Do you often have the thought that your business would operate so much better without customers and all their demands? They want this, that and the other – all of which interrupts your day! But customer expectations are what drives your business and keeps them coming back.
Do you know what your customers are expecting of you? If not, how can you find out? What will understanding their expectations do for your business? In this article we are going to look at expectations and how it’s important for you and your business to know what they are.
What Do They Expect?
Not many businesses endeavour to find out what their customers want! Owners assume they know. Big mistake! If you want to grow your business, find out what your customers expect of you. How can you do this? Ask them! Why not have an ‘Expectations Week’. Tell your staff that this week’s goal is to ask customers what they expect of the business. Set a target of approaching a certain number of customers a day and just ask, “If I was to ask you what your top 3 expectations of doing business with us are, what would they be?”
Alternatively you could put out an Expectations Book and ask customers to write down their comments. This way, they will not be embarrassed and perhaps may be more frank!
If you operate your business remotely, why not do an e-mail survey? Consider offering a prize to encourage responses.
Great Expectations
What is your customer likely to come up with as expectations of doing business with you? Here are some possible answers:
- Fast and efficient service
- Competitive price
- Quality products
- Sufficient stock to meet demand
- Trained staff
- Being treated politely and with respect
- The phone being promptly answered
- E-mails responded to within a reasonable timescale
- Promises being kept
- A clear complaints procedure
- Clean and well maintained premises
Depending on your business, the list could go on! But you have the idea. No doubt you could add many more.
Review and Take Action
Armed with your list of expectations, your next step is to review them and see which ones you are currently meeting. Remember, you may think you are meeting a certain expectation but this is an opportunity for a quick reality check to ensure it’s really happening.
The list you’re left with are the expectations which you are not currently delivering on. Looking at each of them in turn, ask yourself whether, even with the best will in the world, you could meet that expectation. You may have an over exuberant customer who just expects too much! If you realistically can’t meet it, delete it.
You will then be left with a number of core expectations, which you could meet with some thought and action. Sit down with a pen and paper and put in place an Action Plan on what needs to be done to achieve what your customer expects of you. Get your staff together and all commit to putting the outcomes into action.
You’ve Listened!
Having gone to the trouble of asking your customers what they expect of you, don’t forget to provide them with some feedback. If you gathered ideas from the shop floor, put up a notice thanking everyone for their participation and listing the expectations you are taking action on. Why not display an Expectations Charter?
If you had responses via e-mail, reply and again outline what you have done. You could even list the expectations on your web site.
Having gone to all this trouble of asking, reviewing and taking action, it’s all too easy to forget what you committed after a few weeks or months. Make sure that at least once a quarter you re-visit the original list and check that you are still delivering what your customers expect of you.
What Can You Expect?
If you have followed through on the steps, what’s in it for you? After all, the customers get what they want; what’s your payback?
- Your customers are likely to return more often
- They are more likely to remain loyal customers
- They will spend more
- They will be an ambassador for you and your business
- They will generate referrals
Some pretty compelling reasons to put an expectations programme in place!
So, review these steps and consider asking your customers what they want of you. If you can manage their expectations, you manage their experience and so manage your profits!
Monday, July 27, 2009
Thursday, July 16, 2009
Shift Your Growth into the Fast Lane by Engaging Your Customers
Do you feel like you have the “pedal to the metal,” spending all you can on advertising but still can’t get the growth of your business into the fast lane? The fact is, if your customers aren’t engaged, it may not matter how much you spend on advertising. Just like a car in neutral isn’t going anywhere (no matter how much gas you give it) until the transmission is engaged, your business isn’t going anywhere until your customers are engaged.
What does engage mean? Here are three definitions you might find in a dictionary:
1. To attract someone’s attention
2. To establish a meaningful contact
3. To move into position so as to come into operation
Combine the three of them and it provides a pretty good working definition for engaging your customers:
Attract your customers’ attention with the intent to establish a meaningful relationship and move them into position to help your business grow.
Without worrying too much right now about how to engage your customers (we’ll get to that) let me propose multiple levels of possible customer engagement as represented by this pyramid model.
At the base of the pyramid is your total available market. That is, all of the potential customers in the world. They have potential, but at least at this point no level of engagement with you or your company.
