So Who Needs Customers Anyway?
July 21, 2010
There’s a conversation that takes place far too often with attendees in my live programs. It goes something like this:
Me: What is the purpose of a customer?
Them: To get the sale.
Unfortunately, the truth of the matter is that it’s quite the opposite: the purpose of the sale is to get the customer!
Most people follow a very rudimentary business plan: find a prospect, call the prospect, get the sale, move on to the next one. This sounds curiously like the instructions on the back of the shampoo bottle: wet hair, lather, rinse, repeat.
And it completely ignores one of the most important marketing principles we teach: lifetime value. In fact, when we do the lifetime-value exercise in our live programs, people are frequently shocked by the actual value a single customer, client, or member can bring to their businesses – value well in excess of the initial purchase – sometimes orders of magnitude higher!
So make sure you understand what your customers are worth over your entire expected relationship with them, and do everything you can to maintain a relationship that will let you benefit from this relationship while still delivering outstanding value to them.
Everything Is Dynamic
June 30, 2010
There’s an old saying that “the more things change, the more they stay the same. And while I understand the sentiment behind the saying, I have to take exception with it, because in reality, nothing ever stays the same.
Time marches on, and with it, we continue to see advances in technology, medicine, and social attitudes, although there’s a debate whether changes in social attitudes are truly “advances.”
We’ve gone from writing letters to each other in my parent’s generation to sending e-mails in my generation, and now our kids simply text everything to each other. I recently saw four middle-school-aged girls walking alongside each other at the mall, cell phones in hand, and it seemed as if they were actually texting each other!
Some advances, though, are clearly beneficial. For example, my 87-year-old uncle – still in reasonably good shape mentally and physically – is alive today because of a heart procedure that had been performed on him about eight years ago. When he asked his doctors why they hadn’t done this procedure ten years earlier when he was first diagnosed with heart problems, they said that the procedure they were going to perform on my uncle wasn’t even on the radar screen ten years before.
This was unfortunate, of course, because my father – this uncle’s fraternal twin – had already passed away from a heart attack at the relatively young age of 54.
Similarly, my own experience with state-of-the-art medicine occurred five years ago, when a karate injury made it necessary for me to have a nearly six-hour surgery to repair both a torn ACL and PCL.
The procedure involved removing the middle third of the patellar tendon from each knee and using these to replace the torn ligaments (ACL and PCL refer to the anterior and posterior cruciate ligaments.) In case you missed that, they were using tendons to replace ligaments.
And the amazing thing about it was that about three months after the surgery, the tendons actually transformed into ligaments – as if they’d been ligaments right from the start!
When I asked the doctor about how this worked, he said they weren’t actually sure, but that I was very lucky, because even five years prior to this, the procedure wasn’t even science fiction!
Everything around us changes at an incredibly fast pace. The people who survive and benefit from the changes are the ones who can see them coming and best anticipate how to utilize this knowledge to their best advantage.
What changes are waiting for you just over the horizon?
Bundle Up!
June 17, 2010
It’s tough to stand out when everyone else sells what you do. You need to have something that sets you apart from your competition, and if it can’t be the actual products you sell, then maybe it can be the way you offer those products.
For example, some self-storage facilities offer climate-controlled units, and pickup and delivery of items for businesses. So how about bundling these services, adding something extra, and positioning it as something other than the sum of the parts. Something like this to a restaurant with outdoor seating…
At Bob’s Self Storage, we’re the outdoor dining storage specialists! When it gets too cold for your customers to take advantage of your outdoor seating, just let us know a week in advance. We’ll show up with our 24′ truck, pack up your outdoor tables and chairs, and bring them to our facility for storage.
Then we’ll unload them, wash them top to bottom, and store them for the winter in our custom climate-controlled units. When Spring comes, just give us a heads-up, and we’ll pull the tables and chairs out of storage, give them another cleaning, bring them to your restaurant, and even set them up for you!
It’s all part of our “White-Glove Restaurant Storage Program,” and it’s only available at Bob’s Self Storage!
In reality, the storage facility is not offering anything more than a competitor could offer, but by identifying a specific market niche, identifying the services they might need, and bundling them into a package specifically targeted to that audience, they’ll get a much better response when they offer the package.
As a bonus, because this appears to be something designed especially for that industry, they’ll also be able to justify a higher rate for the main component – the self-storage unit itself – than they would have otherwise.
What can you bundle in your business that can add value to your customers, members, or clients? This is truly a case of the “whole being more than the sum of the parts!”
I Can’t Walk By a Piano
June 10, 2010
Life goes in cycles. There are ups and downs, periods of prosperity and scarcity, and events that end up becoming defining moments in your life.
So with all that uncertainty and constant change, wouldn’t it be great to have something you do that continually charges your batteries?
I found an example of this last week when I was listening to Pandora on my computer at work. (Pandora is a very cool music program that constructs custom “radio stations” based on the music you tell it you like – it’s free and worth a look at www.pandora.com.)
