Did he just say “No” to a customer?

Why Business owners need to learn to say “No” to customers.

After countless exhortations from marketers telling us that the customer is king, how can I say we need to say “No”? We’ve all been taught the damage a customer can do in terms of bad press (isn’t it something like an unhappy customer tells 9 or more other people?) and so we need to avoid this at all costs, right?  In service industries especially, we get told that we need to always ensure the customer is happy, never to argue, that the customer is always right.  

Well, I say “No”.  

I say business owners need to learn to say “No” to customers for their own good.  Why?

My first explanation is that we need to say “No” to the wrong customers.  The wrong customers are far more likely to request things that we don’t really do well, or efficiently.  The wrong customer is a fine dining, luxury customer who comes into your convenient economy take-away and expects crystal glasses and proper cutlery and wants almond milk in their coffee.  The wrong customer walks into a luxury car dealership and complains about the fuel economy of a multi-million rand sports car (for cost, not environmental reasons).  

Wrong customers try and force-fit you into offering what they are looking for, instead of looking for the right business offering for themselves.  

The best you can do here is politely refuse and point them in the direction of what they are really looking for. 

You will never entirely satisfy the wrong customer without substantially changing your business offering.  The fine diner will never be happy with your convenient economy take-away, however much you try to dress it up for them, they are really expecting something more upmarket.  The economy car person will never see the value in a vehicle they need to pay a huge premium for with additional premium upkeep costs, no matter how you try to discount it for them.  Trying to meet the wrong customer’s needs will cost you massively in physical time and effort. There are more hidden costs too…

When a wealthy exclusive type (a right customer) notices you giving discounts to wrong customers, 2 things happen.  Firstly, the tactics you are applying to the wrong customers don’t appeal to them, they don’t expect or “need” those from you.  They see these as irrelevant.  Secondly they don’t feel like they are your “right” customer anymore.  Someone patently unlike them is getting your attention and focus, so they had better move on. So by trying (in vain) to satisfy wrong customers, you can lose the right customers too!

But those wrong customers complain?  (and they do!), so what do I do?

Wrong customers will tend to complain about the exact things that make you special to your right customers.  A wrong customer will complain about the lack of service precisely when the right customers enjoy not being hassled by sales people. Your right customers love seeing the complaints of wrong customers because it reinforces why they like your offering.  A wealthy elitist loves seeing people complaining about their choice being too expensive. It makes them feel more wealthy and elite!  Be polite and reinforce why you can’t accommodate the wrong customer and provide them with an alternative that will.  This will mollify the wrong customer somewhat, but more importantly it will reinforce to the right customer why they chose you.

The best way to avoid wrong customers is to lay out expectations up front, through your marketing messaging.  If you are cheap, tell people all about how cheap you are and show how you go to cost cutting efforts to make your offer so cheap.  If you are premium, don’t be afraid to class yourself with premium lifestyle cues.  By being clear on who your right customers are, you will already deter most of the wrong customers.  Of course, you need to clearly define who your right customers are first.  

This is trickier than it sounds.  You need to be able to profile your right customers, by their behaviour, age, gender, dress and more.  The more detail you can get into about your right customer the better, as it will help you (and your staff) to identify them when they come along.  But, never assume that someone is not your right customer if they don’t quite fall into your profile – you could always be wrong in your classification.  Rather assume a customer is the right type and develop tools to try and further determine this, until you can be sure.  However, as soon as you know someone is not your right customer, don’t hesitate to make it clear your offering isn’t ideal for them and point them towards something that is. If you don’t give them a better alternative, they may continue to force-fit you into what they want.

In conclusion, my point is not to fly in the face of the concept that “the customer is king”, but to modify it to “the right customer is king”.  When the right customer does come along, you still need to ensure they leave feeling satisfied and happy.  Do all you can to ensure they feel you are meeting their expectations.  Anticipate their needs and requirements.  When you make one “right” customer happy, you are in fact working to make all of your other right customers happier too.  You will attract more “right” customers and deter more “wrong” customers.

“It’s only by saying NO that you can concentrate on the things that are really important.”  Steve Jobs

Advertisement

Caution: Discounting could be your worst pricing strategy right now!

Discounting could definitely be your worst pricing strategy coming out of lockdown.

Many businesses are looking to discounting to regain the momentum and sales volumes they have lost during lockdown. 

So why is discounting so popular?