The next level derives its name from a term we have all used when asked by a sales man if we need help, “No, just looking.” The fact that we are looking means we are more engaged than the masses, but we’ve yet to make any great commitment.
Just beyond Just Looking is Just Buying. For most companies this is the height of their ambition. Get a sale, book the profit and move on to the next customer.
Above just buying is buying again. This is a level that in general assumes that the customer was pleased enough with their first purchase to be willing to come back and purchase again. I say in general, because it is possible that they have no other options and therefore they have no choice. For you as the business owner, this is a very good level. Serving a repeat customer costs less because you don’t have to pay to acquire them and they are less expensive to serve in most cases because they are already familiar with you and your operation. The more customers you can get to Buying Again , the more profitable you will be.
But there are customer engagement levels even higher than Buying Again. The first is Giving Feedback. This refers to customers that are willing to invest more of themselves in your company than just their money. They do this by making the effort to tell you how you can improve your offerings. In effect, they go beyond the typical definition of customers and become co-producers, helping to ensure that your offering is exactly what the market wants and needs. Two great things happen in the process: 1) As your offering improves so will your sales and, 2) As the customer invests their ideas in your company they will become even more loyal and move to the next level.
At the top of the pyramid is Telling Others. At this level your customers are so pleased with your offerings they can’t be stopped from telling others. They become co-promoters, a very powerful sales force willing to tell perfect strangers and best friends how wonderful your company is. As consumers in general become ever more jaded and less trusting of traditional advertising, the growth of your company will be largely dependent on how many of your customers become promoters.
Having described the model, let me hasten to add that I know it is oversimplified. Not all customers will move through each level. Some will become promoters without ever providing feedback. Some will provide feedback and then go away and never return. Despite its simplicity, I believe the model can be helpful in understanding the concept that customers can become much more valuable to a business than just the value of the purchases that they make. Consider the following:
This chart attempts to show in relative terms how much a business benefits financially from a customer at each level of possible engagement. At the far left, Just Looking, expenses associated with a customer typically exceed income from that customer. For example, you spend money on advertising and attract the attention of a customer willing to take a look. At that point you have paid out (for advertising) more money than you have brought in ($0 purchased by the customer).
For those customers that take the step and buy your offering, chances are you will cross over into positive returns. If the customer returns to buy again and again your profit from that customer will increase. Note that the slope of the line becomes steeper in the buying again phase. That is due to the fact that it is less expensive to sell to returning customers than it is acquire new customers. In fact for most businesses it costs five to ten times more to acquire a new customer than it does to sell more to current customers. The obvious difference is the acquisition cost associated with attracting new customers. The less obvious reason is that a regular customer already knows how your product or service works and doesn’t require as much “hand holding” throughout the process.
As the curve continues into the higher levels of engagement, Giving Feedback and Telling others, its slope becomes even steeper indicating that significantly higher returns are possible. Two reasons for this: 1) The additional costs required to move customers into these levels is relatively small and 2) The potential returns have a built in multiplier effect—that is, one customer’s actions can influence many other customers.
For example, feedback from one customer that helps you improve your offering not only benefits that one customer and brings them back again but benefits all your customers and increases the likelihood that they will return more often. Even more obvious, a customer who begins telling others about your business brings not only her purchases but the purchases of several new customers to your business.
In conclusion, engaged customers will help you improve your offering, they’ll actively promote your product, they will improve your bottom line, and, to a large extent, they will determine how fast your business will grow. As you consider the growth of your business, look not only at how many “Just Looking” customers you can bring in and move to “Just Buying,” but also consider how you can get your “Just Buying” customers fully engaged in your business.
What does engage mean? Here are three definitions you might find in a dictionary:
1. To attract someone’s attention
2. To establish a meaningful contact
3. To move into position so as to come into operation
Combine the three of them and it provides a pretty good working definition for engaging your customers:
Attract your customers’ attention with the intent to establish a meaningful relationship and move them into position to help your business grow.
Without worrying too much right now about how to engage your customers (we’ll get to that) let me propose multiple levels of possible customer engagement as represented by this pyramid model.
At the base of the pyramid is your total available market. That is, all of the potential customers in the world. They have potential, but at least at this point no level of engagement with you or your company.
