No customers - No business!

Customers are your income. The better you are at dealing with customers, the more successful your business will be.

Added value

You will only sell a product or service because customers feel they need it. Answer the question 'Why did the customer buy from me and not one of my competitors?' and you will know how to market your product or service. Customers buy from you because you provide more than just a basic product or service. This is the definition of 'added value', and only your customers can decide what added value is.

The key is to get close to your customers and to build relationships. Customers will tell you when their needs change, they will give you indications about how your market is changing, and they may give you vital information on your competitors. They will tell you what makes your business stand out from the crowd as far as they are concerned. To get this information you can either do a formal survey of your customers or ask them in conversation. An example of a formal survey is shown below:

Customer attitude survey

Here is a step-by-step method to help you carry out a Customer Attitude Survey by phone.
The procedure uses a tried and tested method.

Step 1
Identify some customers, including:

• Customers who give you most of your sales.

• Customers you have lost.

• Customers you would like to do more business with in the future.

Aim for 10-30 contacts in total (or more if you have a large customer base).

Step 2
Write the following letter to your customers:

Dear X,
To help us assess and improve the overall standard of our service (products), we are carrying out a brief customer survey. To do this, we are asking our customers for their opinions and advice on our service (products). We will phone you soon. It won't take up much of your time, and we will be very grateful for your views. Thank you for your help.

Step 3
Decide what information you need and design your questions. For example, here are some that we have prepared:

• What do you look for in a supplier? (Ask for specific details)

• What disappoints you about suppliers?

• What improvements could we make in our service to you?

• How often do you like suppliers to contact you?

• How could we do more business with you in the future?

You can design your own questions or change them into your own words. Each question can be followed up with questions asking for greater detail.

For example:

• Can you give me an example?

• Exactly what do you mean by that?

• What other things are important to you?.

Step 4

Decide whether someone in your business will carry out the telephone survey or whether to employ someone from outside. Make sure the person is 'comfortable' speaking to customers over the phone, and is a good listener. Set out your questions on a sheet of paper, leaving spaces for answers. Write the customer's name on each form. Tell the person doing the research to stick to the questions and to write answers word for word - not to interpret the answers. Ask open questions - those that can't be answered just 'yes' or 'no'. If the survey is done professionally and properly, it will improve your image with your customers.

Step 5

Phone the chosen customers about 3 days after sending them your letter. Ask them to identify which is the most important of the issues in Step 3. Then take each in turn and ask them to rate your business on a scale of 1-5, with 1 = awful and 5 = excellent.

Example

'Mr Customer, you said delivery was your number 2 priority.
On a scale of 1-5 (5 being excellent), where would you rate us?
Do you mind if I ask whether our major competitors are above or below that rating?'

Step 6

Assess the information collected. Which issue was mentioned most frequently? What are your customers' most important needs? How do they see your business? You should end up with a list of customer needs and a rating of your performance compared to your competitors. Clearly the next step is to take action to build on your strengths and deal with important weaknesses. You may also have identified some new opportunities in your research which you now want to take up. Businesses are sometimes worried that customers will not talk enough or will not be honest. You will probably find that the problem is not getting people to talk but stopping them talking. Remember, they are far more used to salespersons trying to sell to them than people genuinely interested in their views.

Step 7

Consider following up your survey by thanking the customers that took part by phone or letter. You may even wish to tell them some of the results and how you will be changing or improving what you offer.

Note If you are selling to the general public, it is harder to do this survey by phone and you will probably have to concentrate on a smaller number of regular or recent customers. The alternative is to produce a written questionnaire which you can post to customers. If you do this, be aware of the following:

• Not as many customers will reply, so you will need to send out more questionnaires.

• Always include a letter that explains the questionnaire and a stamped addressed envelope for the customer to return it in.

• Try the questionnaire out on a friend before you carry out the survey.

Other methods of carrying out a customer attitude survey include:

• Polls or questionnaires on your premises.

• Face-to-face interviews with customers.

• Group discussions with customers.

Remember the golden rules with any customer attitude survey method are:

• Record the answers.

• Act on the feedback.

• Use it to build up a relationship with your customers

How to Add Value

Some of the things businesses offer to add value are:

• Quicker and more reliable service and delivery.

• Longer opening hours.

• Products or services that nobody else offers.

• Reputation.

• Strong 'after-sales' service and back-up.

• Convenient or prominent location.

• Distinctive image and personality.

