Sales

Consumer A.D.D. -- Is There a Cure?

Consumer A.D.D. --  Is There a Cure?

After describing modern consumers and their desire to watch or read what they want, when they want, the current issue of Business Week concludes:

The result: a serious case of attention deficit for every business that depends on traditional mass media to reach customers.

So the question is, what is the cure? Here is an additional question that I think leads to the answer: if consumers aren't paying attention to traditional advertising, who are they paying attention to?

The answer: their friends, their colleagues, their neighbor, their obnoxious brother-in-law--frankly, anybody but an advertiser. So what is the solution for a business? Turn your customers into promoters. Your customers are somebody's friend, colleague, neighbor and yes, even obnoxious brother-in-law. Make your customers so happy they can't wait to tell somebody--that is the cure.

Your success will be determined more by what your customers say about your business than what you say about it--no matter how much you pay to say it!

Customers who feel that you are listening to them are more likely to recommend you to a friend. How do your customers know that you are listening? Learn more

The Miracle of the Reservoir

The Miracle of the Reservoir

I grew up in the west and now live in Arizona. There is a simple rule for growing things out here (this rule applies everywhere but is more obvious in the arid west): if it doesn't get water it doesn't grow. Early settlers fought their neighbors over water rights knowing that land without water wasn't worth a plugged nickel. In addition to fighting, they went to work and figured out ways to divert and contain spring runoffs, rainfall and the flow of rivers and creeks to use in dry times. They built dams that created reservoirs then built a network of canals and ditches to get the water to the fields. Wallah! Arid desert became fertile farmlands. Fly over the west today and the benefits of the reservoir and resulting irrigation are obvious in the green irrigation circles that dot the land.

Now think about your marketing and advertising efforts. Paying for advertising can feel like paying somebody to do a rain dance--you're not at all sure what you are going to get. But sometimes there is no choice. So you pay and with some luck some new customers fall from the sky. With a lot of luck maybe a lot of customers fall from the sky. Then comes the moment of truth: do the customers run off like a flash flood leaving only a little green in their path? Or have you built a customer reservoir that they peacefully flow into to be tapped again and again ensuring green for many years to come?

How do you build a customer reservoir? First let's be clear, the reservoir metaphor only goes so far. While it is possible to build a dam to trap water, trying to trap customers is a recipe for disaster. Your goal is not to trap but to create something customers want to be, and remain, a part of. Here are some suggestions:

  1. Be remarkable-Find out what is most important to your customers and then be absolutely amazing at it.

  2. Be inviting-Identify your customers and invite them to be part of something great. Make it easy for them to join.

  3. Be persistent-Make the effort to stay in touch regularly, if you don't someone else will.

  4. Be contagious-Make it easy for your customers to tell their friends about your business.

  5. Be attentive-Ask your customers what they think, listen to what they have to say, and continue to make your business even more remarkable.

The early western settlers learned quickly that without reservoirs they couldn't survive. The same is true of business today, rain dances alone aren't sufficient.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

Zero to $2 Million in One Year!

Zero to $2 Million in One Year!

Another example of the power of promoters. Shade Clothing sells undershirts for women that are longer than normal for those that aren't interested in showing the world their belly button. It was founded in September 2004 and in its first year of business it sold more than $2 million dollars worth of modest undershirts.

Listen to this quote from Chelsea Rippy, one of the founders:

Our main source of advertising is women telling other women.

In addition to selling through traditional retail channels, Shade focuses on finding promoters and giving them the tools, and the incentive, to spread the word. They call them "personal shoppers." From their website, here are the benefits of becoming a personal shopper:

Become a Personal Shopper and:
• Earn 15-20% commissions on all orders placed through you.
• Earn commissions on client orders placed online using your personal shopper code.
• Offer your clients access to exclusive products and discounts.

Additional benefits include:
• Set your own schedule
• Your parties posted on the Shade Clothing website
• Sales materials from Shade Clothing
• Discount on product
• Exclusive access to the Personal Shopper Online Management System

In return, Shade gets literally hundreds of customers that love their product, telling their friends and associates about it. Hard to argue with the results.

