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Posts Tagged ‘Business Services’

You Receive Not Because You Ask Not!

When it comes to driving your business, you want to have a couple of  magical things happen:

  1. You want your customers to become even better customers
  2. You want those customers to tell people about you.

This magical one-two punch is what grows your business without inflating your expenses. But to get a handle on those two things requires you get the answers to three things your customers won’t tell you … unless you ask.

No. 1 – Why Do You Enjoy Being My Customer?

Customers continue to do business with you for a number of reasons (good rates, great service, strong rapport), but it’s rare that they’ll volunteer this information without being asked. So ask them.

Find out what you’re doing right, and you can do two things:

  • Do more of the things they like
  • Discover patterns

Get the goods on this question, and you can turn your current customers into do-more-business-with-you customers.

No. 2 – What Else Do You Wish I Did In My Business?

Customers don’t just get products/services from you – they get other products/services before, during and after their transactions with you. Don’t miss this chance to cash in. Find out what else they want, and discover how you can give it to them.

  • If it’s out of your business scope, make deals with trusted vendors and recommend them.

Either way, it’s a chance to tap into more revenue, potentially at a minimum of effort on your part. But you have to ask.

No. 3 – Who Should You Tell About My Business?

People like doing business with you. And chances are high that they know others who would benefit as well … but they won’t volunteer this info off the top of their heads (most of the time). So make it networking with future clients easier by offering incentives.(Be on the lookout for my next post on how to do this)

Give people a good enough reason to spread the word about you, and they surely will. And when your good name becomes a standard of excellence that attracts new customers to you, the effort you put into creating it is money in the bank.

 

Run FORREST (Customer) RUN!

Loving customers sounds great when we’re reading it in a business book. But in the real world, the way we interact with customers can be anything but loving.  Here are some of the bad behaviors that I’ve seen over the years as a business banker and how to fix them.

1. Pushy Salesperson Attitude.

The days of the pushy salesperson are long gone. And if you’re still measuring sales performance on quantity (revenue) instead of quality (profit), then you are bound to get reluctant customers who cost money to integrate into your system and are often lost before they become truly profitable.

Find your ideal customer.

Start by identifying your favorite customers, the ones you get along with, who seem effortless and even a pleasure to work with. They are often a pleasure to work with because their requirements match what your business system delivers. For example, if you consistently deliver within 48 hours and your customers need product in 48 hours, they will be delighted. But if you bring on customers who need 24-hour delivery, you will consistently disappoint. When you’ve identified your ideal customers, dig into the specifics of what it is about your business that works for them.

2. Overpromise and under-deliver. (elementary?)

Studies show that expectations drive satisfaction results. So if you set your customers’ expectations higher than you are able to deliver, they will be MORE dissatisfied than if their expectations were closer to the true experience.

Listen.

For what’s really important to your soon-to-be-customer. Ask them what they expect from your company and then speak to each expectation and detail what a real experience is like. Then ask them how that sounds to them and if that meets their expectations.

3. Tell them what they’d like to hear.

This is another expectation issue. Customers want to know what to expect: when will their product be delivered, when will the service guy show up, etc. People are planning their busy lives around your answer, and when you just tell them what they want to hear but deliver something altogether different, this absolutely sends people through the roof.

Tell the conservative truth.

If you have only been able to deliver overnight 1 percent of the time, don’t say that you can always do it. If you’re not as good at providing a typical service because you just don’t like it, then refer them to the person who is better. This will actually work in your favor.

4. Ignore them after the sale.

Bringing on new customers is important, but loyal customers who refer people to your business do so because of their experience AFTER the sale.

Create a process.

Customers get ignored because there’s not a process to service them after the sale.

Love your customers.

I mean this in the most serious way. Look for ways to offer them special deals and introduce them to new products and services. Have special events just for them where they can learn new things about your product or service. One client I have sent their customer a truckload of balloons, hamburgers, hot dogs, a grill and all the fixings for a picnic to celebrate their anniversary of being a customer for 25 years.

5. Keep the owner (President/CEO) behind the scenes.

Loyal customers feel like they have a relationship with the company. When customers have the feeling that they can reach out and talk to the owner whenever they want to (even though they rarely do it), it gives them a sense of closeness and loyalty.

Interact with customers.

Find opportunities to put yourself in front of your customers.  If you own a retail operation,  be there and answer questions. If you are a manufacturer, take customer service calls now and then. You might think you have more pressing things to do, but they will not yield the powerful customer loyalty that a personal connection does.