• High-quality product that is rightly more expensive than competitors.

• Expertise and knowledge.

Caution! The only alternative to added value is to sell at a cheaper price than your competitor. However, if you reduce the price:

• You would need to sell more;

• Your competitors may also produce at a lower price; and

• A cheaper price may make people think you are selling a poor product. If you do not keep in close contact with your customers, the first sign that you are out of step with your markets will be an unplanned drop in sales. By then it may be too late to do anything about it.

Market segments

No business has the resources to sell to the entire world, so it is best to divide your potential customers into groups or segments to make the most of your promotional activities.

If your customer segments are not similar, you may need to think up a different selling message for each, or focus all your activity on the strongest segment for your business. Don't be surprised if most of your business is from one type of customer. Many businesses find that up to 80% of their business comes from just 20%of their customers, or 20% of their products generate 80% of their sales. The successful owner knows which products and customer segments are the most profitable.

Sales platform

As well as knowing which products and customer groups are the most profitable, you need to generate enquiries. This is one of the most difficult areas for business-owners as they have to decide how much time and effort to put into selling.

You always need to contact more potential customers than you will sell to. Keep a close watch on your promotional activities and find out what has attracted your customers. You will then know exactly what your 'conversion rate' is for turning casual enquiries into money spending customers. If you know how much business you want to do in a given time, you will then know how many potential customers to promote your business to.

Being able to do this is not as hard as you might think. The method, 'sales platform', is one of business's best-kept secrets. Each business needs to develop its own sales platform. Here is an example:

This is how one kitchen fitting company applied the sales platform technique.

This gives the kitchen business a monthly target for its sales activity. Each month, the business needs to complete 3 orders, give 9 quotations for new business and attract 54 casual enquiries from potential customers to meet its financial targets.

The following may be used to work out your own sales platform:

This gives you a monthly guide for planning your sales activity.

Be aware!

The success of your business depends on 'keeping your ear to the ground' in all sorts of ways. Here is a list of a few things that have had a major impact on businesses in recent years:

• Economic trends and recession.

• The increasing demand for quality assurance, such as ISO9000.

• The ageing of the population.

• Environmental issues.

• Higher customer expectations.

• Changes in regulations and law.

The businesses most likely to survive or prosper are those that identify these trends early. For example, if you decide that the cost involved in meeting new law is more than your business can afford, recognising this early will allow you to change direction.

Selling

There is a common belief that selling is about putting pressure on a potential customer or manipulating them. This is wrong. People tend not to buy from suppliers they do not trust. Selling is about trading your human qualities. Research has shown that in 83% of cases, customers actually like the sales person they have been dealing with. This is another aspect of added value.

How do you get potential customers to trust you?

• Keep your promises.

• Get to meetings on time.

• Show evidence that you work well for other people (perhaps by showing letters of thanks or recommendations).

• Show them your list of customers (if your existing customers allow this).

• In your own premises, display awards and certificates that relate to your business.

What makes a good salesperson?

• Successful sales people are those who listen, not those who just talk.

• Two-thirds of the message you put across is through body language. A successful salesperson is positive and enthusiastic and makes it obvious that they are listening and taking notes.

• A good salesperson will be able to overcome objections to your product or service. 'Yes, but' is a common start to such an objection. It is important to be prepared for any objection.

Complaints

If you think you are doing all right because you don't hear any customer complaints, think again! In general, people do not complain - they just go somewhere else. Worse, they usually tell about 10 other people of their bad experience with you. (Normally, a good experience will be passed on to an average of 5 other people.)

Keep in touch and encourage your customers to talk to you, even if you just get complaints. Often, by reacting to their complaint, you actually increase their loyalty towards you. Customers do understand that mistakes happen. Take responsibility rather than blaming others - solving customers' problems is a vital part of business.

To summarise

A 'Marketing Effectiveness Questionnaire' can be used to help you decide how 'customer-orientated' your business is. A sample questionnaire can be seen in the appendix section of this guide.

'Customer-orientation' is an attitude of mind, and the wise business person is always trying to improve. Each of us is subjected to over 500,000 advertising and selling messages every year, so the competition to get your name in front of your customers is tough.

Repeat business and 'referred' business (from people who have heard about you) are the most important selling areas. Work hard at generating ideas to create more repeat and referred business.

Never criticise your competitors in front of present or potential clients. You will reduce the credibility of your own products and services by doing so. Your competitors do a good job, but you can do it better.