Well, to be honest, most effective discounting is used at the retail level to attract or drive shopper behaviour and not necessarily driven by the independent brands on discount.  Retailers have strategies around using some products at discount to attract customers, who are then likely to purchase a basket of offers whilst in-store, and the retailer can then regain their profit through these other items.  So yes, if you have a range of offers available, it is useful to have lower priced items (these need not necessarily be on discount mind you) that can attract customers who you should then sell other things to.  Another use of discounting which is also used regularly by retailers, is to ensure stock rotation and thereby release cash for more profitable items.  When an item does not sell quickly enough, and may even be at risk of expiring, it is better to get some cash for them than risk nothing at all.  Basically the risk here is making a total loss, so the items get discounted so that they can free up some cash to buy other items that will sell.  These slow items are then not likely to be purchased for selling on again.  It is this retailer behaviour, and the resultant influx of customers, that has got us believing discounting is a valid option that works very well.  It seems logical that when you reduce price you encourage volume, but…

…the hidden costs almost certainly outweigh the benefits.  Let me show you how…

When you discount, you NEED an equivalent increase in sales volume just to make the SAME amount of profit.  If I discount my offer by 20%, I need an increase in sales volume of 20% to make up for the 20% I would have usually made at the old sales volume.  Only if my discount results in an increase of sales of MORE THAN 20% will I make more profit.  Think about it.  So don’t discount if you don’t have data to support the fact that your volumes will increase disproportionately more.  Definitely don’t discount if your profit margins are already slim and you are battling to make ends meet. There are more risks to consider too…

The next issue is WHERE those increased sales volumes will come from?

If they are coming from existing customers who are likely bulk-buying at the reduced price, then you may be merely forfeiting future sales which would have been made at the normal price.  Your customer’s purchase behaviour will likely move back to normal at the return to the normal price.  Jim normally buys 1 pack a week, but on discount special he buys 3, and then doesn’t need to buy for another 3 weeks.  What you may hope for is that your customer’s consumption patterns change, that they get used to increased consumption over the discount period and then don’t return to their normal consumption patterns again.  This relies on your in depth knowledge and research of consumption patterns in your market and of course, the general behaviour of the category you are in – information which most of us don’t have at our fingertips  You can also , of course, encourage increased consumption in ways other than discounting.

If your increased discounted volumes are coming from new customers, you have to ask yourself:  How many of those new customers will continue to purchase once you return to your normal price level?  You may be giving customers who normally cannot afford you a chance to sample your offer at a reduced price, but their income levels won’t necessarily change when you go back to the normal price, and they may just return to your lower priced competitor.  You just dropped your profits for people who can’t afford you anyway.  Granted, you may get some of them used to your offer and they may not want to return to their cheaper alternatives again, BUT, they became your customers at a lower price level, a price expectation they will hold forever for your offer.  Their perception of the value of your offer actually reduces when you put the price back to normal.  It’s like getting into satellite TV at one price and then they hike the price up suddenly. You’re setting yourself up for some very unhappy customers!

Effect on existing customers

The other effect of bringing a whole lot of new customers into your offer is the effect it has on the perception of your offer from existing customers.  When existing customers, who may have built up a brand perception of your offer already, suddenly see lower income demographics moving into their perceived category with them, their perception of exclusivity is diminished.  How exclusive is a Rolex if everyone is now wearing one?  What’s more, your customer experience and service levels may be affected if you are suddenly dealing with a higher influx of customers, and your previous loyal customers may not be able to get the service they were used to.  You then risk losing these previously loyal customers, possibly brand ambassadors within their higher income markets, who were happy to pay full price, to customers who already think you a bit too expensive.  And remember, your loyal customers likely provide the bulk of your sales volumes anyway.  This is the marketing equivalent of throwing out the baby with the bathwater, or biting the hand that feeds you.

Effect on brand image

This brings us to a deeper and more long lasting issue of discounting, which refers to damage to your brand equity or brand image.  By using discounting as a tactic over a longer period, you create 2 deep seated issues: one is a market that expects discounts and then only buys when you are on discount, which is in essence a “fake”, lower income market (with fake consumption habits and volumes) and likely to transfer to a competitor who discounts more at any moment.  Customers bought by price are just as easily lost by price and regaining them can only lead to very unprofitable price wars.  The other is a shifting of the quality or premium perception of your brand.  By discounting regularly (or sometimes even sporadically) the expectation of the quality or premium of the offer that can be maintained at the lower price will surely drop.  Where your customers may have believed a certain premium or quality was underscored by extra effort, or higher quality inputs, when you discount, that belief is challenged: “How can they be giving me the same quality at a reduced price?  Something in the quality has changed!”  Furthermore, customers may also deduce that if you can survive or continue to operate on reduced pricing, that you may have been charging extraordinary premiums previously, i.e. they were being ripped off.  Thus discounting can severely undermine the trust customers have in your offer and brand, which is the fundamental building block of brand equity, taking massive time, effort and cost to establish in the first place, but even harder to rebuild.

