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Business culture Business Resources Customer relationships customer retention Customer service Hospitality Improvement quality Restaurants Retail service Small Business The Slight Edge

Help them help you

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During a recent road trip, I encountered this sign in a rest room entryway at an Oklahoma Turnpike rest stop.

Below the sign was a standard wall light switch.

While I didn’t test it and hang around to measure response time, it’s a nice idea that allows customers to help a business’ staff become aware of problems more quickly than their periodic monitoring might reveal – particularly at a very busy highway rest stop where a mess might be just around the corner.

The longer that new mess hangs around unaddressed, the more likely it is that it will make a bad impression on a visitor. While not foolproof or automatic, the switch is one more way to build in systems/processes that can improve the business environment.

What systems, tools and processes have you established that enable your customers to help your business?

What about your products and services? Depending on the nature of them, it’s possible for them to alert you to situations you should be aware of that will improve your business and how it’s perceived.

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Rather than sweep, eliminate the source of dirt

During the Amazon Web Services (AWS) Re:Invent conference‘s “fireside chat” with Jeff Bezos, he told a story about during a professional development session where he (like all senior Amazon management) spent two days on the Amazon customer service call center staff.

Stop for just a minute.

If your business is small – you likely spend time on customer service, even if not by choice.

Depending on the size of your business, you’re might be insulated from your customer service people and likely from your customers. While it isn’t something you want to do every day, I assure you the value of doing what Amazon senior management does here is sizable.

Listen to the quality

I’ve sat within earshot of my customer service staff. You learn a lot about your quality. Sometimes you learn things about your quality that runs a chill up your spine – but that’s better than not knowing.

That’s what Bezos learned.

During the session, he handled calls and operated the customer support system while being coached through the process by an experienced Amazon customer service person as each customer called in.

While this had to be hugely educational for him about unmet needs and/or streamlining processes for his customer service team, he learned a unexpected lesson – how things really work when it comes to product quality at Amazon, which gave him an idea to improve quality and do so before the cost of low quality grew.

Listen to Bezos describe the result – how Amazon now handles poor products, poor packaging and enables their staff to communicate quality information (and make decisions) about them – much like Toyota’s assembly line allows anyone to “pull the cord” to stop the line to deal with a defect (2 minutes, 47 seconds from 18:01 to 20:48):

 

Can your sales/service people pull a poorly-made or poorly-packaged product off the sales floor? How long will you sell a lame product or perhaps worse – a good product delivered poorly – to your “valued customers”?

How would this impact your buying process and related contracts? How would this impact your product quality and delivery feedback processes? Note Bezos’ use of the un-word “systematize” – not just making more work, but making a new system to make the work and customer experience better.

If you don’t do these things (in your own way, of course), are you willing to deal with the disadvantage this creates between your business and businesses that handle this as Amazon does? What else could you do rather than this to assure the same level of highly-consistent quality of products and packaging?

Remember, this isn’t about replicating what Amazon does. The important thing is to replicate or improve upon the results.

Doing the right work

While discussing a week-long Kaizen (quality) professional development training session, Bezos talks about a Japanese consultant who chastised him for sweeping up some dust on the warehouse floor (1 minute, 54 seconds from 20:49 to 22:43):

 

Eliminating the source of dirt is more important than finding a better janitor or a better broom. Obvious, once you think about it.

Smart businesses regularly do something new and different in their market, producing really good results.

I don’t mean not-so-thoughtful act of cloning a service or a product. I’m talking about the processes and systems that a strong business depends on and eventually turns to as a strategic advantage. Might be a sales or marketing process, might be front or back office.

Once the value is shown, even of a non-obvious system/process, why wouldn’t these things be duplicated by business B when they see business A gaining value from them?

  • Sometimes the new system/process was intentionally designed to be complex so that it would be hard for competitors to duplicate.
  • Sometimes those complexities don’t impact a small local business but a parallel business need for a similar system still exists in that business that should be considered.
  • Sometimes we have this odd tendency to watch someone do something great and stop right there because it’s so easy to assume that we can’t do what others have done.
  • Sometimes the lead isn’t followed because of ingrained beliefs like “Yes, but that’ll never work here.”

