LizBizBuzz

Satisfied Customers Can Turn On You On a Dime

2009-11-16T10:26:09-05:00

I wouldn’t have believed this if I hadn’t seen it with my own eyes. Stores will sometimes spend thousands on new racking systems or to repave their parking lots -- but not a dime to train their employees.

Joanne’s Fabrics is a national chain with great products for anyone who sews or does crafts. My friend Mary does both but sewing is more than her hobby; it’s her home-based business. Her store of choice for fabric and sewing machine? You got it, Joanne’s Fabrics. How long has she been shopping at their store? Probably 15 years. How much has she spent? Probably thousands.

Mary recently purchased two pens that are used to mark fabric -- the kind that within 10 minutes or so the ink dries and disappears. This is very useful when you are sewing and marking on light color fabrics. Unfortunately one of the pens was not working. Here are three important pieces of information to the story. 1. The pens are $6. 2. The week before, Mary purchased a new sewing machine for more than $1,000. 3. Mary does not have a receipt for the pens.

I probably don’t need to tell you anymore but it highlights some very important customer service issues. When Mary took the pen back, the salesperson was unwilling to refund her money. (Mary didn’t ask for a new pen since she wasn’t that thrilled with the first one.)

Funny the salesperson didn’t look for Mary’s name in the computer and Mary didn’t say, "Hey, I’m a great customer, I bought a $1000 sewing machine last week and spent $5000 last year in your store."

I decided not to add my two cents but asked Mary a few questions instead. She said she understood why the salesperson didn’t give her back her money: Mary didn’t have a receipt. I asked her about the sewing machine she bought for $1000, to which she replied that she forgot to bring it up.

Okay, so Mary is a more passive customer, not wanting to cause problems and doesn’t realize that she has leverage with the salesperson or clout in the marketplace. You can be sure if she tells this story to a few more friends she will have worked herself to a frenzy -- and then look out!

The real questions in my mind are:

Why didn’t the salesperson ask the customer any questions before she said "no way"? A question like What’s your name? would have probably have given Mary the opportunity to talk about how much she likes Joanne’s and about her new sewing machine.
Did she take for granted that Mary was a slacker? I mean, Mary was wearing a picture of her dog emblazoned on her shirt, hat and socks.
Did the salesperson assume the customer was just cheap? It was only a $6 item.

Mary doesn’t have a car so she takes two buses to get to Joanne’s to be dismissed. That may have something to do with Mary’s statement yesterday: why don’t we just go into New York City and go to the garment district to buy my supplies. What Joanne’s doesn’t know about Mary is that she’s a lot more sophisticated than she looks.

The Recession is Over. So Where Are Your Customers?

2009-11-09T13:50:07-05:00

Okay, so now you've heard the recession is over. I don't know what exactly what it means, jobs are scarce, credit card lenders are raising interest rates and banks aren't lending money to small businesses. I wonder what it would look like if the recession wasn't over?

Maybe more of the same?

As the Newsweek article puts it: "When the economists proclaim a recession is over, they're celebrating a technicality: they mean economic output has stopped contracting. And while that's good news, you might wait awhile before adding Judy Garland's rendition of Happy Days are Here Again to your iPod."

What's the point? It doesn't matter whether the recession is over or not. What really matter is when will your customers be back and why aren't they buying from you? Most likely they're not buying from you or anyone else. If you can acknowledge this, you"re on the road to recovery. If you're still in the unbelieving stage, your business is in trouble. There are still businesses out there that believe if they continue doing the same things the same way the customers will come. There are lots of businesses out there that believe it will all go back to the way it was. To believe this is to believe in fairies and warlocks.

Einstein's definition of success was doing the same thing over and over again and expecting a different result.

Many of the companies that exhibit these behaviors are companies that have been successful. They believe that success still awaits them no matter what they do. Unfortunately they are wrong. You've probably heard the expression, "what got you here will not get you there." Clinging to the past and what worked before will not move you forward. What will get you there there will be your ability to change, not your ability to cling to the past.

I speak to business owners every day; I admire the ones who call and say, "I don't know about that kind of stuff, meaning the Internet, but I hear it's where my customers are congregating." These are the ones who will probably survive and grow to be different companies. They will be lean, mean and accountable.

