Newsletter - September 2005

The Simple Formula to Keep Your Customers for Life

I am always on the lookout for great examples of good business practices. Last month I wrote about the outstanding service I found at the dentist. What amazes me though is how many business owners miss the point consistently and then complain business is tough.

In the last month I have encountered several similar instances of poor service. I only have enough space to write about one. I was working in Melbourne and had the opportunity to catch up with my brother and his two sons and their partners. We went out to dinner and had what we might call the service experience from hell.

I won’t bore you with the litany of errors but the amazing thing was the attitude from the restaurant toward our complaints about the service. It is a well researched fact that a customer who has a bad experience will tell 12 other people. Most people do not complain on the night, they simply walk away and never come back. The interesting thing is that if a retailer or supplier receives a complaint and then does something about it, 90% of customers will come back. The interesting thing is that if a retailer receives a complaint and then does something about it, 96% of customers will come back and remain loyal to the business.

When my brother complained about the poor service the restaurant manager gave every possible excuse, ranging from new staff to we’re really busy tonight. When he sensed our displeasure, he graciously offered free coffees for all! Eventually he offered a 15% discount.

He made no effort to listen to our problem and did little about it. In fact the problems kept occurring after we had made an initial complaint! The way his staff dealt with the problem was to avoid our table all together, even to the point of avoiding eye contact as they walked by.

I noticed as we were leaving, vowing never to return, that this restaurant has a loyalty club. I’m wondering just how many people actually belong to the club!

If a customer complains to you about your business, listen carefully. This is your best opportunity to gather the best feedback you will ever get. Take every complaint offered as an opportunity for you to learn and grow your business.

Remember only 4% of dissatisfied customers will ever take the time to complain, the rest just leave and never come back.

Listen to what the customer is saying. Identify ways to improve your business processes. Offer your customer something to recognise their effort in plucking up the courage to tell you.

I’m not suggesting that you lose money doing this, though you must make some effort to reward them. Offer them a discount next time they come back, give them a voucher for a service you provide. Make sure it has some value, though again it does not have to be huge. By simply recognising the customer and doing something about the problem, they will be more inclined to return and do business with you.

Remember research shows that if you take action to solve their problem, they are likely to stay and do business with you long term.

Innovators - Are You Marketing or Educating?

By Robert Gerrish

If you're forever hearing great things said about your work, yet not seeing these translate into sales and revenue, it could just be because you've fallen into the innovator trap. Huh? I'll explain.

The innovator trap is where we can end up if we confuse educating with marketing. Going out and telling the world about something completely new and revolutionary certainly stands a good chance of generating interest, but not necessarily any sales - not yet anyway and maybe not for you.

Sure innovation can work as a marketing tool, but generally only with an audience who already know and trust you - ever wondered why those really amazing devices for chopping onions and dicing carrots only get sold on market stalls or on cable TV at four in the morning? They're simply not of interest to mainstream marketing. And look at the brand names. Where did they come from? More importantly, where did they go?

I'm not suggesting that we only market in the mainstream, but we need to be aware of what works and what doesn't and if necessary make some changes.

Often the changes involve little more than a slight dilution of our proposition - evolution can sell easier than revolution, at the outset. Once effective marketing gives us a foot in the door, we can guide our prospects and customers toward a brave new world.

Let's look at an example. In fact it's a real one from a conversation I had a while back:

David has developed a product that revolutionises the way corporation’s store and access electronic information. In other countries similar systems are slowly being embraced and put to extremely good use. In his home market, however, things are trailing a little behind.

David is being invited to talk at numerous conferences and expositions, there is much interest. The joint is jumping. Well, it undoubtedly felt like that for a while, but now it's getting a bit tiring.

Sure there's a lot of interest, but not enough sales. David is educating and he's doing a great job. His family meanwhile are getting fed up with beans on toast.

So what would you do? Keep bashing away? Go into greater debt maybe? Put the house on the line?

After speaking for a while, David came up with this solution:

1. Look much more closely at what you’ve learned
• Take time to do some research - have you been educating or marketing?
• Ask the tough questions and be ready for straight answers.
• Talk to some of the people who invented the wheel in those other more advanced markets - What lessons have you perhaps missed?
  
2. Get clear on the options
• How long could/should you give to your current path?
• If you made a shift, what would or could that be?
• Are there any real signs that the market is changing?
  
3. Think more like a marketeer and less like an innovator
   • If you look at your revolutionary product as top-of-the-range, what's a possible 'entry level' product?
   • How can you modify your language to talk in terms that satisfy a current need, rather than focussing on a future 'maybe-want'?

Robert Gerrish is an author, presenter and coach working with those going it alone in business. He’s the founder of Flying Solo - a huge online resource for the nation’s soloists: www.flyingsolo.com.au

ROBERT GERRISH
Coach l Writer l Presenter

+ 61 2 9337 2600
PO Box w100, Watsons Bay, Sydney, NSW 2030
Email: robert@gerrish.com.au

Going it alone in business or know someone who is Join over 12,800 soloists at www.flyingsolo.com.au

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