What’s your reason? What system would transform your business front office? What would transform the back office? These things don’t have to be massive or expensive. As one of my mentors says, “Little hinges swing big doors.”

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attitude Business culture Buy Local Customer relationships Employees Management Point of sale Restaurants Retail service Setting Expectations Small Business

Tactical caring

I don’t talk about “b word” too often, but branding is really what a lot of our discussions are ultimately about.

One of the more incisive definitions of branding that I’ve seen is “What people think when your business name is mentioned”. If that doesn’t cut right to the bone, I’m not sure what does.

A recent branding discussion between Justin Kownacki, TD Hurst and myself eventually settled into talking about businesses using “looking like we care” as a tactic as opposed to actually showing that they care. So here we are.

Take a moment

Consider the places you do business with. What’s the first thought you have when you think of them? One of the things that comes to mind for me is “Do they care about my business?”

In other words, is my business important to them? No, my business probably doesn’t keep the local watering hole or pizza joint open all by itself, but do the folks who run and work in those places (and others) give me the impression that they know I could have gone somewhere else?

Not far from my parents’ old place in Plano Texas, there’s a pizza place owned by a Greek family. My parents would almost always take us there when we went to Big D to visit. No matter how busy that place was, the owner always made a point of taking a moment to come out from behind the counter to greet us at our table, welcome us to his place and “visit”, as my grandmother called it.

While this wasn’t necessary, it was a painless, cost-free way to recognize a regular customer by simply being friendly without being mechanical. It only took a moment, but it meant a lot. How do you know? I haven’t visited Dallas in almost ten years. My parents moved.

Yet almost 10 years later, I still remember the impression left by a balding Greek patriarch who was proud of his place and happy we chose to have dinner with him.

If you’re the recipient of this kind of attention, you’re aware of the night and day difference between that and the “tactical caring” you’re used to receiving.

Which kind of care does your business serve up?

Do they or don’t they?

About those places you considered earlier…Do they care? Or do they do things to look like they care?

What’s the difference?

  • Looking like you care: Including a photo of a USB cable on the instructions included in my new printer’s box so you can save the 48 cents per sale that the cable and its packaging cost.
  • Showing that you care: Including a USB cable and charging a dollar more for the printer to save your client a 20 minute trip to the store.
  • Looking like you care: Saying a mechanical “Thanks for coming” as I leave. “Mechanical” because I hear you say the same words to everyone, right after the bell above the door frame jingles.
  • Showing that you care: Thanking me before the bell jingles, and doing so by using my name or some other personalized message that doesn’t get repeated to the next 41 people who leave after I do. Also…thanking me later, via email, a postcard, text message or by somehow rewarding my visit – even with something that costs you nothing. Remembering that I’ve been there before and making note of it, even if you don’t remember my name.
  • Looking like you care: Smiling at my four year old granddaughter when we enter your store, even though you sell nothing she’s interested in.
  • Showing that you care: Smiling at my four year old granddaughter, kneeling down to her level and saying “Hello, young lady”, even though you sell nothing she’s interested in.

It’s OK

Training your staff to look up from the cash register and grunt when a customer enters is transparent, repetitive motion, tactical caring. Stop it. If people needed random grunts to make their lives more fulfilling, they’d install iGrunt on their phone.

Training your staff to take a brief moment to greet someone personally is scary. Do it anyway. Yes, it’s common sense. So why aren’t your people doing it?

The election cycle is behind us. It’s OK to care again. Just don’t grunt.

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attitude Business culture Customer relationships customer retention Customer service Employees Getting new customers Leadership Sales service Small Business Word of mouth marketing

Stop worrying about your commissions

Recently I was doing a little business with a large Microsoft distributor – a sale that required a license agreement.

Initially, the deal couldn’t be finalized because I use a PO Box for my business address. Trouble is, they “don’t allow” license agreements with a business that uses a PO Box.

Irony: That I can easily send money directly from my bank to the Caymans (or pretty much anywhere) from my iPhone, but heaven forbid that I receive paper business mail to a PO Box housed in a United States government building. But I digress.