So what CAN we do if we desperately need to encourage customers to buy again and regain our sales volumes?

We’re going to take a step back here and look at some of the fundamentals of pricing.  My simplified view of price is that it is the monetary value associated with the expected utility of an offer.  Pricing has replaced bartering, where we would match the utility of one item with another.  The word utility is of course equated to usefulness, and how useful I perceive or expect this offer to be in meeting my need.  Utility, I might add, is hugely subjective to the buyer, indicated by the words “expectation” and “perception” used.  A glass of water to someone in a desert has a whole different utility to a glass of water to someone sitting in a fresh mountain stream.  “Good Value” is perceived by the buyer when the expected utility meets or exceeds the price.

We can think of this in terms of an equation below where Value is created (i.e. value is 1 or greater) when utility is equal to or greater than cost/price:

But I prefer to look at it in sense of a balance of scales as per below, where value is created when utility is equal to or outweighs cost/price:

So whilst discounting looks at adjusting the price to affect the value, there are many ways to look at adjusting the utility of an offer to improve the perception of good value, which we commonly call a “value-add offer”.  A price discount could also potentially be classed as a value-add, as it improves the value of the offer by reducing the expected cost, but it already has its own term “price discount”, so we will continue using the term “value-add” as referring to efforts to tip the utility side of the scale whilst the price stays constant. 

Why adjust utility and not price?

  1.  You don’t affect the affordability perception of your offer– what customers could afford previously, they can still afford as price hasn’t changed, so you are still effectively talking to customers in the same price bracket as before. 
  2.  Utility is subjective, so a benefit in utility cannot be objectively quantified.  Improving utility can have a bigger value effect for some buyers than others, where a change in price is immediately a standard value change for everyone, which brings us to the next, and most important point… 
  3. Others can easily replicate price but not utility.  Improving the utility side of the scale makes it more difficult for your competitor to copy or beat an offer.  In fact utility is often where your competitor advantage lies and can be improved upon.

How do we improve utility to improve value?

We mentioned utility is where your competitive advantage sits and this is true because your specific skills, advantages, and experience can be used to increase the utility of your offer to specific markets that value those characteristics.  By focusing on utility to drive value, you automatically differentiate yourself from competitors and the generic item, price, becomes less of a deciding factor in buyer choice.

Even though utility is a subjective concept, many utility factors can and do have a price implication, as the market price for such factors may be well known. However many utility factors don’t have a direct price correlation and in fact have different utility values for different markets.

There are so many categories and ways of improving utility to create better value , I’m not sure why businesses would resort to the one means of offering value that everyone can replicate and which comes with so many risks, which is price discounting.

Here are just a few value-added options off the top of my head that would drive utility up:

One utility value-add offer related to convenience that was pertinent during lockdown was home delivery.  Even though home delivery often has a perceived price value, offering free or reduced cost delivery tips the scales down on utility, as it just made it easier or even possible to access offers during lockdown.  Offering free delivery for a certain period does not affect the price perception of your core offer, but as many customers know the usual cost of delivery, they add that back to their value calculations.  When you return to charging normal rates for delivery, the value perception of your core offer is not altered, but the utility of the whole transaction experience returns to normal.

Closing thoughts…

I hope you have now realized the risks of discounting and seen that there are a whole range of other ways to increase the value perception of your offer, which provide further benefits without the risk or direct cost of discounting.

If you have any examples or stories to share about discounting or suggestions on more successful value-add options we can add to our list I’d love you to comment below so we can all see them!

Best Regards,

Peter Flemmer

Has Lockdown been the Death of your Customer Experience?

Social Distancing has prevented direct customer contact, destroying the customer experience… or has it really?

As businesses scrambled to embrace social distancing whilst keeping transactions going, a hands-off customer approach seemed necessary, despite the damage to the transaction experience. Does this mean we forget about the customer experience for now? Do so at your peril, I say.

Markets are facing a huge amount of turmoil and confusion as the implications and results of the COVID-19 pandemic are played out in everyday lives. Uncertainty seems to be the major trend. People are having to face new ways of transacting that exacerbates this uncertainty, whether it be tapping vs swiping cards whilst behind masks and screens to learning how to order and pay online for items they have never seen in person, to receiving a product via a 3rd party delivery man. As businesses we need to take note of this uncertainty and adapt our customer experience accordingly. But how?

