Category: Customers

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How do you talk to your customers and prospects?

Not that long ago we were all getting lots of promotional material through the post – junk mail. Now, we get lots of promotional emails – so many in fact that Google have introduced a filter in their email system so they are pre-sorted into a folder labelled promotions.

Guess how many of those you would actually read?

We are told we have to use social media to promote our businesses, but the variety of platforms is amazing. It’s not just Facebook, LinkedIn and Twitter but Google plus, Instagram, You Tube, Xing….I could go on and on.

Some marketing gurus are advocating a return to physical mail to stand out from the crowd.

Often, you’ll see a “chat” system available on a website. Click here to “chat” to us and you can exchange a series of messages with an operator.

You might also consider mobile messaging. I know some of my contacts prefer a text message to any other form of communication!

Finally, or course, there is the other use of a telephone – to actually make calls!

The questions should not be “Which method do I choose?” but rather “Which method does my customer / prospect choose?”

There is no point sending emails to someone who doesn’t read or respond to them. You may have a wonderful Facebook presence, but if your target audience doesn’t use Facebook, so what?

If your customer prefers to communicate using a text message, that’s what you do.

If they’d rather talk to someone, pick up the phone.

Make sure you have enough capacity to provide a prompt service. No one will be impressed by a long wait for an operator – either on the telephone or on the web, and unanswered messages on social media will just do more harm than good.

Whatever channel your customer chooses, that is where you go.

 

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Building trust

 

There’s a saying that people only buy from trusted sources, and if you combine that with the one “people do business with people” you begin to recognise just how important it is that your prospects and customers can trust you / your organisation / your people.

Establishing trust is difficult and can take a long time. Destroying it can take seconds. I know I have quoted this before, but it bears repetition:

Trust arrives on foot and departs in a Ferrari – Mark Carney, Governor of the Bank of England.

The rules for maintaining trust are actually very simple.

Be consistent. Trust requires certainty and inconsistency is the enemy of certainty.
Be very clear. Nothing destroys trust faster than disappointed expectations, and they often result from a lack of clarity. Who is going to do what by when?

Keep your promises

If you are going to fail to meet a promise, tell your customer early!
Be responsive. If you don’t answer questions or provide information when requested, your customer will think you have something to hide.

Building trust takes longer and is a little more complex.

Be visible. Your prospect has to know you first. If you know who your prospects are, and where they are, make sure you are visible there. That might be a trade magazine, a particular website or an exhibition. If your prospects are there, you should be too.

Be helpful / of value Your prospect has to like you. If you provide something for nothing or for very little (an email address) you are helping your prospect. We like people who help. What can you give away?

Make it easy. Your prospect will still be nervous and hesitant. What can you do to make the decision an easier one? Is there a trial version or a low cost “light” program they can experience?

Give guarantees. You are confident that you deliver value, so guarantee it to your prospect.

That’s it from a customer / prospect perspective, but what about building trust within your teams?

Similar principles apply – do what you said you would do, when you said you would do it. That will take you a very long way.

 

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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 are your business cycles?

A way to understand and benchmark your business is to identify the cycles within the business.

The sales cycle is the period from the initial contact through to the point at which a sale is made.

The delivery cycle is the period from the receipt of the order or the signing of the contract through to the completion of the delivery of the product or service.

The production cycle is a sub-cycle of the delivery cycle and is the period from receipt of the order through to the completion of the product (but not its delivery or installation)

The order to cash cycle is the delivery cycle plus the credit terms taken (not offered) by your customer.

You can extend this thinking to almost any part of the business but the key point to recognise is that the longer the cycle the more resources are required to complete the cycle.

At its very simplest level if the order to cash cycle is (for example) 120 days that means you have to fund the operating costs of the business for 120 days.

Add to that a sales cycle of (say) 90 days and you have to fund the business for 210 days or the best part of a year. Ouch!

In practice, of course, in an established business the cycles overlap so that the cash from last month’s orders is available to fund this month’s overheads, so it doesn’t look anywhere near as bad.

However, if you can shorten the cycles in your business you’ll reduce the amount of cash tied up in the business and take the pressure off working capital.

Check by talking to other businesses in your sector to see if their cycles are similar to yours. You might find their experience is different – so you can implement improvements in your business.

If you really do have an extended production cycle, think about asking for partial payment as the work is being done rather than waiting until everything is complete and delivered.

 

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Exceed your customer’s needs

I often find my clients are limiting their business options at the outset by telling themselves and everyone else “we’re only a small company” with the implication “we can’t do that…because we are only a small company.”

