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.
How Feyi Olubodun Uses The Enemy To Create Winning Campaigns
People don’t buy from companies, they buy from people. If you really want to build a successful business, you need to consider the human element in purchasing decisions.
- Player: Feyi Olubodun
- Company: Insight Publicis Nigeria
- Position: CEO
In 2013, the Malaria Consortium approached Insight Publicis Nigeria to help them drive the rapid purchase of Long Lasting Insecticide-treated Nets (LLIN). Ordinarily, this should be easy, given the high rate of malaria cases and deaths in Nigeria — 100 million cases of malaria reported each year, with 300 000 deaths per year. People should buy mosquito nets.
There was just one small problem — in order to stimulate trial of the product, the Malaria Consortium had given away free samples of LLIN — one per household.
Instead of purchasing more nets, families merely put as many of their family members as possible under one net. The Malaria Consortium had unwittingly created a barrier to further uptake.
Here’s what Insight CEO, Feyi Olubodun and his team did: They ran a seven-day campaign promising consumers that they would watch the first live broadcast of a live birth on TV. It was scandalous, and earned hundreds of millions in free media coverage. Government even got involved, trying to shut the project down, so the team had to let them in on the strategy.
Social media became heated, debating the morality of watching a live birth on TV.
Consumers watched a woman, Blessing Madaki, for six days leading up to the birth of her baby. On the seventh day, they watched her being wheeled into the labour room. Millions of Nigerian viewers across the country held their breaths. And then they saw an animation of Blessings’ unborn child refusing to be born, unless his father bought an LLIN. The child’s reason was simple: He didn’t want malaria to withhold him from fulfilling his destiny in life.
- 95% of viewers were willing to buy
- Purchase of LLINs went up over 10%
- 42% of traders said it was a result of the campaign, because 32% of buyers mentioned the campaign at the point of purchase
- Usage went up by 12% and remained high, even after the rainy season
- The client’s objectives had been to raise awareness by 20% and purchase by 10% over nine months. The campaign was a resounding success.
What caused the shift?
Consumers perceived on a subliminal level that malaria was the enemy of the destinies of their children and loved ones. Malaria was the enemy; LLIN the solution.
What can brands do with this? It’s simple. Brands must answer the question: What is the enemy of my target consumers, and how is my brand positioned relative to this enemy?
The success of the LLIN campaign was based on a deep understanding of consumer psyches and the fear triggers that will lead to a purchase.
In his book, Mastering the Complex Sale, Jeff Thull explains that successful sales are the result of navigating the psychology of change, bringing your customers from the positive present to a negative future in absence of your solution. In other words, highlighting the risks of not purchasing. The LLIN campaign is an excellent example of this theory in action.
However, as Feyi and his team soon learnt, while fear can be an excellent motivator, it isn’t always the best way to approach a campaign.
“We tried to use the same approach for another brand and it didn’t work,” he explains. “The team presented to the client and half the client team started crying. It’s a delicate approach to navigate. Fear is a powerful motivator, but you can also strike too deep. This pitch was for an NGO trying to raise awareness for supporting children and preventing infant deaths. Our idea was to ask parents if they’d like to save money for their children’s tombstones — if you wouldn’t do that, why not use the money for something else that preserves your child’s life? But the response was so heart wrenching, it actually didn’t work.”
So, what can you learn from these examples that you can use in your own business and marketing campaigns?
First, fear is a human emotion that can be used in marketing — but it has to be used wisely. “It’s important to remember that although we all love to use terms like consumers and target groups, at the end of the day we are all humans, and as such we have the full complement of emotions that come with being people — fears, hopes, dreams — we need to recognise that humanity when we market our solutions.”
Feyi understands that everything we do comes from a place of happiness, anger, fear or hope — even the most rational business decisions have an element of emotion, from where we choose to spend our money, to who we want to do business with. “One of the campaigns I’ve always loved was a Volvo safety campaign. As the car hit a barricade, the driver’s family’s hands all reached over his seat to hold him in place and save his life — that’s why we wear safety-belts — for the people we love. It was an incredibly powerful campaign, because it tapped into our emotions.”