When I provided a street address (one that cannot receive USPS mail – which the distributor/manufacturer will likely attempt to use for mail if history repeats), the salesperson’s autoresponder email came back to say he would be out for the next four days. It’s always nice to know when my rep is not going to be around and I appreciate the effort to inform, but it has absolutely nothing to do with the fulfillment of my order. We’ll get back to that.

Follow up

My reply included the requested info and a comment about PO Box use by rural businesses. The response? An automated order fulfillment email from the manufacturer. I received nothing from the distributor who fulfilled the sale or the salesperson. Salespeople – This is a missed opportunity to follow up and learn more about your new customer. It is not me encouraging you to deliver a prefab sales pitch.

The PO Box thing annoys both because my business uses one and because it’s patently stupid to decline to accept them. A fair number of businesses that I’ve interacted with over the years have claimed they can’t accept a PO Box as my company’s official business address.

Their party line is “companies who use a PO Box are more likely to commit fraud and PO Boxes are not secure“.

When I give them my “suite number” at the local UPS Store as my physical business address, I can see how that completely eliminates the possibility of fraud. As for “not secure”, given that a PO Box is in a Federal building under multiple locks and keys, it’s probably less secure than a street-side box that you can drive up to and whack with a ball bat.

Sarcasm aside, this isn’t about PO Boxes. They’re simply a good example of an excuse.

Excuse vs. Reason – What’s the difference?

The words uttered by a salesperson that most frustrate a customer tend to be excuses rather than reasons.

“Your salesperson is out of town till Tuesday” may be true, but it’s an excuse because that absence has nothing to do with order fulfillment/delivery. Fulfillment is a process owned by the business (not the salesperson) and is completed for the customer’s benefit, not the salesperson’s.

Can the salesperson pay attention/follow up to make sure nothing goes wrong? If they’re smart, yes. Should the process be dependent on the salesperson not being out of town? No way.

Some might say that “It’s his order, his relationship, he has to personally handle anything related to the sale in order to earn his commission.”

They’re wrong because they’re worried about the wrong thing. While you may not get the commission from Mary’s sale by helping her client when they call or email, the commission from her sale helps your employer as much as your sales do. Not helping that customer doesn’t hurt Mary, it hurts your employer.

Stop worrying about ownership and commission. Notice that I didn’t say stop worrying about commissions (plural) – I mean stop worrying about each individual one as if they are some combination of birthright and sovereignty.

Worry about the right thing

So what should you worry about? Helping your customers eliminate their worries. Make their lives easier.

Do so and you’ll have more and better customers who stick around. You’ll get more referrals. You might end up training/managing a group and get a commission from their sales. Then you get to focus on training them to take better care of the customer.

Never forget that the reason to make the sale is to get/keep a customer. Not the reverse.

Get customers and ignore them? No. Get, cultivate, care for and keep them.

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Automation Business culture Competition Corporate America Employees Improvement Leadership Management Restaurants Retail service Small Business

Is there something more important that they could be doing?

Most of us who use computers in our work do so because they relieve us of tedious work or eliminate slow, inefficient, error-prone techniques for producing our work, even if we do have fuss with drivers and hardware failures once in a while.

In the newspaper business, I doubt anyone wants to return to the days of working with sheet film, X-Acto knives and the Gutenberg press.

While it would be fun to create something once in a while using the movable type of almost 600 years ago, do we really want to word wrap by hand, day in and day out?

The computers we sometimes love to hate help us keep track of financials and inventory, they help us communicate with customers, vendors and prospects and so on, but they could do so much more.

Look around the office. Is there someone doing a job on a computer that could be performed by someone with little or no training? Is their work repetitive? Do they have to have distinctive knowledge about your business, your market or your customers to do this work?

There might be something out there (free or otherwise) that could either replace that work or make it far more productive, freeing that person up to do more important value-creating work for your business.

It’s common sense, but we get so busy doing the everyday that we frequently miss the opportunity to ask ourselves how some of those processes could be improved – and it isn’t just about computers.

