When I run sales workshops, I always test the temperature of the audience by asking them about their favourite customer; not necessarily the biggest one, but one that they like on a personal level.
This is to help me to get a feel for their business, how they deliver their products and services, and to look at how to replicate their best practices, based on successful customer case studies.
Occasionally some members of the audience look at me blankly and further probing reveals that they actually dislike all of their customers: difficult people, who always seem to be complaining and constantly looking for lower prices.
At this point I feel they are more in need of personal counselling than sales coaching, but do my best to rectify what must be a terrible situation for someone in a small business. In a large organisation you can at least look forward to the pay cheque at the end of the month, whereas in a small organisation, the buck stops with you. There is one consolation: in a small company, you are actually allowed to make some mistakes, so long as you rectify them swiftly.
This was an interesting observation made by Richard Richardson, who has seen both sides of the coin. He had a very successful career in advertising, most latterly with Young and Rubicam. His favourite customer was John Barnes at Kentucky Fried Chicken, and they used to spend many hours cooking up new business ideas, just for fun.
But one idea seemed to have some traction: what about the original British fast food — fish and chips? The best-known name, Harry Ramsden's, was a single large restaurant at Guiseley in Yorkshire, with a few other outlets, differently branded. The owners were looking to sell and Barnes and Richardson saw the opportunity to build a great brand, something they were both passionate about.
They had very complementary skills; Barnes the charismatic ideas man, Richardson the completer/finisher. They shared common values, particularly a love of customers and customer interaction.
They raised some money and then set about building the Harry Ramsden's brand, but without the large marketing budgets they were both used to. They developed a style that they later captured in their book, Marketing Judo — the idea that you use the opponent's weight to your advantage, using leverage, rather than brute force.
They kept the team lean but instilled a sense of customer awareness by insisting that everyone in the 25-person head office called at least five unhappy customers every week.
This caused some bemusement amongst their customers, particularly a gentleman in Bournemouth who had filled in a card to complain about some cold chips at their Bournemouth outlet.
He was so surprised to hear from a director of Harry Ramsden's that he dropped his mobile phone, and then explained that he had just bought a car for £35,000 and had less joy in having problems resolved than for this 70 pence bag of chips. Richardson's simple phone call also generated significant new income as the gentleman's wife resolved to take parties of visiting Chinese business people to Harry Ramsden's.
But Richardson explains that in a small business it is fine to make mistakes, so long as you resolve issues swiftly and personally. He feels that many large companies seem to have an ethos of never admitting failure, which can be disastrous, as customer expectations are increasing all the time.
Once the brand had become established, they decided to grow their business by a franchise model, as it meant that ownership of the brand was closer to the customers; a proven concept delivered by local people. But while the brand can be promoted generally by head office, it is still down to the local entrepreneurs to do what they can, often without much of a marketing budget.
In Marketing Judo, Barnes and Richardson have many tips for doing just this, including extending your offer in interesting ways (the Glasgow branch offered haggis) and providing complementary additional services (arranging coach trips for senior citizens to show off interesting local buildings after a fish supper). They refer to this as “getting the crowd on your side”, using emotional leverage rather than just marketing muscle.
If you do this, not only will you grow to love your customers, you will find they will love you right back, and do your marketing for you, by word of mouth.
Copyright ©Mike Southon 2012. All rights reserved. Not to be reproduced without permission in writing. Mike Southon is the co-author of The Beermat Entrepreneur and a business speaker.
Ok, so that’s a bit of a leading question, but whilst we all know what our answers should be, it’s tempting to focus all of our time and money on acquiring new customers rather than looking after the ones we have. Acquiring new customers satisfies our need to get onto the next thing, it seems exciting and new. But does it make good business sense?
The short answer is no. It can cost you up to six or seven times more to gain business from a new customer than it does from an existing one according to Flowtown. The same blog highlights that you can increase your profits by up to 95 per cent just by improving your customer retention rates by five per cent. That sounds pretty optimistic to me, but even an increase of 20-30 per cent in profits wouldn’t be a bad thing for most businesses.
Your loyal customers will spend more money with you, they cost you less to gain repeat business from, and they’re probably more loyal and less sensitive to price than new customers. So, if retaining the customers you have makes good business sense, then why don’t many businesses put their existing customers at the heart of their marketing strategy?
In the small business world, it’s easy to think that it might be a lack of strategy. Many business owners don’t have a strategy or a marketing plan and will often lurch from advertising to leaflet drops to manic social networking without taking a considered or planned approach. Perhaps that’s a very unfair way of looking at things, but I do believe that without a strategy to retain customers you leave yourself open to losing customers unnecessarily.