Understand your customer
Whether your focus is on consumer products or B2B solutions, Feyi believes too many marketing elements are focused on the surface, pushing products. “We need to start looking deeper at the motivators behind purchases,” he says. “Why does your customer buy airtime? Who do they need to speak to? What’s the emotion behind what that airtime allows you to do?
“Marketers shouldn’t be afraid of tapping into emotions. You’re selling to human beings, and that’s why they will buy your products — not because they are consumers, but because they are people.”
But as Feyi’s own experiences have shown, you can’t just push for emotions without really understanding who you’re speaking to. “Businesses need to really analyse their communities: Who are you focusing on? What are their fears? What do they really care about? And how do you figure this out without making assumptions?”
Another big lesson is that the more you can listen to your customers, the more you can subtly adjust your product until you’re offering something your customers really need.
“If you have a product that touches directly on the humanity of your target, you’ve already gained a lot of mileage — media campaigns only amplify what your product already is. They can’t sell something no-one wants — at least not with any longevity.”
Feyi advises that if you have a clearly defined target audience, the next step is to take an ethnographic approach to really understanding them. “You need that,” he says. “If I want to sell to people in Soweto, I need to go and visit Soweto. How do they consume the products that may or may not exist in my category? What do they care about? I need to get a real feel for how they live and work. You’ll be amazed by what you’ll learn simply by immersing yourself in your customer’s environment.”
But take care. Feyi advises that if you take the time to go and speak to people, you need to do so authentically. “I can’t arrive in a rural area in a suit and expect the community to treat me naturally. Respect the community you’re entering, and blend in. Take a participatory approach. You get non-participatory observation and participatory observation, and participatory observation is always of more value in a marketing environment.
“Participatory observation breaks down barriers. Take language for example. Even if you only try and speak a few words of someone else’s language, you’ve already broken down an important barrier. You’re showing a willingness to learn and a respect for the people you’re conversing with.”
This is as true in a consumer environment as it is in a business environment. “If you’re going to pitch to a client, you need to speak their language. You need to understand their landscape and industry.
“There are so many ways to connect with people, you just need to find your similarities. You need to find what touches you both. Find the commonalities in your humanness.”
When Feyi Olubodun, CEO of Insight Publicis Nigeria, one of West Africa’s leading creative agencies, witnessed one too many cases of brands failing in the African marketplace he began to ask himself questions: Why did brands, both global and local, so often fail to connect with the African consumer? What was it about the African market that brand owners were not seeing?
The result of these questions is Feyi’s recently published book, The Villager: How Africans Consume Brands.
The Villager is available on loot.com and at all leading booksellers.
How To Immigrate With Your Family By Starting A Business In The UK
The simple way to make your entrepreneurial dreams come true in the UK.
Many people, especially those with families, are reluctant to up sticks and move to the UK. These would-be movers are often worried that they will not be able to secure employment in the hugely competitive UK job market. This source of stress alone is enough to discourage some from pursuing their dreams of living in the UK. But, there is an innovative and accessible solution.
The UK has several visa classes aimed at individuals who wish to invest in the country. These give an individual the right to live and work in the UK with their families, if they make a defined investment. A visa that interests South Africans is the Tier 1 (Entrepreneur) visa. We have developed our UK Tier 1 Entrepreneur Investment Programme to help South Africans looking to immigrate to the UK alone, or with their families.
The basics of the Tier 1 (Entrepreneur) visa
To be awarded a Tier 1 (Entrepreneur) visa, you will need to invest at least R3,5 million (£200,000) in an existing UK business or one you start up. There are certain other requirements, but these are not particularly onerous, and most investors will qualify if they submit their application correctly.
The entrepreneur visa allows you to live and work in the UK, and take dependant family members with you, defined as your partner and your child under 18. If you have the capital, or are willing to liquidate your assets in South Africa to raise it, the Tier 1 (Entrepreneur) visa is a great way to relocate your entire family to the UK.
Do note: You will need to make specific applications for each dependant, so it is vital you consult with an immigration expert before beginning the application process.
You’re not just immigrating, you’re investing in the UK
By starting or investing in a UK business as part of our programme, you will be granted the right to live and work in the UK, and earn an income from that business.