Your micro economy

The same is true of most repetitive work that doesn’t require knowledge of the market – and the work isn’t limited to “mindless” repetitive things. Some of these jobs simply must exist, but a fair number of them could be done by a system, machine, software or similar – and done at a lower cost with more consistency. Consistency and cost aren’t the only factor. When you have people doing these jobs, those jobs are at risk because they *can* be replaced by a system, machine or software at your competitor – who will then put pressure on you via improved speed, consistency and perhaps better pricing.

It isn’t just about your business being more efficient. It’s about the micro-economy that your business creates being stronger and more resilient. That economy involves you, your suppliers, your employees and/or contractors and their families, your landlord if you rent or lease space, and so on.

When you create a job, it’s a great day. It means many positive things. Yet we want to be careful to create jobs that deliver as much value as possible to our businesses and to our customers. Jobs that CANNOT be easily replaced by the aforementioned system, machine or software.

The easiest way to afford that is to replace the ones that can be replaced. When we do that, we create opportunities for our businesses and our staff. The other thing this does is create jobs that are difficult to devalue. Devalued jobs are too easily discarded because they don’t create enough value. You can’t afford them. They’re “overhead”, not value creators.

Learn from Undercover

In the show “Undercover Boss“, the plot is always the same. The CEO of a large company leaves their office, dresses up like a line worker, does “real work” with their line staff for a week and realizes that their focus on their front line has been lacking.

They learn that the money they think they’re saving by not updating equipment, improving systems and training staff are costing them dearly because they’re impacting the quality of their products, services and/or experience their customers.

The now eyes-wide-open CEO then makes changes that usually involve training, equipment and systems. They see how much time a wasteful process or an outdated piece of equipment costs them as it is multiplied by every person who does that job. It reminds them of something they knew when they got into this business – and what might once have been the difference for them – that the effectiveness of their line employees are critical to their success.

Ask your line employees one question: What would help you do your work better, faster and with more consistency without losing quality?

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Amazon Automation Business model Business Resources quality Regulation service Setting Expectations Small Business strategic planning systems Technology

How to keep cloud service failures from affecting your business

You look at those prices for Amazon cloud services and think you’re getting a deal.

Fact is, you are. You’re hiring a professional staff to run your systems in a very-high-quality environment and paying little for it.

But are you using these cloud services in a way that protects your business?

Forbes analysis of the Northern Virginia Amazon cloud outage from Friday’s storm doesn’t clarify who does / doesn’t use the NoVa cloud site vs. who had a better redundancy setup.

Netflix and Instagram are likely re-examining their use of cloud services. I doubt they’ll eliminate Amazon as what happened in Northern Virginia can happen anywhere. They’ll likely discuss cost-effective means of increasing redundancy that leave them less sensitive to single location failures.

Questions to consider

Redundancy with transparent switchover to backup systems with no data loss is ideal. Do you need that? Can you afford it?

Ask the right questions when designing your use of cloud services:

  • How much downtime are your customers (internal or external) willing to tolerate?
  • Do you know what an hour of downtime costs internally (lost productivity, inability to serve customers) and externally (refunds, lost customers).
  • Given those costs, how much downtime can we afford?
  • What notification mechanisms do you need to have in place to switch? (or is the switch automatic?)
  • What do I want to happen when a failure occurs?
  • What am I willing to pay for my desired level of redundancy?
  • What will a failure that doesn’t use this level of redundancy cost my business?
  • How do you switch to the redundant system? Is it manual? Transparent?
  • Does your vendor offer redundancy? How does it work?
  • Are your vendor’s redundancy sites geographically dispersed?
  • How does my data get replicated?

This really isn’t about Amazon. It’s necessary to protect your business whether you use Rackspace, Amazon, Microsoft Azure or other cloud services. The key is knowing what you want to happen when a failure occurs and designing it into your processes.

Why not keep it all in-house?

It’s tempting to keep your data in-house. It somehow seems cheaper and there’s the impression that it’s more secure. Evidence indicates locally-hosted data has its own risks.

Locally-hosted systems have a single point of failure. I’ve had clients whose businesses have burned or flooded and others whose servers were stolen. Without a remote location to transition to, you’re down. Can your business handle that? If so, for how long?