The next level derives its name from a term we have all used when asked by a sales man if we need help, “No, just looking.” The fact that we are looking means we are more engaged than the masses, but we’ve yet to make any great commitment.
Just beyond Just Looking is Just Buying. For most companies this is the height of their ambition. Get a sale, book the profit and move on to the next customer.
Above just buying is buying again. This is a level that in general assumes that the customer was pleased enough with their first purchase to be willing to come back and purchase again. I say in general, because it is possible that they have no other options and therefore they have no choice. For you as the business owner, this is a very good level. Serving a repeat customer costs less because you don’t have to pay to acquire them and they are less expensive to serve in most cases because they are already familiar with you and your operation. The more customers you can get to Buying Again , the more profitable you will be.
But there are customer engagement levels even higher than Buying Again. The first is Giving Feedback. This refers to customers that are willing to invest more of themselves in your company than just their money. They do this by making the effort to tell you how you can improve your offerings. In effect, they go beyond the typical definition of customers and become co-producers, helping to ensure that your offering is exactly what the market wants and needs. Two great things happen in the process: 1) As your offering improves so will your sales and, 2) As the customer invests their ideas in your company they will become even more loyal and move to the next level.
At the top of the pyramid is Telling Others. At this level your customers are so pleased with your offerings they can’t be stopped from telling others. They become co-promoters, a very powerful sales force willing to tell perfect strangers and best friends how wonderful your company is. As consumers in general become ever more jaded and less trusting of traditional advertising, the growth of your company will be largely dependent on how many of your customers become promoters.
Having described the model, let me hasten to add that I know it is oversimplified. Not all customers will move through each level. Some will become promoters without ever providing feedback. Some will provide feedback and then go away and never return. Despite its simplicity, I believe the model can be helpful in understanding the concept that customers can become much more valuable to a business than just the value of the purchases that they make. Consider the following:
This chart attempts to show in relative terms how much a business benefits financially from a customer at each level of possible engagement. At the far left, Just Looking, expenses associated with a customer typically exceed income from that customer. For example, you spend money on advertising and attract the attention of a customer willing to take a look. At that point you have paid out (for advertising) more money than you have brought in ($0 purchased by the customer).
For those customers that take the step and buy your offering, chances are you will cross over into positive returns. If the customer returns to buy again and again your profit from that customer will increase. Note that the slope of the line becomes steeper in the buying again phase. That is due to the fact that it is less expensive to sell to returning customers than it is acquire new customers. In fact for most businesses it costs five to ten times more to acquire a new customer than it does to sell more to current customers. The obvious difference is the acquisition cost associated with attracting new customers. The less obvious reason is that a regular customer already knows how your product or service works and doesn’t require as much “hand holding” throughout the process.
As the curve continues into the higher levels of engagement, Giving Feedback and Telling others, its slope becomes even steeper indicating that significantly higher returns are possible. Two reasons for this: 1) The additional costs required to move customers into these levels is relatively small and 2) The potential returns have a built in multiplier effect—that is, one customer’s actions can influence many other customers.
For example, feedback from one customer that helps you improve your offering not only benefits that one customer and brings them back again but benefits all your customers and increases the likelihood that they will return more often. Even more obvious, a customer who begins telling others about your business brings not only her purchases but the purchases of several new customers to your business.
In conclusion, engaged customers will help you improve your offering, they’ll actively promote your product, they will improve your bottom line, and, to a large extent, they will determine how fast your business will grow. As you consider the growth of your business, look not only at how many “Just Looking” customers you can bring in and move to “Just Buying,” but also consider how you can get your “Just Buying” customers fully engaged in your business.
Tuesday, July 7, 2009
Help Your Small Business Succeed With A Credit Card
One of the many difficulties of starting a small business is gaining access to capital during the startup phase. With the large growth in small specialty businesses across the country, credit card companies are beginning to design special programs to help this new breed of business achieve success. For even those small businesses that have access to capital, the perks and benefits associated with small business credit card programs, can still be useful to help you compete more effectively in the marketplace. Below are just six of the many ways in which a small business credit card can help your business to operate more smoothly and improve your bottom line.