I spoke with a business owner the other day who apologetically said,"When this is over, we won't look like the same company." I asked why he was upset and he said because his company was always looked upon as leaders and now they would have to downsize. Let's face it, there are fewer customers in the marketplace and probably more businesses than ever who are chasing these customers. As a country we have never been here before and there's no blueprint for success. Smart business owners will have the guts to look the problems in the eye and say, it's time to move on. The bottom line is the bottom line and that's pretty much it. I know that doesn't sound revolutionary, but neither does "we're waiting around for them to change" or "I'm waiting for the customer to come back."

By the way, in case you didn't know it, customers haven't been on vacation. Customers are just apprehensive.

So how do you change? Change is never easy; in fact, the more you know the less you think you have to change. While times are good many business owners stood waiting for their "payoff." Unfortunately it never really came. In fact, many of those who sold their businesses had to scurry back to reclaim what was left of their failing business. Why did this happen? Most of them sold the business to someone who was like the: running the business the same way. The new owner didn't think about changing either.

One of the things that happens to owners is what Marshall Goldsmith calls the Paradox of Success: "I have succeeded, I can succeed, I will succeed and I choose to succeed." It reminds me of another powerful expression: "veni, vidi, vici" -- I came, I saw, I conquered. Why doesn't it work? Because it's not that simple. What is happening in the marketplace requires a new mindset and can't be conquered by old strategies such as dropping prices or selling cheaper merchandisers. It's too late to try and do it faster and better. It's time to do it differently.

There are some things that might help but ultimately the answers to this problem have not been written.

It's time to seriously start talking to your customers. Ask them what do they think about the economy, how has the economy changed their behavior, are they spending the way they did prior to the recession? Everyone I know -- even those with good jobs -- is apprehensive about spending money. Ask what they're doing to enjoy their lives, probably staying home. This is a good reason to make some changes to the interior.
Ask your staff what' they're feeling: if they're apprehensive you can be sure this is influencing their interactions with the customers. It's called "misery loves company" syndrome. It feels good but neither party actually benefits. Coming up with solutions works, suffering together doesn't work.
If new customers are scarce, call your old customers. Offer them an incentive to make a purchase or invite them in for a party. We can all use a little fun.
Hold a networking party and invite neighboring businesses and past customers. I recently spoke at a networking party in New York City where all types of business people came to make new friends.
Meet with other businesses and find out what they're dong to get new customers. Partner with them and hold an event; any kind of event, just bring in customers.

This is the season to be jolly and raise money for your favorite charity; collect toys, coats for kids and adopt a needy family. When your customer gets ready to shop you want to be noted for something other than the lowest price. If you don't do something, you'll be out of sight -- and out of mind.

Remember that one?

Guns 'n Hummers: Maybe Not Such Strange Bedfellows

2009-11-03T09:10:12-05:00

According to everything I’ve read and heard, the automobile business isn’t doing well. Many businesses have to reinvent themselves if they are going to survive.

How to do it? By being smart and creative.

Lynch Hummer has been in business for 15 years, but these days it doesn’t matter how long you’ve been in business. For the past two years, the automobile industry hadn’t been kind to Hummer dealers and the “cash for clunkers” program wasn’t for their customer.

Also, unverified reports on gas mileage are anywhere from 8-12.5 miles per gallon. But does that really matter? People don’t buy Hummers because of the gas mileage; they buy them because they love them.

After seeing Jim Lynch on CNN, I decided to take a chance and see if he would chat with me. I was a little amazed and delighted that he would talk to me.

My question to Jim was: Why guns?

"In order to thrive during these challenging economic times, I need to expand my business and find a product that will appeal to my customers," he says. "Many of my customers are big sportsmen, love skeet shooting, so why not add this product to my mix?"

Lynch adds that Lynch Hummer sits on about 7 acres and has an additional off-road course of another 30 acres behind the building.

A natural for Lynch: guns and cars. Lynch had to get a license from the Bureau of Alcohol, Tobacco, and Firearms in order to sell the weapons but business is booming. Lynch also consulted with law enforcement and hired a gun expert. It is obvious that Lynch is serious.