The business you invest in will want you to play an active role, not just contribute seed capital. If you want to invest in a business without being an active director you will be allowed to do so, but you may not be eligible for the Tier 1 (Entrepreneur) visa.
Another restriction is that you cannot hold this visa and work for a business other than the one you are invested in. But, your partner will be allowed to work in whatever field he or she pleases.
How do you choose the right business to invest in?
There is always an element of risk when investing in a foreign business, particularly when you’re thirteen thousand kilometres away from the country you’re investing in. It’s important to understand exactly what you’re investing in before you take the plunge.
That’s why our UK Tier 1 Entrepreneur Investment Programme is hugely beneficial. It matches your investment capital with a pre-approved investee business. We’ll make sure that your skills are matched with an appropriate venture so you can be an active director of that business.
We’ll also handle your visa applications, providing you with a comprehensive immigration and investment solution. Our partner’s list of investee businesses is over 200 strong, giving you an array of choices in various industries. This allows us to pair you with the business that best suits your investment goals and skills.
But what if you have a successful business in South Africa?
It’s no secret — emigrating from South Africa is difficult for many families who have deep roots and thriving operations. There’s no reason why you can’t keep your business in South Africa as well as relocate to the UK.
Nothing restricts a Tier 1 (Entrepreneur) visa holder from owning and overseeing businesses in other countries while they are on this visa. Many clients choose to relocate to the UK while ensuring that their original business continues to operate. In this way, you will be supplementing the income from your UK investment with revenue generated by your South African business.
You can hold British and South African passports if you apply for your British citizenship in the correct manner. You must obtain permission from Home Affairs in South Africa to avoid having your citizenship revoked. Retaining your South African citizenship will make it much easier for you to continue running a business here.
Talk to us today
There are compelling reasons to move to the UK — a brighter future for your children and a more stable country in which to retire. Our comprehensive solution will ensure you get the most out of your relocation.
If you’re thinking of immigrating to the UK or investing offshore — either or both — we can help.
8 Negotiating Tactics Every Successful Entrepreneur Has Mastered
How you would negotiate if you were talking for the other side? Now you know how your offer looks to them.
Deep down, we’re all a little greedy. We all want the best outcome for ourselves. We can’t help but consider what’s in our own self-interest any time we negotiate a deal.
But to become a truly successful negotiator, you have to learn to put aside pure self-centeredness. Because if all you care about is serving yourself, you’ll blow the deal before you even start.
Negotiations are a delicate balance of give and take. Learning to strike this balance is necessary for any entrepreneur hoping to build a prosperous business. It takes time and practice and whole lot of patience to hone a winning strategy. And yet each deal is unique and needs to be approached correctly, which is why a one-size-fits-all approach will never work for long.
Here are eight of the most important skills every entrepreneur should learn to become a master at negotiations.
1. Do your prep work
Successful negotiations are built on solid prep work. This means you know something about the parties involved, you’ve done a little background checking, you know about their business and maybe you’ve even talked to others they’ve worked with to get an idea of their strengths and weaknesses.
The same is true if you are on the other side of the table and are looking to invest in a product or service. You should have a solid understanding of the pros and cons of the commodity they are selling. The bottom line is, you need to have a good idea of who you are dealing with and what they can offer.
You should always go into negotiations with your best foot forward. You should be well rested. You should have eaten something (being “hangry” can swiftly detonate any negotiation). You should show up on time – maybe even early, so you aren’t walking in feeling rushed.
If you’ve done the above, you should be feeling positive and are going in clear-headed and confident. You will have the stamina and energy to get this deal done.
2. Consider all the details of the opening offer
The opening offer usually acts as an anchor for negotiations. It’s also where the details get hammered out, so it’s important that it’s done carefully and thoughtfully.
The basic elements of an offer include the offer price, the work being proposed, what goods or services are included, when it will all be delivered and if there are any performance incentives, warranties or terms and conditions. Obviously, price is a key component to any deal, but keep in mind the other details. They can matter nearly as much in the long run.
If you are the one initiating the opening offer, this is your chance to set the stage for the negotiations ahead and start with the upper hand. You won’t get what you don’t ask for, so be bold! If you’re on the other side of the table, the offer is key to seeing how close together you are.
