Business model Competition Customer relationships customer retention Getting new customers market research Marketing Positioning Small Business strategic planning

Show them the ladder

On many occasions, I have advised you to offer higher-priced, higher-value products and services because they focus you on high-lifetime-value customers whose loyalty extends beyond what’s on sale this week.

Likewise, we’ve talked about using those higher-priced products and services to “subsidize” the value-priced part of your business so that you can find more high-lifetime-value clients from that group.

What I’ve been urging you to do is build a customer ascension ladder.

It’s not like you haven’t seen this before. You’re probably on several of them and might not realize it. Despite that, it’s entirely possible that you haven’t used it strategically in your business.

Ladders you know

Take a look at Kraft cheese.

If you want sliced cheese in a wrapper, you might buy Kraft Singles. In their product ladder, Velveeta Slices are a bit of a luxury item. To step beyond that, you have to go to a higher-priced Kraft brand name like Cracker Barrel and you might have to slice it yourself.

Some of you might never buy these brands, but if you buy cheese, you’re in another vendor’s cheese ladder (Kraft may own them too).

A simple ladder that everyone is familiar with is car brands.

Ford Motor Company has Ford, Mercury and Lincoln. General Motors has Chevrolet, Pontiac, Buick and Cadillac (among others). These brands illustrate simple ascension ladders.

Back in the olden days, your typical Chevy customer longed to step up the ladder and get a Cadillac someday and in fact, doing so was a sign to their co-workers, friends and family that they had “made it”. Likewise, many Ford customers longed to own a Lincoln Continental.

Today, things are bit more muddled in the car business and these things aren’t the universal success/status symbols like they once were. F250’s, Hummers and Escalades have supplanted them to some extent, illustrating that the idea and the desires are still valid.

Where’s your ladder?

What works for Kraft, Ford and General Motors also works no matter what you sell.

The ladder works for firewood, imported crystal, septic tanks or legal services…and for whatever you do.

Whatever you sell, you can usually sell more by designing an ascension ladder for your customers. It isn’t just about selling more, more, more. It’s about matching what your customers want to what you sell…which tends to make you sell more.

If some of your customers need/want an Escalade and all you sell is Yugos (the “Mona Lisa of bad cars“), you’re going to lose them. If selling Escalades isn’t your thing, that’s fine. Even so, deal with it strategically as you should know how long this progression takes based on customer

You may already have a makeshift ladder in place. It isn’t like “good, better, best” is some sort of secret of brilliant business owners.

What you seldom see is a business strategically designed to move people from through the tiers of “good, better, best”, identifying the most likely “best” buyers based on their behavior, buying habits and other factors (such as demographics and psychographics).

Designing your ladder

Take a hard look at your customers from end to end. Do the same with your prospects, who tend to be substantially different from your long-time customers.

For example, consider the differences between a customer of 20 years who is starting to think about retirement and a customer who just got their first job. Their needs, values and *what* they value day-to-day might be completely different as it relates to your products and services. “First job” is just one example and may not have any impact on their choices for what you sell. Something else definitely will, so pay attention.

If you take this task seriously, you should be able to segment your customers into groups based on any number of things from age-based needs to buy frequency to number of calls for help. You may find that there are correlations between any of these individual segments.

What you’re looking for is segments that would respond positively to the same message, the same product/service offer. Other customers might use a different version of the same service that may not interest this particular group. Thus, the importance of the message/offer.

Next….Show them the ladder you’ve designed.

Photo credit:

attitude Business culture Competition customer retention Customer service Employees marketing to the affluent Marketing to women Small Business The Slight Edge Word of mouth marketing

Oil and windshields

Gas Pump
Photo credit: Steve Snodgrass

As I noted earlier, the drive to Oregon and back provided a few lessons here and there.

Yesterday, we talked about the welcome. Today, it’s what comes after the welcome.

Oregon law requires that an attendant pumps your gas. That’s right, you *cannot* pump your own gas in Oregon. I don’t know the origin of this law, but I suspect there was an accident where a pump was left unattended and tragedy ensued. Update: I’ve been told (but not verified) that it is a jobs creation law.

When I was a kid, it was unheard of to pump your own gas, except on the farm. My grandaddy had his own tank and pump for his farm equipment, so occasionally that would get used for field equipment, but that’s the only time I remember seeing anyone pump gas when I was young. Retail customers at service stations never did so.

During visits to what was then called a filling station, the often-uniformed attendant would check your oil, clean your windshield and pump the gas.

Fast forward to this weekend. With each visit to gas stations in Oregon, there has been an attendant pumping the gas but no one has checked the oil, nor have they asked to do so, or cleaned the windshield.

When I pulled into a Safeway gas station in central Oregon on Saturday, a nice man came up and asked what I wanted pumped and then said “is the oil and windshield ok?”

That was as close as I got to what used to be called full service. I told him I wasn’t sure about the oil and left the question open. He never said another word. After a minute or so, I checked the oil myself.

I didn’t expect white glove service, and I’m not a local so the chance of me hitting that station again is pretty random…but imagine the difference if he had checked the oil (or pursued it further) and if he had cleaned the windshield.