Security

Security of internal business data is a concern with cloud vendors. High-quality cloud vendors obtain security certifications like SAS70 (financial industry), HIPAA (health care) and PA-DSS (credit cards), which require regular audits to ensure continued compliance. Companies who keep their data internal are subject to them as well – yet they still suffer data loss.

Local data storage doesn’t allow you to escape expensive HIPAA or PA-DSS compliance if those requirements apply to you. In the financial industry, systems are sometimes subject to examination by the OCC (Office of the Comptroller of the Currency) and/or other agencies. But that doesn’t prevent data loss.

Regardless of system/data location, security should be designed into business processes rather than added as an afterthought.

Electrical power and internet

Cloud vendors use industrial-class electricity supplies with diesel backup generators. Their investment in these backup systems vary both in capacity and available time-on-generator, so ask for details. A site’s ability to run on diesel for two weeks isn’t nearly as important as your ability to switch to another facility in two hours…unless they don’t have two hours of generator time.

You can (and should) use an uninterruptible power source (UPS, aka battery backup) with automatic voltage regulation (AVR) to protect your local systems, but you’re still face internet-related downtime if remote staff/clients need to access locally-stored data.

Cloud vendors have multiple very-high-speed internet providers so that they are not subject to pressure from any single vendor and so that a single vendor’s downtime doesn’t bring the entire location down. You can do the same, but most small businesses don’t. If remote connectivity is critical to your business, it’s a smart strategy.

Whether your systems are local, cloud-based or both – plan for what happens when the lights go out. It just might save your business.

 

 

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Business culture Competition Customer relationships customer retention Getting new customers Positioning Restaurants Retail Sales service Small Business

Do you know what you’re going to get…before you get it? They do.

The difference between customer’s expectations and what a business delivers is the source of so much pain for business owners.

It’s pain that’s preventable. EASILY preventable.

How? By helping set a customer’s expectations in advance: Before they do business with you. Before your next delivery. Before your service person shows up.

So think about it… How are you setting/adjusting customer expectations?

If you don’t set them, you get to try and meet unknown expectations.

Which situation is better?

Do you want customers assuming less of you than they will get? If so, they might go somewhere else before you get a chance to earn their business.

Do you want customers assuming far more of you than they will get? If their expectation is far above what you usually deliver, you’re setting them up to be angry. Every single time.

Helping customers form expectations (“the blueprint” Tony refers to) in advance before they form their own is critical because you have no idea what their own expectations will be based on – but you can be fairly certain they won’t match.

Ronald is consistent

A perfect example of this can be seen when you consider people traveling: They take their family to dinner at a franchise restaurant (like McDonald’s). Frequently, it’s a restaurant that they could visit any day of the year because there’s one in their hometown.

Why? Because they know what to expect. It’s one reason why franchises and corporate restaurants/hotels do well. Expectations are already in place and more often than not, get delivered because of the systems in place that are, in part, designed to deliver consistency from location to location.

When you run a local hotel or restaurant, it’s just one of the things you’ve got to overcome.

How do you set expectations in advance? It touches on everything you do, from advertising to delivery and follow up.

A little Tony

This video is about meeting your own personal expectations, but the parallel will be obvious. It does a great job of showing how truly, deeply powerful expectations are and why we talk about them so often.

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Business Ethics Customer relationships Customer service Feedback Marketing Positioning Restaurants Retail Sales service Small Business Software business

The two most valuable parts of a conversation

Every single day, I see problems that would be solved with better (or any) understanding, speed and an order of magnitude improvement in quality if people would just pick up the phone.

I know, especially the more technical folks out there, you want that cocoon. You want to hide and just create. Some of you might even want to focus rather than hop back and forth between your IDE, Skype, Facebook and so on.

When you’re in that mode, the phone is the last thing you want interrupting you (the interruptions are not necessary but I’ve said plenty about that in the past).

Thing is, if you don’t talk to the customer, don’t watch them use what you create, you’re missing a massive piece of the equation.

They’ll never tell you everything in a tweet, email or wall post. Never, ever. They might be meaner because of the nature of the media, but you’ll never get the whole story. You’ll never see the gleam in their eye or the song (or despair) in their voice in an email or other online message.

Don’t get me wrong – those media are important, but they aren’t as rich as you need at certain times.

