Category: Customers

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Business is not like a game of chess

There are many instructive parallels between playing a game of chess and the challenges of running a business.

To win in chess, you have to plan your attack carefully and anticipate your opponent’s moves. While you are attacking, you must not neglect your defence. Moving a piece into an attacking position but allowing it to become isolated is likely to result in the loss of that piece.

Many business leaders fall into the trap of thinking that their customer is their opponent.  That’s not the way to achieve success!

Chess is usually a game for single players with one opponent, but in business you don’t have just one opponent. You probably have many.  There are plenty of people who could steal the pieces you have left isolated. These pieces equate to the customers you have neglected and left alone.

It’s not all doom and gloom, though, because business is anything but a single-player game. Not only do you have your own team, you can call on lots of other people who will help you to succeed. They include your suppliers, your partners – even your customers.

Go back to the basic reason why your business exists, then look at it from the customer’s perspective – not your own. You will realise that your business is, in some way, enabling your customer to solve a problem or achieve something.

Take this concept of ‘solving a problem’ and use it to sharpen and hone everything you do. Look to remove all the things which don’t add to that singularity of purpose.

Doing this rigorously will make your customer’s life much easier.

It will make selling to new customers – who have similar problems – much easier.

It will make attracting new customers much easier.

It may even save you money and time.

It’s not like a game of chess. It’s much simpler than that. Just focus on doing the right thing to solve your customer’s problems.

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There’s no smoke without fire

‘There’s no smoke without fire’ is a phrase I remember from my childhood, but these days it seems to have fallen into disuse – or at least into much less frequent use.

 

If you have a wood-burning stove at home, as I do, you can observe the truth of this statement quite literally. If the ashes from the previous fire are still producing smoke, you can make a new fire by adding more fuel.

 

In business, you need to follow the smoke trail to its source. You need to find the ashes. If they are smouldering, fan them into flame or put them out. Don’t just leave them!

 

Fires, from a business perspective, can be good or bad! One trail of smoke might be an increase in customer complaints. If you don’t measure this, or worse, if you are measuring the levels of complaint but not getting the message they’re telling you, you will have a fire on your hands. And that could be destructive!

 

If you don’t find the ashes and make sure they have been put out, you are kidding yourself about their potential to re-ignite.

 

Continuing with this metaphor, another example can be found when good people leave the business. Exit interviews will often shed light on situations, events or people, but if you don’t utilise the feedback this provides, you’ll be wasting the time spent in the interview.

 

More difficult to spot are the trails of smoke that lead to ashes you want to fan into life. These could be process improvements or innovative ideas that haven’t been fully formed and presented. That’s when you must encourage, coax and cajole the embers to leap into life.

 

Take the time to spot and follow the smoke trails.

 

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Do you bless your customers?

May the road rise up to meet you.

May the wind be always at your back.

May the sun shine warm upon your face …

Those are the first few lines of a traditional Irish blessing and, for me, they are all about making life easier for the person receiving the blessing.

Regular readers will know that I’m a great fan of ensuring the customer’s interests lie at the heart of your business strategy. The easier you make life for the customer, the more you will be valued as a supplier, the longer the customer will stay with you, and the more opportunities you will have to win other business from that customer.

During a recent session with one business, we discovered that their customers were having to re-order consumables manually. However, this business held customer usage data, which meant they knew what their opening stock position was, so creating an automatic replenishment order wasn’t that much of a step for them. But doing this would make a significant difference to the customer – one less thing for them to worry about.

In a similar vein, another business was including a service offering with every sale. The default was that the customer bought the service with the product and had to specifically decline the service if they didn’t want it. As the IP for the product belonged to this business, there was nowhere else the customer could get it serviced or repaired.  But including a service with the sale didn’t just give the business the security of future revenues, it also eliminated a potential headache for the customer. They too had security, knowing that the service had been organised in advance.

The key to keeping your customer on side is to understand their business need. The fact that you supply them with a particular widget isn’t important. What matters more is understanding what they are going to achieve with that widget. And when you know what they are doing with it, you may be able to see how you can help them achieve their goal. Through doing this, you will almost certainly gain other benefits as well.

 

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What’s logic go to do with anything?

Do you expect your customers or your team to react logically?

You will often be disappointed if you do!

Fans of the Star Trek series will remember Leonard Nimoy playing the character Spock, who was half human and half Vulcan. The emotional human half was suppressed by the unemotional Vulcan half and Spock often found himself struggling to understand his human colleagues’ emotional reactions.

Your customers are not Vulcans or robots. How you make them feel is at least as important as how well you do your job / provide your service.

How you make them feel is going to be determined by their interaction with your team – so your team (who are also human, not Vulcan or robot) must appreciate that how they make the customer feel is crucial.