Ask the alternative question “what would a world class company do?” followed by “how can we do that?” and you may well be surprised by the results. Size is not everything!

There will be times when you are limited because you don’t have the resources, but more often than not it is a question of mindset, not resourcing.

Every giant corporation and every industry leader was once a small company, but they didn’t let themselves be bound by their size, so why should you?

It is not just about copying from world-class if you really want to stand out. It is about best meeting or exceeding the needs of your customers – and if it is important to your customer, it should be the most important thing to you.

In several sectors a handful of companies have completely disrupted existing markets by applying technology to change the way things have always been done. You could choose Uber for disrupting the travel industry, or AirBnB for the hospitality sector.

Both companies identified a that the incumbent providers (even those that were world class) fell short of customer needs and built businesses around meeting those needs.

They didn’t copy what the existing world-class providers were doing and they didn’t limit themselves by their size.

The fundamental question that you should be always asking is

“What do my customers want, and how can we best meet that need?”

Not every business can be an AirBnB or an Uber, but every business can do a better job meeting its customers’ needs.

 

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Don’t be a day late and a dollar short

 

There is s a great American saying used to describe a failure. It’s often used to describe how an individual performs, as in “He is a day late and a dollar short”.

The English equivalent is “Too little, too late”

The business lesson is directly connected to expectations.

If your customer expects a delivery on Wednesday and you don’t deliver until Thursday, in your customers’ eyes you are a day late, even if you always planned to deliver on Thursday.

In the same way, if your customer thinks that you will do more than you think you are going to do you will come up a dollar short!

I am sure you don’t set out to be a day late and a dollar short – who would?

You can avoid that by making sure you have a solid grasp of your customer expectations at the start of the relationship. If it is a complex service or project, map out the steps of the project and assign responsibilities. Often, with complex projects, you as the supplier cannot make progress until the customer has completed a task, but if that dependency is not clearly stated guess who will get the blame!

If it is a customer complaint, time is of the essence. If you can get back to your customer quickly – even if it is just to say “we’re working on it” – that can alleviate some of the perception.

The other side of the coin is how you can turn your customers into raving fans.

Under promise and over deliver is a frequently heard truism, but the over-delivery has to be managed. There’s no point over delivering if what you are adding are things the customer does not want / need or value.

The crucial steps are to understand (and manage) your customers’ expectations, work out what is really important to them and then over-deliver in that area.

 

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Perception and reality

Most businesses think they provide good service to their customers and they are probably right, if they are still customers.

Some time ago, I was managing a large distribution business. Every year we commissioned a “Customer Satisfaction Survey” from a third party. It was a report that we debated at some length, to see if there were opportunities to improve our services.

The problem with that report (and I am sure many similar exercises) was that the answers didn’t change very much from year to year. We were asking the people who were using our services, and the very fact that they kept coming back to buy again told us we were providing adequate service – and the report reinforced that view.

What we really needed to do was to ask the people who didn’t buy from us, or even better the customers who no longer bought from us but instead had found an alternative supplier. What made them change?

You and your customers may think you provide good services. What do the people who tried you and went elsewhere think?

Marketing & Sales people will tell you that you can much more easily reactivate a past customer than find a new one; you can do much more to improve your services by asking a dissatisfied customer what you did wrong – and in the process perhaps that dissatisfied customer will give you another chance.

What have you got to lose by asking?

 

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Who looks after your customers?

 

Some time ago I was collecting my wife from the station one evening.

It was cold and windy, and when I entered the station lobby it was no warmer than being outside as one of the doors was open.

I stood there for a few minutes, trying to see if her train had arrived, and then realized I was early and would have to wait – so I closed the door.

As soon as I did so, one of the security guards leaped up and propped it open again, telling me “We have to leave it open, there are no handles on the outside – if the door is closed no-one can get in”

Many of you will know that Reading station and the surrounding track have just undergone a £400m investment program – the whole station is practically new, as are the doors in question!

You can understand, I suppose, that the detail of a mechanism to allow passengers to enter when the doors are closed was overlooked in the initial plans, or even during the final construction. What is difficult to understand is that the station and these doors have been operational for several months without remedial work.

Passengers have not been seriously inconvenienced as the doors are always open, but on the evening I was there three ticket office staff and two security guards were suffering the cold weather coming through the open doors.

If the front-line staff are inconvenienced in this way, how are they likely to give their best service? Why hasn’t this been fixed? I am sure a handle could be fitted reasonably quickly!