6. Make them feel stupid.

Rude and condescending tones can creep out in your communication— especially if you’re stressed. Your customers probably aren’t as smart as you about the product or service that you sell—that’s why they buy from you!

7. Voicemail, and no other way to find you.

It’s getting more difficult to find people at their desk.  And today’s communication tools have increased expectations that when a customer calls, they expect a call back or a response ASAP. Voicemail will NOT cut it anymore.

Leave a cell phone number.

Be sure to include your cell phone number in your voicemail recording so that people can get in touch with you.

8. Not understanding what’s important in their application.

There’s nothing more frustrating to customers than feeling like they are talking into a black hole when they explain how they use your product and service in their application.

Observe your customers in action.

Take the time to actually spend time with your customers watching how they use your product. You might even discover a new product or service in the process.

9. Putting your policies over their satisfaction.

Have you ever created a policy about customer satisfaction? The customer isn’t always right, but is following your rules worth the loss of a customer?

Plan to break the policy.

This might sound odd, but think about when it makes sense to break the policy. Think about when breaking your rules is worth it. This makes it easy to deal with situations quickly and easily without taking too much time to have the customer wallowing in discontent.

The Price is RIGHT! or Is It!?

1. NEVER compete on price. Period. Yeah, yeah, I know that the economy sucks and that people are more price conscious than ever before, but you MUST show your customer the other reasons to buy BESIDES just a low price.

If the only thing that you can do is to compete on price and you have no other competitive advantage, then you might as well close the doors right now instead of waiting for the inevitable.

Don’t turn your life’s work into a commodity like toilet paper, milk, and facial tissue.

2. SHOW your customers why you are worth a premium price. Most people don’t buy on price alone. They want the PERFECT solution to the problem that’s keeping them awake at night. If you take the price out of the equation (for the most part) and show them exactly how you are the hero riding in on the white horse, people are happy to pay a premium for something that they know will provide the results they had hoped for.

3. Don’t chase after the bottom feeders unless you have no choice. If you can, aim your business towards a higher caliber of customer. If you go after people that don’t have two nickels in their pocket, you are going to focus your entire business on a niche of people that cannot afford what you have to sell.

I know this sounds a little elementary, but you’d be surprised how many businesses are started where the entrepreneur did not think about the income level of the customer and their ability to actually BUY the product.

4. Dump your worst customers. Price shoppers are the worst customers. They will beat you to death to knock off a few pennies, tell all of their friends how they totally took you for a ride, they’ll give you the highest return rate, and they have absolutely NO LOYALTY to your business whatsoever.

It’s healthy to lose a few customers on price. This means that you are just at the right place. If you are not losing anyone, then you are the one that is holding your industy back from making more money.

5. Create some kind of scarcity with your product. Artists learned this a long time ago by numbering their prints with limited editions. Sculptors break the mold after they cast just a few copies.

People are naturally drawn to wanting things that other people don’t have. Especially in the U.S., at least. So, no matter what kind of business you have, create a REAL element of scarcity and you will be able to justify a higher price.

Just look at the latest games systems that are HOT for Christmas. Do you think these guys need to put them on sale? Nope. They can charge double, because everyone wants them and there are not enough to go around.

How can you make your business like the latest Christmas craze?

So there ya have it. Ways to make a little more money in your business, help out with the longevity, and to get rid of those pesky customers that eat all of your time.

How Much Is Your Customer Worth!?

Do you know how much your customer is worth to your business? How much should you spend to get the new customer? When a deal comes your way that could grow your business by bringing in new customers, how do you figure out whether the deal will pay off?

Your gut feeling may have come through for you in the past and you let it dictate how much is just right, too much or too little. What you think is too much may end up bringing in more customers and profit than you expect. How about this? Is it worth the risk to spend too little and seeing your competitor take over those opportunities?

You can answer the question. It involves some math, but once you figure it out — it will pay dividends as you can easily make the right decision on how much to spend to acquire new customers.

Here’s another way of looking it at. How would you do things knowing a customer is worth $1,000, $5,000 or $10,000? The difference between the $1,000 customer and $10,000 customer is huge. When you estimate a customer’s worth, then you can rest easy knowing you’re not spending too much or too little. Knowledge is power.