  1. ReMap your Entire Customer Journey
    • If you haven’t done this already before, this is about putting yourself in your customer’s shoes and going through the whole process of realizing their need, making a purchase decision, and then going through the motions of completing the transaction, right up until using/consuming the product or service.
    • Be as specific as possible, do a customer journey map for a number of your real key customers. By taking the different approaches of different customers you are able to address a wider range of possible customer experiences.
    • How has social distancing affected these journeys, what different customer journeys does it create?
  2. Test and Assess your Customer Journeys
    • Don’t assume, its better to physically go through the transaction process as a ghost customer, not letting your staff or systems know you are internal. This way you get the real customer experience.
    • If you can, ask your customers to relate their own experiences back to you.
    • Are the real experiences like the journeys you mapped? Where are the differences?
    • Where are the critical decision-making and satisfaction points?
    • What will the impact of differing levels of social distancing be on your customer journeys?
  3. Identify critical touch points and outline the ideal experiences here

Most purchase decisions follow the same general process, your specific category will determine how in-depth each step is and the consecutive order of these. What are the key influences and factors taken into account at each step?:

  • Identify a need
  • Seek solutions
  • Compare solutions
  • Select a solution
  • Commit (or purchase)
  • Take delivery
  • Use/Consume
  • Reassess solutions
  • Products have quite different journeys to services but the steps above will still apply in some sense to both.
  • Assess what you as a business supply to your customers to assist them to complete a step and progress to the next – these are potential “touchpoints”. How have the touchpoints changed with social distancing?
  • What is the ideal feeling and response you would like your customer to experience at each step?
  • What issues or problems at each step would prevent them from experiencing the ideal?
  1. Define your ideal customer experience and set up systems/ training to achieve this
    • Set the standards/targets for the experience you wish to achieve (if not done already). This must be stated in measurable inputs. Stating “we want customers to be happy with our service” or “quick payment” is not specific enough. “Customer rating of 4/5 for service” or “payment transaction concluded within 3 minutes” are better measures.
    • Ensure your standards are realistic, but also that they are in line with or better than your industry standards and competitors. Are they still realistic in a social distancing environment? What changes and adjustments need to be made, what new measures in place?
    • Check again, can I realistically measure the standards I have set in place. Will it be easy for me to track how my efforts have impacted my customer’s experience?
    • Set up an Action Plan for how you are going to achieve these new standards. This may involve setting up new processes and procedures in your business. Ensure you have assigned roles, responsibilities, timing and budgets to your actions. Focus on high impact low cost interventions first.
    • Assess the expected ROI of implementing and achieving your customer experience targets. There is no point in implementing customer experience standards that mean you end up making losses vs. profits, but also take into account the lifetime value of a repeat customer vs. just the once-off transaction value.
    • Train all staff on these new standards (even non-customer facing) and how to achieve these. You may even need to investigate and implement new systems and processes to achieve your new targets. Once again, staff will need to be trained up on systems to actually deliver the experience.
    • Monitor your progress on your action plan.
  2. Track and measure customer experience interventions
    • Putting customer experience interventions in place is worthless if they:
      1. aren’t implemented properly, and
      2. don’t have any effect on the customer’s actual experience
    • Measure and then adapt your action plan and interventions to focus on what’s working or fix areas that aren’t.

Addressing Specific Social Distancing Customer Experience Issues

Online Display

For a large proportion of customers they will be now looking to buy categories online that they have never bought online before. Their ability to pick up, touch, turn, weigh items is now severely limited. In some way, their ability to compare items on shelf is also reduced. It is essential to provide as much information as possible to help rectify this. Some of this may include:

  1. Detailed product descriptions
  2. Product specifications including size and dimensions, weight.
  3. Packaging descriptions and what to expect when it arrives
  4. Good imagery – from all directions, preferably video as well.
  5. Functionality – for some products showing how it looks in use or in the hand helps hugely.
  6. Product comparison sheets or views: enabling side by side visual and specification comparison.

Online Purchase

Many people have been forced into making purchases online where they have avoided this in the past but also may have not made online purchases for such large (or small) amounts. Parting with money for items that they do not have in their possession creates a huge amount of perceived risk, which needs to be alleviated. Here are some ways to settle the nerves:

  • Guarantees and transaction cancellation options: Giving customers an opt out or money back option lowers risk hugely.
  • References and ratings: Show evidence of other customers successful transactions (for specific products even) to indicate you are legitimate.
  • External Verification: Verification from external online security or banking institutions is essential. Membership of official industry bodies also offers trust and an option of recourse for failed transactions.
  • Transaction Confirmations: your separate, written acknowledgement of your obligation and the details thereof (before and after actual payment) to provide your side of the bargain is a physical legal document customers can use to confirm an online transaction.
  • Delivery tracking: Showing you have already instigated delivery procedures shows you have accepted their funds and are fulfilling your side of the transaction.

