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Why chase your customers away?

After my last blog  I received several inquiries about the value of interviewing customers.  Because of this I have added another post on the same subject.

There was a time, not long ago, when companies could generate new business by simply listening to and following the advice of their investors and business advisers. (If we all like it you should like it.)  To remain successful today,  companies must collaborate directly with their most important stakeholders—paying customers. 

Unfortunately many businesses still operate under the assumption that what’s good for them is good for their customers. In the early stages of a business, this may be  true because this is when a business is trying to build marketshare. But in order to continue to build market share and  maintain a  competitive advantage, they   must constantly evaluate their market position.  They forget that everything continues to change: consumer preferences, the market place  and their competitors.

 For 3 years I advised a high end kitchen retailer who refused to believe that Home Depot was taking their customers. Their show rooms were beautiful, their kitchens were beautiful and everything was beautiful (so they thought) .  My interviews told me  the  customers thought our  software was antiquated, the  kitchen salespeople had no use for the flooring salespeople nd we were often rude!  The customers couldn’t have been more right  on all three points. No longer could the owner ignore what he knew was going on and what he needed to do to improve the company.

Several people have said, customers don’t know what they want. When a customer spends her dollar with your competitor  she has told you what she wants. If she gives you the name of the competitor and how much she spent,  she is not only telling you what she wants she is shouting it!

How many times have you said they didn’t buy from me because of price? My experience leads me to believe that much of the time this is crap. Not only is it crap but it gets everyone off the hook. The only true customer who doesn’t buy because of price is the customer who doesn’t have the money-period! The rest fall into these categories:

I don’t like or trust you so I’m not interested in what you say or have to offer. This is a basic communication problem and most business don’t teach their salespeople how to communicate. Instead they teach them how to sell. (It’s like the horse before the cart as they say.)

Your product isn’t worth it. You overpaid and now you’re trying to get the customer to make up the difference. Better you get rid of it and sell your customers what they want to buy.

Your services are no different than your competitors but you fail to believe it. Instead you listen and take the advice of customers who don’t like your competitors.  Better data would come from the customers who bought from your competition! 

Your business has a basic perception problem. The outside of your store looks like a discount store and brings in the  discount customer. Why are you wondering why the better customer isn’t shopping with you?  Or the outside looks great and the right customers comes through the door but  your salespeople and your products are low end. 

The customer who says, “I’m so surprised, I didn’t think you had such nice stuff” is telling you I’m probably the wrong customer. I came in looking for junk and you don’t have it. The customer with money saw your building and went elsewhere.

If your customer says your price is too high you must find out what they mean by that statement. Unfortunately salespeople don’t usually ask the question. If I do a survey I can ask the question and 9 times out of 10 I will get an answer.

Although this may sound like a  big task , the  answers to your business success lie with your customers and most customers want to help you succeed; even the ones who went elsewhere. If you listen your customers will tell you what they like and what they don’t like. Actually you may need some help interpreting the data.

If you think your customers are valuable, you will listen. If you don’t think they’re valuable then you may be trying to sell the wrong customer. In either case you need to do a survey to determine the problem.  Once you get the answers evaluate the data and make the appropriate changes.

Look at all the businesses who have made dramatic differences in their product offerings to maintain their customers base. McDonald’s cut down the French fries and now adds an apple thus reducing calories and fat by 20%. Heinz Ketchup adds a line of organic ketchup and eliminates the high fructose corn syrup, Wal-Mart finds out that 50% of their customers don’t think their prices are that low (now Wal-Mart will change their slogan) and Dunkin’ Donuts just added a tuna fish sandwich to the menu.  It took Starbucks years to add skim milk lattes and only after Howard Shultz heard a customer says she was going elsewhere if they didn’t have skim milk. 

All of these changes were precipitated by customers.

Continuous evaluation leads to continuous improvement. Continuous improvement will maintain a profitable business.

Procedure:

Make it a priority; realize that your customer is your business partner and as in any partnership, needs to be consulted.

Consult with a firm that understands the sensitivity of this information and have them develop a a questionnaire to discuss with your target customers. The customers, the survey and the data should be confidential.  If a customer likes your company they will be open and happy to give you information that will be useful. If they don’t want to talk about your company that’s another problem.

Determine what you think makes you different and check this assumption  with your customer . Conduct a small study of 5 target customers, test out the questions and evaluate the information received. Even with 5 customers you will get plenty of useful data. The value of the data has a lot to do with the wording of the questions and the skillfulness of the interviewer.

Instead of blaming your lack of sales on the economy it would be wise to have a heart-to-heart talk with those who matter most –your customers. If you want to improve your business you must talk with your customers. Remember we don’t learn anything from experience; we learn through the evaluation of our experiences.

Lisbeth Calandrino has conducted numerous customer service studies and used this information to conduct targeted sales and customer service training. She is  author of the book, Red Hot Customer Service, 35 ways to heat up your business and ignite your sales. Lisbeth can provide speaking or customer service/ sales training using the principles of her book at your place of business or through video conferences.

 

 

 

 

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