A song came on I really liked by a man named Jon Dahlander. Wanting to learn more about this artist, I did a quick Google search, and found this biographical sketch:
Jon Dahlander can’t walk by a piano. He has to play it. It’s why he’s been kicked out of countless hotel lobbies, bars, and restaurants throughout his life.
This was followed by a quote from Jon himself:
“To me, every piano has a story where it was made, who made it, the kind of shape it’s in, who played it before and what it sounds like now, particularly with one of my songs. So, if I see a lonely piano, I have to play it. It’s like finding a new friend with a common interest.”
Wouldn’t it be great to have something you do – a hobby, an activity, even something at work that gets you this motivated and excited?
Thoreau said, “The mass of men lead lives of quiet desperation.” Make this summer the time you find something new to be passionate about.
The Check’s in the Mail
June 1, 2010
There are a lot of ways to present an offer to make it appealing to your prospects. The best and most effective of these focus on the benefits you’ll bring to the customer and the reasons they should select you as the provider.
The insurance business is cutthroat, with virtual “price wars” raging on TV ads between, among others, Geico, Progressive, Allstate, State Farm, and Nationwide, with each one discounting the others’ low-cost claims, and boasting that you’ll save the most with their company.
So in this overcrowded “he said, she said” environment, I was interested in an ad I saw for Nationwide. They claimed that not only would they give you a discount for being accident-free, but they would actually send you a check every six months.
I know, it’s essentially the same thing as offering a discount, but they recognized that people like receiving checks in the mail; it’s the same reason people overpay their income taxes (passively or deliberately) so they can get a big tax-return check the next year.
Think about it – renewal time presents an opportunity to reevaluate your coverage, your carrier, and your agent. What better way to put a quick end to that internal discussion than to send the customer a check for several hundred dollars?
Customer: Do we switch companies? Nah, they just sent me a check!
Try to identify the points where you are most likely to lose customers, and see what strategies you can develop to provide them with something extra – something special – when they’re approaching that point.
Remember, it does no good to keep adding new customers, clients, or members if you’re not keeping the ones you already have.
Inside-Out Marketing
May 27, 2010
This weekend, Lorie and a group of her friends ran a Triathlon. Actually, they were supposed to run a triathlon, but a combination of bad weather and mismanagement caused her to sit this one out. That part of the story is still playing itself out, and I’ll give you an update soon…there will be some customer-service lessons here for sure…
But what I want to talk to you about this week is not the event itself, but rather the day before the event.
Lorie and a few of her friends drove about 30 minutes to pick up their race packets, including the participant numbers they place on their shirts, bikes, and helmets. The pickup took place at a store in Cary, NC, that specifically targets triathletes, and this company is a major sponsor of several large events in the area.
When Lorie and her friends arrived, there were some large tents set up where the participants could go to sign in and collect their packets. Then, they had to go into the store to pick up their T-shirts in the size they had designated when they registered for the race.
There were two problems with this: first, the store was small and very crowded, making it difficult to even move. Clearly, they could have had the T-shirts available outside, but their goal was to get people into the store so they might actually buy something.
Mind you, I don’t begrudge them for doing this any more than I blame Disney for funneling all traffic leaving a popular ride through the gift shop themed around that ride. In fact, I applaud them for doing this, even if it is a bit inconvenient.
But – and this is where they stopped halfway – they gave no incentive for people to step up and make a purchase: no coupons, no one-day sales, and no special “pre-race packages.” They had the perfect opportunity to get people to make that all-important first purchase, and include a “bounce-back” coupon good for the next 14 days to get them back into the store – and into the habit of shopping there.
But they were too busy, too lazy, or too uninformed about effective marketing techniques to take advantage of this incredible opportunity.
Make sure that when you have hundreds of your perfect, ideal customers literally standing inside the door that you do something immediate and deliberate to bring them into the fold – that’s the only way to start building repeat business and lifetime value!
Why Are You in Business?
May 19, 2010
I know that’s kind of a harsh question, but answering it is absolutely central to your company’s long-term success. Have you ever walked into a business and said to yourself, “This place won’t be here in six months,” and when you come back six months later, it’s gone?
It happens all the time.
The only reason you should be in business – whatever type of business – is to offer something special to your customers, members, or clients. Something unique. Something uncommon. Something that helps you stand out from everyone else in your market.
This “something special” is your Unique Selling Proposition, and it can be based on an almost infinite number of characteristics including location, price, market segment, process, customer need, support, or guarantees.
But it has to be based on something. You have to be able to communicate it clearly, concisely, and consistently. If you’re not sure where to start, try answering these four questions:
1. What’s different about what you provide or how you provide it that sets you apart from your competition?
2. If you closed up shop tomorrow what impact would it have on your customers’ lives?
3. What could you tell prospective customers that would cause them to drop everything and come see you right away?
4. Why should prospective customers select you versus all the other options they have?
The answers to these questions will help you define a clear and compelling USP that you can use as a foundation for staking out and owning your market.