Are you “Unknown” or “Blocked”?

Yesterday, I had some work done on the Mrs’ chariot and they called me to tell me it was ready.

Thing is, they called me from a number that shows up on caller id as “Unknown”.

Business owners and those-in-charge-of-telecom – NO ONE wants to talk to whoever is calling when the phone says “Unknown” or “Blocked”, particularly in an election year.

I see this regularly on customer service feedback loops, customer “your (whatever) is ready” and even SALES calls.

If the relationship you have with people requires “Unknown” or “Blocked”, I wonder why you bother to call. You have work to do on your customer relationships.

Want them to answer

Unless I’m missing out on a management secret that involves making phone calls that you don’t want answered (maybe a push poll would count there, but this isn’t a politics blog), your goal should be to get the phone answered by your customer – NOT to have it ignored.

You want to talk to them. Make it easy. Create a relationship that makes them glad to see your name on the caller id.

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Business model Competition Customer relationships Getting new customers Improvement Lead generation market research Marketing Positioning Restaurants Retail service Small Business strategic planning Strategy

How to find their path from new customer to great customer


Creative Commons License photo credit: c_ambler

Last time we started a conversation about growth and left it off with a brief discussion about digging deeper into customer behaviors.

In particular, we were starting to look at the behavioral signals that indicate your best clients or simply the signals that show they’re about to become a customer. Either way, it’s valuable information to have.

To continue from where we finished last time, let’s turn one of my final comments from the last piece into a question: “What behaviors identify a person about to buy?” and “What behaviors identify potential ‘ideal’ clients who are already a customer – but haven’t transformed into that ideal customer quite yet?”

Order history helps

When we’re looking for behaviors that indicate what a great (“fanatical”, to use Rackspace’s lingo) customer is, one place to look is order history.

Your order history is rich in information that can help your detective work on buying signals and customer behavior.

I know, you want some examples of what you might look at. From gut feel, identify your five best customers, using whatever means you use to determine “best”.

Your business may not fit all of these questions I’m about to ask, so look at them in a way understand that they might require a slight adjustment. It’ll depend on what you sell, how you sell it and how rich your product line is.

The questions:

  • How often do they buy from you? In other words: What’s the average number of days between purchases?
  • Does transaction size increase over time or does it shrink over time?
  • Of the customers who buy everything you offer, do their purchase intervals or transaction sizes “look different” than everyone else’s (on average)?
  • If your best customers don’t buy everything, what do they buy that no one else buys? Of those people, study the behavior prior to that particular purchase. What did they ask? What did they buy just before that?

Now…looking at the patterns that these “best” customers have established, what *existing* customers fit the early part of those patterns? These are the customers who are likely to join the “best customer group”. The difference is that you know the candidates in advance.

Not all of them will move into your best customer group, but in watching this process/movement, you’ll eventually learn what behaviors indicate that move.

Interaction clues

Look at your interaction data for each class of customer. When I say “class”, I mean your best customers, your newest customers and so on. You need to look at each because you’ll need to be able to detect a behavior that occurs when a customer moves from one to another.

When they do that, they’re sending a signal. Your responsibility is to act on it.

Interactions include sales and support inquiries, price list requests, orders, email (including subscribes) and the like. Remember “guinea pigs” vs. “guinea pig” from last time? Your most important indicator of “I’m going to be a great customer” could be that subtle.

Interactions and order history indicate future behavior. Your best customers’ behavior is there and shows patterns along the road to “BestCustomerVille”.

Misunderstanding metrics

By now you’re probably wondering about the not-too-standard things that I’m suggesting you observe. What about standard metrics? Where do they fit in?

Standard metrics, like the number of customers you have, the number of leads you have, the number you add each day/week/month, sales this month vs. last month and so on are certainly worth looking at, but remember that they primarily indicate *where you are*, not what you need to do to (re)produce those gains.

What do you learn from knowing that you have 1344 customers today and that you had 912 customers this time last year? Unless you look in the context of what resulted in the net gain of 432 customers, you learn little that allows you to reproduce that gain.

That’s what you want to know and repeat.