Are the management not listening to their staff, or is there no communication system? Are the staff unwilling or unable to raise this issue?

In your business, if you want to give the best service, you need to get the best from your front-line staff – which means you need to take the best possible care of them. Are you doing that?

 

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Perception is reality

In almost any walk of life, it does not matter what you think. What matters is what the observer perceives.

Gustave Flaubert said “There is no truth. There is only perception”

If you are in any doubt just ask any politician!

If your team think you are likely to react badly to certain types of news or information, they will hesitate to share it. You’ll be left in the dark, and perhaps get a nasty surprise when it is too late to do anything about it.

If your suppliers think you don’t value their efforts, they are less likely to help out when you need that order expedited.

If your customers think you don’t care about them – the reality is the perception – you don’t care – or at least not enough.

I’m reminded of the Robert Burns poem, To a Louse, part of which is

And would some Power give us the gift
To see ourselves as others see us!
It would from many a blunder free us

You can avoid a lot of problems by asking how am I/ we being perceived, through employee surveys and customer surveys.

You can gain even more insight from exit interviews with staff who are leaving, and from former customers who are now buying elsewhere.

Ask your suppliers how they rate you as a customer.

Just asking the questions is a really good start. People love to be asked for their opinion, and making the effort to give them the opportunity will be beneficial.

Structured questioning, where you aim to uncover opinion in particular areas will sometimes provide greater knowledge but always allow for free-format comments.

You may think your business is the best thing since sliced bread, but what you think does not matter.

All that matters is what others think.

 

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Keeping your customer for longer

Most business leaders focus on the revenue line of the p&l and  are targeting increased revenues month on month and year on year.

What I often find is that the business only focuses on one element of revenue growth, that which comes from new customers.

Existing customers are “taken for granted” in the revenue plan. They bought from you last month / quarter, so they will probably buy again – and we know what they will buy, probably.

Your revenues are made up of several elements:

(Existing customers x existing quantities x existing prices) + (new customers x new quantities x new prices)

Most small businesses undercharge for their goods and services, but that is for another time.

Almost every business can improve its performance by reducing customer losses or “churn” as it is known in some industries.

Often businesses with large quantities of subscribers, like TV subscription businesses or mobile phone providers have dedicated teams known externally as cancellation departments but internally as retention teams. They are often empowered to offer the subscriber a discount or special deal as long as they stay a subscriber. My broadband provider gave me a deal when I threatened to leave just a couple of months ago.

Having a dedicated team like these is better than nothing, but it is a bit like bolting the stable door after the horse has bolted. These teams don’t go into action until after the customer has complained.

If you can, it has to be better to pre-empt the complaint.

One way to do that is to implement a customer care system.

A simple system can also help with your cash flows.

More business failures are caused by lack of cash flow than anything else, but even the most successful businesses can find themselves hampered or restrained by lack of cash flow.

There are many places where cash “gets stuck” in a business but one of the most obvious is in your debtor book, when people don’t pay you on time. That’s a big part of what is called the “order to cash” cycle, and if you can make that cycle shorter it will dramatically improve your cash flow.

Payment terms are one of the most overlooked conditions when business are negotiating supply deals, but even when the terms are reasonable getting paid according to those terms can be a challenge.

Most businesses don’t help themselves.

A typical scenario is this:

Day 1: Invoice date
Day 30: Due date
Day 45: First chasing letter
Day 52: Second chasing letter
Day 60: Payment arrives

Take a step back & ask yourself why we don’t do anything until 15 days after the invoice is due?

If there is an unresolved issue, you might not learn about it until 45 days after you thought you were done! That could be enough to put you in a deep dark hole!

As an alternative, try a “customer care” call on day 6. The call is to the person who ordered the goods or services:

“I’m just calling to make sure everything was OK with your recent order, and to see if there’s anything else we can help with?”

You might get an add-on sale, or an upsell at this point, and when you’ve dealt with that you can continue:

“That’s great, thank you. Now we sent off the invoice last week – I just want to make sure that’s all ok as well? Can you tell me who has to approve it – I don’t want to miss your payment run?”

At this point, you’ve had confirmation that the invoice has arrived and there aren’t any queries on it.

You also know who has to sign it off – if it’s not the person placing the order.

Take away all the excuses – “We don’t have that invoice/ there’s an error on the invoice/ it hasn’t been approved yet / there’s something wrong with the goods or service” and you will get paid faster.

Even better, you are now getting to the customer before they complain. You have a much better chance of keeping that customer for longer.