"Customer service is today’s competitive advantage." That’s what John Naisbitt says. "US businesses will invest more than $1 billion this year on computer technology just for customer service departments." We’re not surprised. But here’s a statistic that might surprise you:
If you increase customer retention just 5% more, your profits will increase 100%.
You’re thinking, "Yes, it’s a promising statistic, but it’s a lot easier said than done." True. There’s more.
Customer loyalty is dwindling. According to John Naisbitt, so are customers. In the US population growth is projected to be 1.1% in the next twenty years. Naisbitt also informs us that we aren’t as upwardly mobile as we used to be and that our disposable income is growing only 2% every year.
Small wonder customer service is taking a greater role in business today—new ones are becoming more scarce. So what is this "vigilante consumer" and will we need to arm ourselves? Well, yes, but not with guns and knives. Let’s take a historical perspective.
Conventional wisdom always urged business to sell either to the classes or the masses. The $100,000 cars and million dollar homes would appeal to the classes—the upper ones. The Chevys and discount stores were for the masses. But then along comes a retailer like WalMart which is known for good buys and whose hallmark is superb service to whoever walks through their doors. WalMart gave the masses appreciation and recognition. "Now the masses know classes," says futurist Faith Popcorn. And that is how the "vigilante consumer" was born. Give me value, give me convenience, give me lots of attention.
The vigilante consumer-that’s you and me, incidentally- is not as contrary or dangerous as he/she sounds. The term, coined by Popcorn, simply means we have become more sophisticated and demanding. We’re pleasant and courteous, we just want value, service, convenience, the works. Don’t you light up when you know you can order what you want, when you want and get it delivered immediately?
There you have it: We consumers are diminishing in numbers and those of us left are more exacting than ever before. These changes in customers mean that for the first time in history we cannot accurately predict the future by looking at the past. If you’re one of the many businesses operating in ways that are obsolete, you’re facing a future that is almost beyond comprehension.
Don’t think of this as the bad news. Quite the contrary. This is a great time to be alive and in business. Armed with the facts, drive and an open mind, we can begin planning strategies that will bring us challenge, fun and. . . profit.
Start at the beginning
What is your philosophy, your vision for doing business? "We treat you right." "Solutions not problems." Think it through carefully and when you’ve decided design your business operations and activities to support that vision. Now, state your product or service in one simple, short sentence that everyone will get. For example, one of my favorites is: "We sell stuff with your name on it." That’s the statement of Jonathan Stone’s specialty advertising firm Another Dancing Bear Production. I had my own hair styling business for years and our motto was "It’s more than a haircut at Miss Fripp’s- it’s a motivational experience."
People do business with people they know because they’ve heard about them from a friend, read about them in a magazine. So your job is to make yourself known to prospective customers. I follow advice given to me by a client from my hair salon days. Manny Lozano said, "I don’t care if you can’t squeeze another customer or hair stylist in the salon, you still keep promoting. Because you have to keep convincing your customers that yours is still the salon to which to come." I have followed his advice and became an unabashed, relentless self promoter of my business.
If you believe in the product or service your business offers, you too will become an unabashed, relentless self promoter of it. Consider what Bill Gates says: "When you lose a customer, you lose two ways. One, you don’t get the money. Secondly, your competitor does." Doesn’t that make you jump up and start major promoting?
All I ever wanted for my business was an unfair advantage. I’m not talking about lying or cheating. Exactly the opposite. An unfair advantage is doing every tiny little thing better than your competition. In this instance, your competition can be your best teacher.
Who knows what your customers want?
In a shuttle service taking me to the airport after a speaking engagement, I began schmoozing with the driver. I asked if the guests he drove, knowing his service was not affiliated with any of the resorts, told him about their experience at the hotel. "Yes," he said, in fact, the general manager of the property where you were staying brings a box of donuts and #97 has coffee with our drivers once a month. We not only tell him everything we hear about his property, we tell him everything we hear about his competitors." Think of all the businesses that have spent a fortune on management consulting firms to find out what this resourceful general manager gets for a box of donuts and an hour’s conversation every month.
Think about who in your business knows what your customers want. Is there a service that provides you and your competitors something that might just provide you with an effective, economical market sample? I have a friend who compiled valuable information without hiring outside help.
Gurn Freeman of Federal Express hired me to speak and as I often do, I interviewed him about his experiences. He worked for UPS before Fed Ex, but before that he wanted to work for a moving company. Having no real experience with moving companies, he looked them up in the Yellow Pages and contacted 35 of the 140 companies listed. "I pretended I was relocating from Chicago to Phoenix. After each call, I wrote down what they did well, what they did badly and how I could do it better; something that would make me exceptional." Learning all that before he became one of their competitors, Gurn worked out his strategy. Wherever a prospective customer was moving to a new city, he obtained all the information available at its Chamber of Commerce. When he made the sales call, he came prepared with material none of his competitors had. "Every single time I got the business," says Gurn.
Like I said, you competitors may be your best teacher. Any of us can easily adapt the methods these two men used to our business.
Don’t overlook opportunities close to home
In your role as an unrelenting self promoter, start off in your own backyard. How many people in your office building know you and what your business is all about? Introduce yourself to people in the hall, in the elevator. Host an open house in your office for everyone in your building. Let me tell you about how I convinced Jonathan Stone to promote his specialty advertising business. A bike messenger mentioned to him that Another Dancing Bear Production had the "coolest" office in the city. That’s because the first thing you see when you walk in the front door of Jonathan’s office are the 10,000 samples displayed from floor all the way up to the 20 foot ceiling. "I want to overwhelm clients with the possibilities available to them. To the right is the "doorway" to Jonathan’s office. He had an opening cut out of the wall to look as if a 7-1/2 foot bear had broken through it. Then on the opposite wall is the actual plywood cutout painted to look like the bear’s backside continuing on its run. To add to the broken wall atmosphere, Jonathan has old bricks and boxes painted to look like bricks strewn about. The feel of the office is whimsical and quite appealing.