That said, big businesses aren’t immune to failing to retain their customers effectively. Talk to anyone renewing their insurance and you’ll wonder whether the insurance companies have even heard of the concept of customer retention. I know that it’s always cheaper for my family to apply to our existing insurance company as a new customer, than it is for us to just renew. How unbelievably inefficient for us all!
Large and small businesses could do well to think more carefully about customer retention. In this age of comprehensive spending reviews and increased efficiency, frankly we could all do with whatever help we can get in leveraging more business from our valuable customer bases. What strategies do you use in your business?
Where there’s a great experience then there’s probably great care.
Just been to Dans le Noir - a truly remarkable restaurant in London (and Paris).
What makes it so special and worthy of mention?
Just think about it.
The whole concept challenges how you ‘see’ flavours and textures and how you relate to your food. It is mind-blowing. You have to go. It is like no other restaurant. And the “blinded guides” have to care for you while you are totally outside your comfort zone.
The experience is wild and challenging. Spending a couple of hours without any sight makes you re-evaluate your fortune at being sighted, think about what it must be like to be blind, and messes with your palate. You have little idea what you are eating. Crazy. The experience lingers for days.
My point. Dans le Noir is a true experience. You don’t forget it. You tell everyone about it. Remarkable. A business. And it increases public awareness about blindness.
If only more businesses could offer a true experience.
We do not say “thank you” enough.
Therefore we take people for granted. If people feel taken for granted they become less loyal. Is that what you want?
I don’t know why people don’t say “thank you” so much these days. Maybe it just isn’t cool to be seen to be thankful.
Maybe it shows vulnerability or frailty to acknowledge that you are grateful.
Or maybe the problem is that most words lose their value and their currency with over-use ("nice", "pro-active", "strategy" to name but a few).
Turning the situation around, I am constantly aware of how certain people seem almost incapable of saying "thank you". Why would that be? Maybe they aren’t grateful(?); but their inability to acknowledge my action actually hurts me.
So, when did you last say (and mean) the words “thank you”?
Your kids, partner, staff, customers, suppliers will all appreciate a sincere "thank you".
The cynical may say that I am just trying to put a deposit in the emotional bank account (or some similar weasel words), but actually I think that it is just basic common courtesy to acknowledge when someone does something for you.
Thank you for reading my blog.
OPINION, OR MAYBE EVEN A FACT!: You must be different from the rest.
FACT: We now live in an ‘experience’ economy
In today’s world, the big budget brands are treated with suspicion. They now need to prove themselves. Old World marketing tried to give different personalities to what were essentially similar products. Think of the weak, wet stuff known as lager in the Eighties. Nowadays, customers are inclined to think that if a product looks, sounds, smells, feels and performs in roughly the same manner, then it probably is roughly the same. So, somehow you must create that difference that separates you from all the other similar products.
OPINION, OR MAYBE EVEN A FACT!: Brand preference has always been a function of perception, but now you have to try much harder to create (and maintain) the perceived difference.
The customer’s experience should be made to be unique in tangible, physical ways. A corollary to this is that if your service is intangible then a powerful way of branding yourself is by creating tangible (and ideally memorable) experiences.
HOW DO I DO THAT THEN?: One way to deliver the difference is through the service experience.
‘Doubting Thomas’ consumers demand tangible differences in your product or service.
OPINION: In a world where everyone copies each other, it takes a lot to keep your experience different.
In our novelty culture, it takes even more effort to keep the customer’s experience fresh and surprising. How is this to be done?
FACT: If you are the same as the rest then why should customers bother to buy from you?
SO WHAT?: Ignore the one-liner at your peril! Wake up and smell the coffee!
In a world where competition seems to be everywhere, you need to separate yourself from the rest.
FACT: If you compete on price, only the customer will win – in the end the company with the lowest prices (and biggest buying power) will get the business. This is no place for the timid.
SO WHAT?: If you try to be the same as the rest, a ‘me-too’ business, it is incredibly difficult to survive in the long run. After all, the only way you can differentiate yourself if several businesses are selling the same product will be on price. And if you differentiate yourself on price then it becomes inevitable that you enter a price war – customers will chase the cheapest prices – those businesses with the biggest market share (and economies of scale) will be able to command better prices from their suppliers. As a result, these competitors will be able to pass on those savings to customers while maintaining healthier profit margins than their competition. You will end up cutting your profit margins, probably until you go out of business.
Legendary, remarkable customer service will be your secret weapon.