A “You are here” marker doesn’t help much if you don’t have a map. The behaviors we discussed are part of the map that shows you the path from new customer to great customer.

THAT is why we’re talking about behaviors. They are the invisible signals you have to detect.

 

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Business model Competition Customer relationships Direct Marketing Getting new customers Lead generation market research Marketing Positioning Retail service Small Business strategic planning Strategy

A conversation about growth

Recently I was involved in a conversation on producing business growth.

The discussion revolved around what to measure about the business in order to keep track of the growth.

A few things to start:

Don’t make things complicated. Be sure that you’re measuring the right things. Historical data has some value but the good stuff – the transformative stuff – tends to revolve around things that indicate future behaviors (or not) of your customers.

When the conversation started, I referred to a few blog posts to help the conversation move into the right frame of mind about how to be thinking about growth, including:

http://www.rescuemarketing.com/blog/2011/02/01/business-model/
http://www.rescuemarketing.com/blog/2011/11/15/the-basics-of-business-arent-basic/
http://www.rescuemarketing.com/blog/2010/10/07/just-one-thing/

In these conversations, there’s often a struggle with *where to start*. Ask yourself what’s important.

The answer in this case? Getting more customers.

Getting customers

Working on the assumption that “customers” meant getting new ones, I asked what clues prospects give that they are going to become a customer. Remember last week’s discussion about “invisible” signals? Customers/prospects give signals as well.

I didn’t really get what I was looking for regarding buying clues, so I started thinking about a way to reword the question. Why? Because lack of good answers tends to indicate that I’m not asking my question with the right words (think about that positioning vs. the more common “my customer is an idiot” framing that some default to).

Before I could reword the question, I was asked how one finds out what a person does before they become a customer.

A few answers might be: They become a lead. They join your email list. They ask you to send your newsletter. They call and ask for a brochure or prices. They stop in and kick the tires. Each of these sometimes subtle behaviors will signal where they are in the buying process.

Speaking of subtle, there’s a notable case where incoming Google searches in plural (ie: “guinea pigs”) were almost always new leads just starting to investigate the topic and singular searches (ie: “guinea pig”) were almost always searches done by people who were ready to buy.

You can’t get much more subtle than that. Paying attention to what your leads and customers are doing at that level was enough to substantially transform a website user’s experience and vastly improve sales. That’s the kind of signal that can transform everything.

If you think about these behaviors, you can come up with the things people say to you when they contact you or visit your business. They might say “Yeah, we just had a new baby so we’re looking for a new car / looking for a new house / buying carpet / selling our motorcycle or however they do business with you.

You know the clues, but you might not be thinking of them in that way.

Getting a plan

It’d be great if there was a single “golden spreadsheet” that every business could use to figure out these things. Unfortunately, it doesn’t really work that way.

While numbers like cost per lead (CPL), cost per customer (CPC) and lifetime customer value (LCV) are absolutely critical for every business because they tell you which lead sources send you the highest quality customers, how much you can afford to pay for advertising and much more – they don’t tell the whole story.

Many businesses ignore LCV and try to pay as little as possible for advertising. Trouble is, LCV is a very important number in the big picture of your marketing and metrics because it reflects buying behavior.

That behavior is what you have to decipher. Like the analysis of lead sources, such as which leads give you customers with the highest LCV, which leads give you the customers who have the most returns; behavior of your existing leads and customers helps you find more of the “right kind” of customers.

Customers and prospect behavior frequently falls into patterns. While there are always exceptions, it’s wise to identify a sequence of behavior – particularly for the folks you most want to have as customers.

Digging deeper

Getting more customers is sometimes (not always) the easiest way to raise more revenue. The other two most common ways to increase sales are sell more to your existing customers and sell in bigger transaction sizes. To do that, you have to know more.

Study what your most profitable customers buy, how often they buy and how long they wait to buy after you introduce a new product (or make an offer) to them.

Sometimes these folks simply buy everything you make, it’ll depend on your business. Sometimes they buy the best products you make. Your order data will reveal much more than the Magic 8-Ball.

These steps will often help you understand who is, but hasn’t yet transformed into, that ideal high-profit customer.

We’ll hit this topic more next time.