Guns you say, really?

Sound foolish or a little strange? Let’s see, there’s Starbucks and music, that didn’t seem to make a whole lot of sense but their customers love it. Nothing is strange if you know your customer. Does it matter what you choose? Of course it matters, and Lynch is smart. He is building solid, customer loyalty built on solid marketing strategies.

What’s the trick? Simple: find out what your customers want and give it to them.

Lynch will win some and lose some but in business that’s the way it is. The key is to decide who your customer base is and go for it. Advertising is too expensive “to throw some against the wall and see if it sticks.” You know the old phrase, “50% of advertising works and 50% doesn’t, and the problem is which is which?"

Making a move without discussing it with your customers can have serious effects on your business. Consider CEO of Whole Foods, John Mackey, who decided to voice his personal opinions about health care and now finds himself "a few customers short" according to ABC News. Not a problem if you have enough to support your bottom line, but still risky. In my book, “Red Hot Customer Service” I refer to a basic marketing strategy about how to talk to your core customers before making a change.

So how does Lynch determine what's right for his business?

Be creative, survey your customers: ask what they think, what additional products and services would they be likely to buy?
Examine your own likes and dislikes; find something that you believe in and you like; remember, you spend a lot of time at work.
Consult experts in the field; let your customers know you’re serious and you want to do it right. To be effective in business, you’ve got to pick your customers. The right customers will be loyal and refer you to their friends.
Create your niche; the danger is that your niche is very narrowing and eliminates additional customers that you really want.

Not a gun or Hummer advocate? It doesn’t matter; you’re not the right customer for Lynch Hummer!

Resources:

Want To Do More Business? Get Out and Attend That Business Networking Event

2009-10-20T15:42:22-04:00

As a business consultant, I often talk with business owners and salespeople about the importance of networking: basically getting out and meeting people. Unfortunately many people aren't too positive about the whole idea. They tell me it's a lot of work, that they don’t know what to say and they won’t know anyone at the event. I would agree with a couple of them—it does take work and you might not know anyone. But as Woody Allen once said, "90 percent of success is showing up."

I guess to win the game you’ve got to be willing to play.

It’s more than just showing up, though. I would say it’s showing up with a purpose. Sometimes things "just happen," like forgetting your umbrella and getting drenched, but maybe that’s not even a "just happen" type of thing. As Dr. Ivan Misner, the Founder & Chairman of BNI, the world's largest business networking organization, put it, "Networking isn’t about netsit or neteat. It’s about network."

Many of you know or belong to BNI but might not know that last year alone it generated 5.6 million referrals resulting in $2.3 billion dollars worth of business for its members.

Last week, Internet Marketing Inc., located on 1115 Broadway in NYC, with additional offices in Las Vegas, San Diego, and Miami, hosted a networking party at their offices.

Who is Internet Marketing Inc. and what do they do? As they say, "They build, market and manage your online presence. They don’t create proposals and reports, they create and experience and build relations."

I would call them a company with expertise in the future. I haven’t met everyone, but if the rest of the offices are like the New York one, they do it with excitement, enthusiasm and good will. I recently met Todd Soiefer, President of the Northeast Region, when I was speaking at an event in Princeton, NJ. Speaking about networking, I offered a business consultation as a door prize and guess who won it? Now you know how I wound up speaking at the Internet Marketing event. What did I speak on? What else: Growing Your Business through Social Networking.

I consider Todd Soiefer and Nicole Stillings, Senior Marketing Consultant, as masters of networking. Throughout the night over 60 people stopped in to meet, enjoy some food and spirits as well as each other’s company.

The event was held at their offices, in Select Office Suites, on the 12th floor and all the businesses in the building were invited as well as clients and friends. Nicole Stillings was in charge of seeing that everyone got to the event and felt welcome. Nicole had mobilized her interns, had them on the phone calling people and seeing that the arriving guests were comfortable while she went off and managed the caterers. It was obvious that Nicole is comfortable making things happen as well as hosting large events.

"It’s most important for people to feel welcome and comfortable," Nicole says. "We appreciate them coming to join us in making the event successful so we want them to take away what they need. Not everyone is comfortable speaking to strangers so it’s our job to make sure that the event works for everyone."