You’d probably come back to that station, which means you’d probably visit that Safeway grocery in the same parking lot.

Is it worth it to provide that little bit of extra effort? I think so.

Imagine the other ways you could make the mundane act of getting gas into an experience. Each one is a little bitty magnet to pull that customer back and a little piece of uniqueness that might get them to talk about you to their friends.

attitude Business culture Competition Customer relationships customer retention Customer service Entrepreneurs Marketing marketing to the affluent Marketing to women Positioning Restaurants Retail service Small Business Strategy The Slight Edge Word of mouth marketing

Little, inexpensive things mean a lot

Relax, Mr. Accountant
credit: Dennis Wong

What transforms an experience from “acceptable” to “cant wait to tell my friends”?

To me, “acceptable” service starts with a smile, an effort to make sure the customer received what they came for, eye contact and a thank you.

“Can’t wait to tell my friends” service doesn’t come *before* you do little inexpensive things, it comes *because of* little inexpensive things.

That’s right – the things that transform your service to “cant wait to tell my friends” are often simple, inexpensive little things.

By themselves they might not seem like such a big deal. Below, a few examples. In each case, consider the perception of the customer.

The birthday card

  • A birthday postcard sent via an automated postcard service during your customers’ birthday month vs. no card at all.
  • A birthday postcard sent via an automated postcard service vs a hand written birthday card signed by the owner or manager.
  • A voice mail from the business owner wishing you a happy birthday, vs. a brief call to invite you into their establishment that required 4 callbacks to get you in person.

In 5 of 6 cases, a happy birthday message arrives. What’s the difference in the perception of the message?

A cup of coffee

  • A tasty cup of latte made from freshly ground, freshly roasted beans vs. a cup of latte made from coffee ground 2 weeks ago and roasted who knows when (matters to those who can tell, doesn’t matter to those who cannot).
  • A tasty cup of latte made from freshly ground, freshly roasted beans vs. a tasty cup of latte made from freshly-ground, freshly-roasted beans that is topped with latte art such as the cat you see above.
  • A tasty cup of latte made from freshly-ground, freshly-roasted beans that is topped with latte art in the shape of a fleur-de-lis to celebrate the Saints’ Super Bowl win.
  • A tasty cup of latte made from freshly-ground, freshly-roasted beans that is topped with latte art in the shape of a heart for the runup to Valentine’s Day

Doesn’t make the coffee taste better, but it does provoke someone to talk about what transformed a mundane cup of coffee (no matter how good) into something you tell everyone about, that you take a picture of with your phone and post on Facebook or Twitter, and that causes you to bring your best friend the cat lover to this place as a little surprise. Next thing you know, she’s bringing all her cat lover friends.

In the latter case, something to create a little free buzz (pun intended). Perhaps you do so before the game and give your customers a choice of the Colts’ horseshoe or the Saints’ fleur-de-lis. You can do this year-round for holidays, sports events, you name it.

The letter

  • A letter from your Senator congratulating you on an achievement, with the Senator’s signature signed by the Senator’s personal assistant.
  • A letter from your Senator congratulating you on an achievement, with the signature rubber stamped onto the letter.
  • A letter from your Senator congratulating you on an achievement, with the signature printed as part of the letter.
  • A letter from your Senator congratulating you on an achievement, with a handwritten signature.
  • A letter from your Senator congratulating you on an achievement, with a handwritten signature , and a brief handwritten PS from the Senator.

Which of these would you show to your friends? Which would you frame and hang on your office wall? Which would you keep in your scrapbook for the rest of your life? Which would you show your grandkids 30-40 years from now?

Little, inexpensive things mean a lot.  They create relationships that few competitors can hope to break.

Advertising attitude Business culture Business Resources Community Competition Creativity Customer relationships customer retention Customer service Entrepreneurs Improvement Internet marketing Leadership Marketing Motivation Positioning Public Relations quality Restaurants Retail Sales Small Business Social Media startups Strategy The Slight Edge Twitter Video Web 2.0 Word of mouth marketing youtube

@GaryVee: Don’t be average, Average Joe

Normally, I hold guest posts till the weekend, but folks, that wouldn’t be fair to you. This video is a gift that keeps on giving and you need to see it now. Enjoy.

Whether you run a specialty retailer in Billings, a publishing company in Winnipeg, an e-commerce store in Colorado Springs, a niche business services operation in San Francisco, or something else entirely, you simply have to absorb this.

(video has been removed from the net – sorry. If I find it, I will repost the link here)

There are numerous instructive moments there for everyone and they should be drop dead obvious. It might take more than one listen, but do it.

Average Joe

If you read the comments, you’ll see someone ask “What’s in this for the average Joe?”

Beyond @gapingvoid’s “Don’t be average” comment, if you can’t easily take away a dozen lessons from this video, you really need to decompress and watch it again and again until they sink in.

Gary’s one suggestion to anyone who would challenge him in the wine market: “Be better”, suggesting that if he saw Gary Vaynerchuk in his market, he’d go after him big time.