Here are the three things you need to think about in figuring out a customer’s worth:

  • Average customer stay: How long customers stay with you.
  • Average gross margin: If you provide a service for $500, subtract the cost of the employee time and any materials the employee uses to provide the service. For $500 products, subtract the cost to produce the product including payroll, commissions, materials and utilities. Don’t include overheads in the math.
  • Average sales: This looks at how much the average customer buys from you.

When you know exactly how much a customer is worth, it easier to decide whether an acquisition activity will be worth it. Think about it for a minute. You know that an average customer is worth $5,000.

You receive an offer to advertise in specialty magazines that target your ideal customer. The magazine charges $2,000 per month for the ad for $24,000 for the entire year. The magazine also reports that its advertisers have gained an average of three new customers per issue.

$24,000? Ridiculous. But, wait. Instead of using three new customers per month, let’s be very conservative and say the ad brings in one new customer per month. The total cost of advertising for one year is $24,000. The total profit of getting 12 new customers (since we already know the customer is worth $5,000) in one year is $60,000. So one ad for one year brings in $36,000 in profit.

What if the ad only brings in six new customers in one year? You still get $5,000 profit. Remember, all of this uses very conservative estimates.

If you don’t have $24,000 to make this happen, it may be worth pursuing a line of credit, loan or accounts receivable invoicing for the needed working capital. It may not be worth it for the $5,000 profit, but for $36,000 — more likely. Your business growth may not stop there. Your new clients may like you so much that they become your biggest evangelists and tell others about you.

Switch the Style Up: Tips on How to Make Money in 2011

1. Get to know your customers

Banks have been doing this for years because they’re required to, but any business can use the same tools and techniques to know who they’re doing business with – a name, an address, phone, e-mail address, preferences, likes and dislikes, and so on. With even the most basic data points, you will gain insight into your customers and be able to tailor your goods and services to offer what they want and how they want it, developing deeper, more loyal, and ultimately more profitable relationships.

2. Create a customer referral program

Often your best source of new customers is your existing customers; with some basic knowledge of which customers are your best and most loyal (see above), you can ask them for referrals, cementing their loyalty by rewarding them with in-kind goods and services (they’ve already shown they love your stuff, you can reward them with discounts or special offers for their referrals). These programs really work, and they don’t have to be costly or time-consuming if done properly.

3. Share what you know

Like most of us, your customers feel better about buying a particular product or service if they know others are buying it and what they think about it. If you’re a retailer, chances are you have a tremendous amount of data on purchases from your POS system; if you have a website, you’re already gathering data on popular pages, downloads, items, and so on; other businesses will have similar troves of purchase data. Running simple analytics and sharing the results of those, in a high-level, anonymous way with customers (“did you know that 49 percent of our customers buy one of these 3 products?”) can provide customers with that extra little push they may need to make a purchase, visit you again, or refer a friend.

4. Break down barriers

Most organizations, whether not-for-profits, retailers, accounting firms, medical offices, business-to-business service providers, small or large, have silos – finance, marketing, sales, management, and so on. Often people in these silos don’t have much to do with one another – they just do their jobs and try not to concern themselves too much with what’s going on in the other silos (hey, they’re busy!).

However, this leads to a very fragmented view of the customer or no view of the customer at all; each different business function will have a different view of what’s important to the business and what customers look like. You need to break down barriers between different functions and stress a unified, holistic view of the entire customer relationship (as well as a business-wide focus on the customer as the most important purpose of your business – without customers, after all, there IS no business). It’s simple to get started, you don’t need complex, enterprise-wide systems – just reach out to other team members in other business areas and start the dialogue.

5. Don’t over-invest in technology – especially the wrong technology

Often, “customer intelligence” is wrongly perceived as requiring boatloads of investment in technology – and, especially, “magic bullet” solutions (like CRM systems, or MDM, or CIF – pick the acronym of your choice) that are sold by technology vendors hoping to convince you that their solution is the one and only thing you need to make all your customer intelligence dreams come true. This is just plain wrong: while technology is certainly important and an enabling factor in getting customer intelligence efforts off the ground, businesses often get carried away and invest in massive, enterprise-wide implementations that put the focus on the tools and technologies instead of on the customer.

Then, these technologies begin to drive the business and force managers, marketers, sales people and others who use them to fit their thinking about the customer and about the business into the procrustean bed of the technology – technology becomes a massive, expensive distraction rather than a valuable support mechanism. Instead, start with a clear focus on the customer, understand clearly the business processes needed to know and serve the customer, and implement enough of the appropriate technology so that the business doesn’t become a slave to the tools and lose what’s most important: the emphasis on the customer.