Know your bottom line – what are you willing to accept? And remember to take a close look at the details. What else are you getting for your money and what else are you potentially signing up for?
3. Check your ego and emotions at the door
While you should have confidence and assurance because you’ve done your prep work, you also have to check your ego at the door.
Letting your emotions run the show will never serve you well. In fact, you should be going in feeling as neutral as you can about the situation. Leaving your ego behind will free you to think objectively during intense bargaining. You can then negotiate from a standpoint of flexibility.
To be successful you have to be able to think clearly in stressful situations and be willing to work to find common ground. If you walk in with a middle-of-the-road attitude, you’re more likely to strike a balance between getting what you want and not giving away too much.
On the other hand, you don’t want to give something away without getting something in return. Losing your ego and putting your emotions aside will help you find right path forward.
4. Play the game rather than letting the game play you
If you’re entering into high-stakes negotiations, it may be helpful to run through possible scenarios with a friend or colleague.
This will help you feel less nervous, and it may also show you objections to the offer that you hadn’t thought of, or help you see a side of the deal that you hadn’t considered.
Playing through the scenarios, even if it’s just in your own mind, may help you feel less attached to the outcome. In order to treat the whole thing as a game, you should care…but not too much!
Having a little apathy will help you stay neutral and keep your feelings in check. And remember, negotiations are like anything else: the more you practice, the better you’ll be.
5. See your strengths and weaknesses clearly
Self-awareness is key when you begin negotiations. You are essentially looking for the other side’s strengths and weaknesses. Not in a cruel way, but to help you determine your next play.
At the same time, you must also be aware of your own strengths and weaknesses, so you don’t allow yourself to be exploited. Try to take an honest inventory of your strong points and vulnerabilities.
If your company is small, what is its growth potential? Are you able to be more responsive to the market than a larger company? In short, what can you offer that the other side can’t, and what can the other side offer that you can’t compete with? Knowing where you stand on the negotiation chessboard will help you determine how to land the best deal.
6. Know when to walk away
When you enter into a negotiation with the knowledge that you are willing to walk away if things don’t go as planned, you come from a position of strength. That’s why staying neutral is key to a successful negotiation.
You can’t be bullied into a deal if you just leave. But often we tell ourselves that this deal means everything to us. Our ego is involved, and that weakens our position.
It’s about mindset. You have to believe that if this deal falls through, you aren’t losing an opportunity. You are keeping that space open so when a better opportunity comes along you can snag it. If you force a bad deal to happen, you are stuck.
Related: Let’s Make A Deal
You are no longer able to grab hold of something better. And there is no shortage of business out there. So if you are pinning all your hopes on one deal, you may be killing future business.
7. Negotiate in good faith
Whether you’re negotiating a long-term business deal or setting up a quick sale, it’s natural to feel on the defensive when you begin negotiations. We are all protective of our interests and we want to cut the best deal in our favor.
But if you are hoping to walk away with your reputation intact, you need to practice negotiating with compassion and good faith. Engage in active listening and really hear what the other side is saying and asking for. What are the issues that are making them hesitant? Then make sure that you relay your own priorities.
This is the basis of a “win-win” solution, when both sides explore each other’s positions and walk away feeling heard and comfortable with the deal that was struck. Even if it appears that you are on opposite sides, there’s usually common ground to be had. Maybe the other side has a different goal or an opposing position. But if you look for it, you can usually find mutual gains both sides will accept.
8. Know how to close
Negotiations may feel like a game of chance, but they’re more like a game of chess. A successful negotiation requires a good sense of timing and the ability to sense the other side’s next move.
If you’ve done your prep work and are bargaining in good faith, you should have a solid idea of what they’re looking to get out of the deal. And of course, you should have a clear idea of your own bottom line. So you’re either working to bring the sides progressively closer, or the deal is going nowhere.
Ask yourself what the endgame is. Can the difference between both parties be split? If both sides are close but a few numbers are hanging up the process, what will it take to shake things loose?
If you can strike a bargain that makes sense, it doesn’t need to be perfect. It just needs to work for both parties involved. If you can get to that point, you have set the stage for the final handshake. If not, you have to be willing to walk away knowing it just wasn’t the right time.
This article was originally posted here on Entrepreneur.com.
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