The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more

The Power of Staying in Touch

The Power of Staying in Touch

In the cluttered marketplace we compete in, I don't think the power (and necessity) of staying in touch can be overemphasized. I learned the lesson again last week--thankfully in a good way. It had been a while since I had heard from one of our clients at PromoterZ and so I sent him an email and invited him to go to lunch. We had a nice chat, I asked for feedback on our service and he had a few suggestions (I'm happy to note that we followed through on them). I ran a new idea we're working on past him. He liked the idea and agreed to let us test it with his customers. Then he mentioned that their franchising operation is taking off (looking for a good franchise opportunity? Check out Entrees Made Easy) and there might be an opportunity for me to tell some of their new franchisees about PromoterZ. Turns out the timing was perfect, and I'm scheduled to present to some of their new franchisees next week on how to turn customers into promoters.

So what did I get for my $30? Our product, PromoterZ, is now better thanks to his feedback, we have a place to test our new concept (more on that in future posts), and I have the opportunity to tell new franchise owners how much PromoterZ has helped Entrees Made Easy. Where else could I have got that kind of return on my money? Thanks Brandon!

They say it costs 5 to 10 times more to sell to new customers than it does to sell more to current customers, and yet what percent of our effort is spent looking for new customers vs. pleasing and staying in touch with our current customers? I was able to take Brandon to lunch, but that is not always geographically possible. A phone call works great. It can be as simple as, "how are things going?" Use technology where you can. Without exception, each time we send out our newsletter we get one or two phone calls from customers--they had been meaning to call but never got around to it until the newsletter arrived in their inbox. Here are a few other ideas:

• Send 1st timer customers a special thank you
• Send birthday greetings
• Send a newsletter
• Send Holiday greetings (Did you know today is Chocolate Eclair Day?)
• Send thank you notes

Finding new customers is tough and expensive. Once you've got a customer, hold on to them by staying in touch. I can guarantee you if you don't, somebody else will.

The average American consumer discusses brands 56 times a week. Are they discussing yours? Learn more

"We took our eye off the customer."

"We took our eye off the customer."

That is a quote from Mike Duke, the chief executive of Wal-Mart's international division attempting to explain why Wal-Mart has had it's hat handed to it by Tesco the leading retailer in England. How have they done it? In a nutshell by understanding their customer and giving them what they want when they want it.

According to a recent article in the Wall Street Journal, Tesco has twelve million members in its Clubcard program which gives cardholders discounts in return for their name, address and other personal information. Tesco then actively mines the data they collect to make operational and strategic decisions. It seems to be working. Tesco has 31% of the grocery market in England, nearly double that of Wal-Mart and next year Tesco plans to invade Wal-Mart's home turf by opening stores in California.

When Wal-Mart entered the British market, Tesco turned to its databases and searched out customers that always buy the cheapest item. They identified 300 items that these price-sensitive customers buy most often and lowered the price on those items. The result: customers didn't defect to Wal-Mart.

Every three months, Tesco uses its data to send a packet of coupons to its customers. The packets typically contain three coupons for products the customer buys regularly and three for goods that the customer might like, or that Tesco wants them to try. Fifteen to 20% of all Tesco coupons are redeemed, the typical industry average is just 1 to 2%.

What can a small business that can't afford to put a big loyalty card program like Tesco's into place learn from Tesco? Here are a few things:

  1. Information about your customers is valuable and is worth giving a discount to get. Some of our customers at PromoterZ have wondered if they should give a discount coupon to a customer every time they give feedback. Our position is always the same: yes! The information is invaluable. Where else are you going to get it? Even if every customer gave feedback (which they never will) and got a discount, you would still be in a better position to compete because you would understand your customers better.
  2. Use the information you gather to stay in touch in appropriate ways. Tesco sends out coupons that it knows its customers want to receive. In your efforts to stay in touch with your customers are you sending what your customers want to receive or what you want to send? How can you know what they want to receive? Go back to number 1 and ask them. One of our PromoterZ customers, Sport Clips, uses the system to send first time customers a coupon just in time for the next haircut.
  3. Focusing on understanding customers and meeting their needs is powerful--so powerful it can even beat Wal-Mart!
The growth of your business will be determined by what your customers say about it. Do you know what they are saying? Learn more
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