Level the Playing Field
May 14, 2010
We all like it when other people “play fair.” In sports, there are referees and umpires to make sure everyone follows the rules. In NASCAR, there are very specific and strict rules about what you can and can’t install in one of the race cars. We have lawyers, judges, and entire legal systems to help make sure the government’s rules are applied fairly.
But I have to say that in the world of business and marketing, I’m not a big fan of the “level playing field.”
I believe that if a business is better at marketing itself, selling its products, and delivering a superior level of customer service; if it invests in infrastructure and education; and, of course, if it obeys the laws and regulations that apply in its specific industry, then it should make more money.
In that sense, I wasn’t at all excited about all the government bailouts that were granted in 2009 – these businesses took dangerous, unnecessary, and, in some cases, reckless risks, and had someone else step in and rescue them from the fate they had earned.
But none of this has to affect you. Remember, you can do almost anything in your marketing as long as it’s not illegal, immoral, or unethical.
And so your job should be to do everything within your ability to create a playing field which is not level at all, but instead, tilted decisively in your direction so that all the business you want flows naturally in your direction.
You can do this by having sales letters, post cards, and web sites that are far superior – and far more effective – than those of your competitors. You can identify a unique position for your products in the marketplace that helps you stand out and avoid being perceived as a commodity. You can create a level of loyalty and long-term value with your existing customers that will help you to get maximum value from every new customer, member, or client you acquire.
I like to have a relatively level playing field on a tennis court or bike ride. But in business, I want the playing field tilted in my direction, and so should you.
Don’t Overheat!
May 6, 2010
A few months ago, I wrote about a situation with an overheating laptop that caused the cooling fan to run constantly, creating a constant wind-tunnel kind of noise in my office.
I never did find out the cause, but I did discover that the overheating only occurred when I put the laptop in “sleep” mode – when I shut it down or used the “hibernate” mode, the problem didn’t occur.
So, rather than spend hours and hours trying to track down the problem, I take the simple and direct course of action: I just don’t ever put the computer to sleep.
But as I thought more about this, I realized that there was another lesson to be learned from this whole situation.
When the computer is working hard, the temperature of the CPU (the computer’s central processing unit) goes up, and you need to throttle back on the CPU by asking it to do less, or cool it off by increasing the fan speed.
The CPU is the computer’s brain, and if it’s not working correctly, something is going to break down. In fact, if the CPU starts running too hot, the computer’s circuitry is programmed to simply and unceremoniously shut down the computer – regardless of what you may doing at the time.
In much the same way, you need to do the same thing when you get overloaded – either lightening the load (even if only temporarily) or finding a way to “cool down” with exercise, breaks, or other diversions.
That’s why taking regular vacations is essential – if you just work non-stop, then your brain will start to overheat, and you might experience some kind of “personal shutdown.”
The “Unit President Concept”
April 21, 2010
It’s definitely a challenging time in the business world. Despite showing small periodic signs of imminent recovery, the economy is still throwing up roadblocks to success.
But as we’ve been discussing in this newsletter – almost since the very first issue over ten years ago – it’s not so much the external factors that keep us from achieving our goals, but rather our own internal limiting beliefs.
In fact, as a result of reading these articles, you’ve probably had a few great ideas you’d like to have tried, but may have run into resistance from the “powers that be” because “it’s just too outrageous” or “it won’t work in our market” or “our customers would be offended.” (By the way, these assertions are rarely true – a fact that can easily be determined by some very easy and very inexpensive testing.)
So now may be the perfect time to try out one of my favorite business concepts: the Unit-President Concept. Here’s how it works…
Take out the organizational chart of your company – you know, the hierarchical set of blocks that shows the big boss on top, the next bosses below, and so on, until you get to the bottom level of the company.
If you’re the box on top, then congratulations for making it there, or for having the guts to create a business that puts you there by default. This means you are the boss, so what are you waiting for? It’s your money, or your bonus on the line, so try something out, test it thoroughly, measure the results, and make your decisions based on fact and data and not on feeling and conjecture.
But what if you’re not the “big box” on the top? No problem. Let’s say you’re the next box. Just take a pair of scissors and cut away everything on the chart that’s not your box or any of the boxes below you in the organization. Now look at the chart: you are the boss! You’re the “president” of your group, so start acting like the president and implement strategies that will being you measurable success!
But what if you’re just an individual contributor – and you don’t even have a box on the org. chart? No problem! Create an org. chart that just has your name on it, and draw a box around it. Congratulations – you’re now the president of your own job! Granted, it’s a group of only one person, but still it’s your group.
This is the Unit President Concept – so whichever group you have influence over – even if it’s only your own individual position – should be viewed as a stand-alone company, as if your job was outsourced to you and you had complete control over how to deliver the results.
You may not have all the perks of the “official” president, but there’s a measure of satisfaction, and far more latitude than you think in how you go about accomplishing your objectives. Make something happen this week – and congratulations again on your “promotion!”