If your team are not happy and enthusiastic about your business they will struggle to make the customer feel loved and valued.

Have you ever been served in the local supermarket by the Saturday girl who quite clearly did not want to be at work – she’d rather be hanging out with her friends or still in bed?

Every time your customer or prospect connects to your business they form an impression of the business.

It’s not just when you are on your best behaviour, giving a fantastic sales presentation, or when they’ve come to see you at a trade show. It’s all the little contacts in between, from the receptionist through the customer support team to the sales team and the directors.

You can deliver the best product, the best possible service and get everything right, but if your customer doesn’t feel good about doing business with you it won’t matter.

Remembering the sayings “A man who never made a mistake never made anything” and “to err is human” aiming for a satisfied customer really won’t get you to the point where you can slip up, make a mistake, provide poor service, and be forgiven.

Turning your customers into raving fans not only creates easy sales wins – they will refer business – it also cushions you against any shortfall in service.

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Satisfied customers can be bad for your business

What do your customers think of you – do you know? Have you asked them?

If they think you are great and rave about you all the time, that’s perfect.

If your objective is to satisfy your customers you may fall short from time to time, and even if you don’t you are vulnerable to losing customers to competitor activity.

A satisfied customer is some proof that you met expectations. You satisfied them. You could probably replace satisfied in their responses with “OK” as in I am OK dealing with them

If your customer is only OK dealing with you, they are only one bad experience away from leaving you. You were OK until you messed up this last order, so now I am going to go and find someone else who is equally OK in the hope that they won’t mess up.

Equally, if they are only satisfied with you, how much of a special offer or an incentive will it take for a competitor to poach them? Probably not that much of an effort, after all, your customer thinks you are only “OK”.

How different is the situation when your customer is a raving fan?

You are in a much better place. Competitor activity will not attract them – they probably won’t even notice it – and because they are your fan they will forgive the occasional mistake.

How do you create raving fans?

First, set the expectation in the business – in every department – that you are always going to go the extra mile for every customer.

Second, talk to the customer. Ask the customer “What can we do better?” and “What will it take for you to become a fan?”

The things that you think matter to your customer may not matter at all and things that you don’t even notice may irritate and upset your customer. You will only find out if you ask!

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Know your customers

In banking and financial services there’s a set of regulations called Know Your Customer or KYC for short. If you’ve opened an account in another country in the past few years you will have experienced the process which can be administratively complex!

One of my clients was opening an account in Hong Kong and the standard procedure of “Please call into the branch with your passport” was not very helpful. The ultimate owner is the person whose identity must be verified – and in this case that was a Silicon Valley entrepreneur who had no plans to visit Asia soon!

Knowing your customers and knowing your market is vitally important for any business. It’s not a compliance issue (as it is in banking) but a tool to help you win more customers and do more business.

I was reminded of this when I heard Lord Karan Bilimoria describing the early days of Cobra beer. He and his partner marketed the beer to independent Asian restaurants and their efforts laid the foundations for the success of Cobra.

He knew his market; he knew his customers and he had created a product to fit with their offerings and their customers.

Had he tried the same approach with many (most) of the restaurants on the high street it would have failed, as they are not usually independent and the manager on the site has little authority to purchase anything!
Had he tried the same approach in another country it might not have worked. In the US, where there are plenty of independent restaurants, the majority (in my experience) do not serve alcohol at all.
If you don’t have a really good connection to your market and a thorough understanding of why your customers choose you, the chances are that your marketing efforts will misfire.

Don’t assume that you know why they buy – assumptions are dangerous and they may be buying for a reason you don’t consider important.

Ask your customers why they buy; ask the ones who have left why they are leaving. You might be surprised by what you learn.

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Red or Blue?

 

John held up the ball in his hand and asked his Chris “What colour is this ball?” to which the angry young man replied, “it’s red, of course – what that got to do with it?” John replied “Actually, from where I am sitting, it is blue”

John rotated the ball, and Chris could now see that it was red on one side, but blue on the other.

A simple story but one that illustrates the saying “There are two sides to every story”

Most of the time there are many different versions of the truth. People see things from their own perspective and often will embellish a story or an event. Sometimes that’s just to make the story more entertaining, and sometimes because their version makes them look better.

Often that is harmless but it can lead to real problems, especially if there is competition or conflict in the team. That’s when the different perspectives can become misleading and may cause you to make poor decisions.

Good decisions are based on sufficient accurate information – or blind luck. Poor quality information, including that seen from one perspective, should be eliminated or counterbalanced.

If you have doubts about something you have been told, gather more evidence!

Transparency and honesty from the leadership team will help eliminate the tendency to only tell the story from one side. If you know you are going to get found out, you won’t cross the line!