On an elevator in his building I told one of the passengers (I always start conversations in the elevator, looking for material and just to learn) that I was visiting the "coolest" office in the building. Well, he had never heard of Jonathan’s company. I suggested to Jonathan that he invite people in his building for an open house so they would all know about his business. His office is small so instead of inviting the whole building, he hosts breakfast meetings for a few people at a time.
During my hair salon days, a friend whose hair salon in Oakland was not thriving, said, "I have clients who drive from Fresno for one of my haircuts, I don’t understand why business isn’t better." I was forced to tell him the truth. "Rod, will you get a life. People who drive 18 miles for a haircut feed your ego. What feeds your family is people who walk out of their offices, their homes, their apartments and walk or drive five minutes to you." Do not overlook the opportunities are close to home. Tell them about your superb product or service and how you do things differently than your competitors and you’re right there five minutes from their doorsteps.
What can you do to make your vigilante consumers feel special and appreciated?
We know now, great customer service is no longer good enough. We have to exceed the vigilante consumers’ expectations. I met an individual who knew this way before we caught on. I met Gary Richter at a banking conference several years ago. He has a small boutique bank in Naples, Florida. He told me about a situation at his bank that speaks volumes about his bank’s position on customer service. At 5:20 one Friday afternoon, the bank received a call from an elderly woman who needed to cash a $200 check. The bank closed at 5:30 and she was 20 minutes away. Most of us would say, "Of course, please come over, we’ll stay open for you." But Gary’s bank believes in giving exceptional service so they told the woman that one of their employees would bring her $200 on his way home and that he would pick up her endorsed check. As it turned out the woman had her extensive financial holdings at a national bank in the area and after her positive experience with Gary’s bank, she moved all her assets and investments to his bank.
Today, Gary’s bank continues to focus on superior customer service. "I tell my employees, if we roll out the red carpet for a millionaire, they won’t even notice. If we role it out for millionaires, they expect it. If we roll out the red carpet for thousandaires, they appreciate it. And if we roll out the red carpet for hundredaires, they tell everybody they know." And you can take that to the bank. In six years since the bank opened, it has grown from 16 employees to 180; and they’ve grown from $6 million to $330 million.
Extend your relationship with your customers
Those of us in sales and marketing have always talked about customer service. Then as the environment became more competitive and the economy took its peaks and downturns, we started talking more about retaining our customers. There are really only two types of customers: those who know and love you and those who never heard of you. All businesses spend relative fortunes trying to get new customers and that will always remain important. But don’t spend the entire fortune on just attracting new customers. Spend some of those dollars keeping in touch with existing customers because you want to keep them. Remember what we learned earlier: increase your customer retention by 5% and your profits go up by 100%.
One of the goals in growing your business should be that the same person you sold to today will still be spending money with you ten years from now. So don’t celebrate the close of a sale. Celebrate the beginning of a long relationship. As a matter fact, the real sale comes after the sale. Your competitors are calling on your clients trying to get their business. And your goal is to keep your customers because once you have them you can extend the relationship. These individuals know you and, hopefully, trust you. Have you made them aware what other products and services you have available to them. Maybe it’s not something they can use now, but they need to know for when the time comes that they do need one of these products or services, they’ll know who to call. Because people do business with people they know and trust. People want to do business with people who appreciate them and look out for them. Which brings me to yet another salient point.
Seek strategic alliances
Strategic alliances is a relatively new term for something I learned long ago in business and that’s what I call professional friends. I developed friends in my business community that were looking for the same type clientele as I, but who offered noncompetitive products and services than I did. When I retired from the men’s hairstyling business in 1984, I charged $30 for a hair styling. Back then it was an upscale fee. Alan White, a professional friend, owned The Wright Shop that sold custom made suits and good shoes. I realized that if his customers could afford to buy custom made suits, they wouldn’t be scared off by a $30 haircut. So, I had gift certificates printed up that read: "To further enhance your appearance, The Wright Shop would like to present you with a gift certificate for a free haircut at Miss Fripp’s." I paid for the printing of the certificates and for the haircut. It was a great plan. Alan looked like a hero to his clients. He was happy. They were happy not only for the free haircut but for the quality of hairstyling Miss Fripp’s offered. And I was happy to begin relationships with these new customers.
Adapt, adapt, adapt
These are a few suggestions to help you in building your business into a prospering dynamo. I know they work, because I not only took these tips and techniques myself, I continue to use them with great success. You can gather even more tips and techniques, by going out there to conferences, seminars, listening to competitors, customers, neighbors, friends. We can learn from everyone. Fill your head with so much information that it hurts. You won’t assimilate all that information, but you’ll cull out those bits of information that are the most appropriate for you and your business. Even if you think this won’t work for you, twist and turn it, see if you can put an adaptation of the technique to work for you.
As we slip into the 21st century, we will no doubt create new buzz words for the sales and marketing game. No matter what new terms and phrases we develop, bottom line we need to keep attracting new customers, cultivating and deepening relationships with our existing customers and treat them all with the kind of appreciation, consideration and integrity with which you want to be treated.
Patricia Fripp is a San Francisco based professional speaker on the subjects of Change, Teamwork, Customer Service, Promoting Business and Speaking Skills. She is also the author of 'Get What You Want' and Past-President of the National Speakers Association. For more information please feel free to contact her.
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