiring the right people in the first place is one of the keys to success. We believe hiring salespeople with the right values or “attitude” is vital. Values, unfortunately, are best taught by parents. As an entrepreneur your role is to hire people who already have a “can do” attitude.
You need to “hire the smile” as it were and then train these raw recruits in product knowledge and specific job-related processes and procedures. Keep recruitment interviews practical. Ask difficult questions and then role-play actual encounters with customers on the sales floor.
Product training should take the form of indoctrination – touching, tasting and experimenting with product as customers would. Your salespeople won’t be able to sell your products or services if they don’t know anything about them.
Good old-fashioned shopkeeping
Sales gurus the world over believe that the longer you’ve been in business the less you know about your customer. If you apply just one technique from this article, amongst the many, make it the one preferred by an old-fashioned shopkeeper we know. Write down everything the customer tells you in a small notebook and keep this in your top pocket. Refer to it constantly, implementing just one thing each day and encourage your staff to do likewise.