After speaking, I took the opportunity to eat some good food and speak with a couple of the guests to see what would bring them out on a rainy, New York night. They came out to meet people and hopefully do business, since this was a serious crowd.

Drew Franklin, Senior Marketing Manager for ENT and Allergy Associates, LLP (the largest ENT Doctor group), headquartered in Tarrytown, NY, talked about building relationships.  

"In order to be pioneers in our business, we have to know what we can do to attract customers," Drew said. "We might be experts in our own field but we have to learn from the experience of leaders in other businesses if we are going to grow." Drew seemed to enjoy the event and meeting new people.

Jim Bond, Managing Partner of The Private Travel Group, a company providing customized private jet travel also located in New York City, was of the same opinion.

"The only way people will want to do business with us is if I can identify and fill their needs," he said. "It takes time to build relationships and the only way it will happen is if I spend time meeting and getting to know other people."

People were laughing, exchanging cards and really getting acquainted. Interestingly enough there were musicians as well as agents, bankers, investment brokers, teachers, public relations firms and people looking for employment.

One of the things that was most noticeable was the atmosphere of good will. Even though they say the economy is "challenged" this was definitely a positive place to be. I asked Todd what makes an event like this work and why do it.

"Everyone is so isolated and over worked that we that we need to have events where people can do business and have fun," Todd says. "Since we talk networking we should walk the walk."

Todd’s suggestions for a successful event:

Make it simple -- not too much to drink or eat, since the purpose is networking. Keep the party moving. The party doesn’t have to be long or elaborate, just inviting and friendly.
When inviting people, consider who would benefit from the event. We like to invite our customers so they can make new contacts and hopefully do business from the event.
Vary the age group and the experience level of the guests, this way people get to meet people they wouldn’t ordinarily meet.
Hosting a face-to-face networking party is part of building your online presence. It’s important to take pictures and/or videos and then connect them to your social networking sites. Put out a tweet or two so people will know what you’re doing.

"The most important thing for us," Todd adds, "is to keep the buzz going. We are an internet marketing company; we need to show our customers how traditional networking events paired with social online marketing can help grow their business. They need to be comfortable with the social networking tools that we provide for them. This is a good way to show them we know how to talk-the talk and walk –the-walk."

Exactly!

Check out the recap of the event on Internet Marketing Inc.'s blog, which includes the below video they shot of my presentation.

Enjoy!

Are Your Satisfied Customers Putting You Out of Business?

2009-10-19T10:00:01-04:00

They Could Be

According to a study conducted by two professors from Vanderbilt University, up to 40% of satisfied customers do not return to those businesses who gave them the satisfactory service.

This means that almost half their customers wind up missing in action.

How would they know if they’re missing?

They probably wouldn’t, because most businesses don’t track lost customers or try to find out where these customers went.

If this is true, most businesses don’t even know if their customers are satisfied or not. In fact, a non-complaining customer may be interpreted as a satisfied customer. This may simply not be the case.

Check out these statistics.

The average "wronged customer" will tell 8-l6 people about it. Over 20% will tell more than 20. Source: Lee Resource Inc
It takes 12 positive service incidents to make up for one negative incident. Source: “Understanding Customers” by Ruby Newell-Legner
For every customer who bothers to complain, 26 other customers remain silent. Source: Lee Resource Inc.

Customer service used to mean following through on your commitments to your customer and doing what you said you would do. In other words: delivering on the promise. Here's my new definition on what customer service means to me:

I believe that delivering the promise is no longer customer service. Delivering the promise is the price of admission a company pays to be in business. The new customer service is what you deliver beyond the promise. It’s what you do to delight, excite and build relationships with your customers that make their experience memorable.

If you accept this definition it means expanding your thinking about customer service. This means knowing that every aspect of your business has an impact on customer service, not just face-to-face encounters but everything that happens in your business. To make it work, every employee needs to be committed to learning what your customers want and then developing action plans to make it happen.

How will this happen? By determining what will astound your customers and then exceeding their expectation.

The bottom line? Satisfied isn’t good enough.