This approach works outside the company as well as within. If a supplier has let you down, and you are given an excuse that doesn’t quite ring true, check it out. Often, the supplier’s sales manager or account manager is giving you the positive story but you can get closer to the truth by asking higher up in the organisation.

The same applies to your customers – be careful what messages your team a delivering. If they are trying to keep the customer happy by embellishing the truth, they (and you) will probably get caught out. Honesty and transparency will go a long way.

 

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Where are you investing?

 

Some time ago I visited the London Eye. It gives you a unique view of the capital.

I’d expected the attraction to be really busy – and it was! We had a voucher, but no one seemed to know to which desk we were supposed to go to redeem it. Eventually, I found the right desk and we took the ride and the obligatory photos.

Customer service was very poor – not enough staff, not enough signage and not enough training for the staff that were there.

On that same trip, we had lunch at a restaurant run by a Michelin-starred chef. Service was first class and the food was excellent, but for me, the whole experience was tainted when the bill arrived with service included and space for an extra gratuity!

I asked the waiter to take off the service charge so that I could choose how much to tip, but his immediate reaction was to tell me that I should have complained earlier!

I struggled to get him to understand that I was happy with the service but wanted to determine for myself how much I thought it was worth.

Both experiences were excellent, but both were let down by the customer service and I would not recommend either.

Both businesses have invested heavily – Wikipedia tells me the London Eye cost £70m and I don’t think there is such a thing as a low-cost rental in Chelsea – but both have lost sight of the need to delight every customer.

If you run customer satisfaction surveys, perhaps the most important customers are those who used to buy from you but no longer do so. Find out what changed – just as you would with a team member leaving, you would do an exit interview. You may be surprised to find it was something really small that caused the change.

A satisfied customer is only one poor experience away from being dissatisfied. Are you investing enough in customer service, or just focused on the internal workings of your business?

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What are the best ways to keep your customers?

It’s much easier to sell to an existing customer than it is to a new one, but many businesses don’t have a formal program to retain their customers.

When you measure all the effort that goes into winning a new customer, all the money and management time you spend acquiring those new customers, compare that to the amount of time, money and effort you devote to keeping your existing customers.

If there is no formal program or incentive, or if you are not measuring your customer retention, the chances are that no one is focused on it. What’s measured is managed.

If you compare that to the pay TV industry, businesses like Sky have separate departments devoted to customer retention. They don’t call them that – it would be a bit too obvious – but if you want to negotiate your contract and reduce your fees, tell Sky you are thinking of leaving and you will probably end up talking to the disconnection team. They have the authority to offer you special deals to keep your business!

Giving an existing customer a special deal is a great way of hanging on to them, but the special deal doesn’t have to be money!

You might offer early access to a new product or service (that’s a great way of testing something new as well, by the way) or perhaps you’ll invite them to join your dedicated knowledge area, where they can learn more about your business.

If you can foster a sense of community among your customers, that will help. People love to belong to a club.

Probably the most important part of keeping customers is communication. If you don’t keep your customer informed, you are saying that you don’t care about them. If all you do is transact with them, they will never be a fan or an advocate for your business.

Whatever else you do, communicate!

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What’s your key strength?

There’s a fascinating case of a business transformation, following and adapting to changing market conditions, in the history of Whitbread.

I grew up knowing Whitbread as a traditional brewer and pub operator, back in the days when almost every street had a local public house. The company had been in brewing since 1742.

That business model was one of vertical integration. The company made its own products – in this case, beer – and then sold them through its own outlets – the pubs. The great benefit of such a model is that all the margin from the end user sale right back to the manufacture flows to the business.

Whitbread were faced with intense competition in the brewing market and decided to sell that part of the business. The market forces that drove the sale of the brewing business left in question the operation of the pubs and they too were sold a couple of years later.

At that point, Whitbread recognised their strength was in the hospitality industry. It wasn’t really anything to do with beer!

They’ve leveraged that strength with two brands that you will know today in Costa Coffee and Premier Inn (the name of the latter is undoubtedly a nod to the history of its owner) and the business is going from strength to strength.

Both Costa and Premier were businesses acquired as part of the transformation strategy, but the key word is strategy. The acquired businesses were elements of the overall plan, tools to enable the company to deliver the hospitality services it had identified as a key strength.

In a different world, St Ives Press was a very successful commercial printing business that invested in new print technology. The business moved into publishing services and acquired a book printing company. The key acquisitions were direct response printing companies – producing flyers and direct mail pieces. St Ives is now a digital marketing services company – oh, and they still do print things!

St Ives recognised that they were in the communications business, and specifically in helping their customers communicate their messages.

What’s your key strength? What is it that you do for your customers?