Ease Your Cash Crunch
A small business credit card can ease your business’s cash woes. Through the development and implementation of a sound financial plan that utilizes a credit card you can guarantee that your business will always meet payroll, be able to purchase inventory on an as needed basis, and manage both seasonal and business fluctuations without depleting your cash reservoir. Another added advantage is the cash advance feature, which allows you to withdraw cash from an ATM to cover emergencies and other unanticipated expenses.
Unlike a personal credit card, a business credit card also provides a business size credit line, which is substantially higher.
Keep Track of Business Expenses
Through the use of a credit card, you can, with little to no effort, separate your business expenses from your personal expenses. This allows for easy identification of tax deductions and filing of accurate income tax returns.
Secure Multiple Cards
You can also secure more than one card through small business credit card programs. This allows you to give employees the authority to make purchases while freeing up your schedule for more pressing issues. You can also do this with ease since you are also given the ability to set spending limits for different employees, which will further help you to control your expenses.
Access Free Business Resources
Anything free is good! Some credit card companies also provide clients with a wealth of resources to help manage cash flow and develop good record keeping procedures free of charge. Extensive reporting is conducted on both a monthly and bimonthly basis to help you track your expenses down to the penny. Additionally, free business checks and electronic funds transfers are also available.
In addition to that, you can also access reports, data and advice on developing business and marketing plans, conducting market analysis, and pricing products through a company’s web site. You can also increase your knowledge of other products and services like software programs that can help your day-to-day operations run more efficiently.
Build Credit to Qualify for Larger Loans
Obtaining a credit card and using it wisely can also be a stepping-stone to help your business qualify and secure a loan with a major bank or venture capitalist firm. By establishing a good relationship and credit history with a company that also offers other products and services, it’ll just be a matter of time before other cost-saving services are thrown your way.
Perks and Rewards
Perks and Reward Programs designed especially for small businesses are by far one of the best features of a small business credit card program. Small businesses can earn airline points and cash back rewards just like the big boys. Discounts are also available through select merchants like FedEx and Staples, which can result in huge cost savings for supplies and other operational expenses. Some companies also go an extra mile by providing rental car and lodging benefits.
Ease Your Cash Crunch
A small business credit card can ease your business’s cash woes. Through the development and implementation of a sound financial plan that utilizes a credit card you can guarantee that your business will always meet payroll, be able to purchase inventory on an as needed basis, and manage both seasonal and business fluctuations without depleting your cash reservoir. Another added advantage is the cash advance feature, which allows you to withdraw cash from an ATM to cover emergencies and other unanticipated expenses.
Unlike a personal credit card, a business credit card also provides a business size credit line, which is substantially higher.
Keep Track of Business Expenses
Through the use of a credit card, you can, with little to no effort, separate your business expenses from your personal expenses. This allows for easy identification of tax deductions and filing of accurate income tax returns.
Secure Multiple Cards
You can also secure more than one card through small business credit card programs. This allows you to give employees the authority to make purchases while freeing up your schedule for more pressing issues. You can also do this with ease since you are also given the ability to set spending limits for different employees, which will further help you to control your expenses.
Access Free Business Resources
Anything free is good! Some credit card companies also provide clients with a wealth of resources to help manage cash flow and develop good record keeping procedures free of charge. Extensive reporting is conducted on both a monthly and bimonthly basis to help you track your expenses down to the penny. Additionally, free business checks and electronic funds transfers are also available.
In addition to that, you can also access reports, data and advice on developing business and marketing plans, conducting market analysis, and pricing products through a company’s web site. You can also increase your knowledge of other products and services like software programs that can help your day-to-day operations run more efficiently.
Build Credit to Qualify for Larger Loans
Obtaining a credit card and using it wisely can also be a stepping-stone to help your business qualify and secure a loan with a major bank or venture capitalist firm. By establishing a good relationship and credit history with a company that also offers other products and services, it’ll just be a matter of time before other cost-saving services are thrown your way.
Perks and Rewards
Perks and Reward Programs designed especially for small businesses are by far one of the best features of a small business credit card program. Small businesses can earn airline points and cash back rewards just like the big boys. Discounts are also available through select merchants like FedEx and Staples, which can result in huge cost savings for supplies and other operational expenses. Some companies also go an extra mile by providing rental car and lodging benefits.
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