Online Delivery (i.e. services)

This applies in only a few categories but is hugely important to them. For services, you need to ensure you provide as many tangible cues of the quality and value of your service as possible. Records and minutes sent after each interaction or meeting (including online) will provide physical evidence of value provided. MOU’s, contracts or scopes of work provided before delivery of the service is conducted will also help clients understand and have proof of what they will be “getting”. Itemize and “package” services as much as possible – give specific package names, design a service package look and feel, describe the service in detail and provide this as either a physical package that can be sent to the client or email/downloaded as a file which is their own. Gifts and useful physical items can also be provided as a “something” that clients are getting alongside with the soft consulting material. Regular recaps and results reports (in written form or verbal) on what has been done (actions and inputs) and achieved (progress reports, results) helps clients to realize what work has been done. Finally, listing the specific skills and experience and networks you have had to tap into to provide a service gives a more tangible display of the abilities clients have not got that they have purchased.

Home Delivery

More often than not this is the real moment of truth for a customer who has bought online, where their expectations can be compared with reality. We have all seen the popularity of “unboxing” videos on the internet that attest to this exciting time. Firstly, selecting a suitable delivery service that provides good delivery tracking and stays in contact every step of the way with the customer and you, the seller is hugely important. Managing expectations on when the delivery will take place and taking into account any change or queries from customers quickly and effectively makes a massive difference in the whole customer experience. Ensure customers always know where their delivery is in the process, and who to contact for more information. Many sellers offer a personal transaction assistant who communicates directly with customers throughout the delivery process. Secondly, packaging is hugely important, not only to protect the goods in transit, but to ensure the professional brand experience offered online is continued. Packaging also offers the opportunity to continue to communicate with customers at this critical time. Messaging that emphasizes this exciting moment can be put on packaging like “congratulations you can now enjoy your purchase”. Also include a thank you to the customer for their purchase, which can include a personal note as well as a gift voucher or free gift which shows how much you appreciate their support. Follow up the delivery always as soon as possible to check that the item has been delivered, is as expected and that there is no damage and, finally that the customer is satisfied. For more complex products or items this may be a good opportunity to explain or offer training on use. Finally, this is also the best time to get all important feedback on the customer experience, whilst it is all fresh in the customer’s mind.

Health and Safety Requirements

As the social distancing is primarily a health prerequisite due to the COVID-19 pandemic, most of the risk and uncertainty customers face is with health concerns. This applies to both their own health , as well as being seen to comply with legislative health requirements. Provide as much evidence of the specific health and safety steps taken to ensure the health of both customer and staff. This can be in the form of physical barriers and signage as seen in many retail outlets, but also safety certifications, checklists and behind-the-scenes steps and procedures taken, which can be shared with customers. Businesses that can prove they have taken significant steps to ensure they are safe and secure will reduce the perceived risk and uncertainty of their customers in transacting with them.

Warmth and Personal Rapport (especially for Sales)

Business people in a video call meeting

How do you replace or replicate the benefits of face-to-face interaction? We know that body language represents the majority of our interpersonal communication so what to do when this isn’t possible? Luckily for us, we live in a digital age where multimedia, incorporating voice and visual imagery can be used relatively easily, and to ensure we can keep our personal relationships intact, we need to use this. Video calling is essential, especially in initial stages of the client/customer relationship-building phase. Ensure the customer can see your full head and shoulders. Mix up your call venues with personal office surroundings as well as other business related areas, to introduce them virtually to your working world. Don’t try and be constantly too “perfect” with virtual backgrounds, perfected offices, etc. as this removes the realistic and personal flavour of these calls. Train yourself to be natural, warm and friendly over video and look directly into the camera. We all need to develop the skill of the professional presenter or actor, and connect personally with the viewer. Try and use a normal, warm friendly conversational tone and facial expressions, as formal approaches are exacerbated on camera. Turn your own view of yourself off if this helps.

It’s also important to include as much video and live content of you and your staff, physically in person, in your sales and media channels to help potential customers form a more personal and visual reference for you and your business. Mix up full body views with close-ups, to provide both the whole body language and specific facial expressions.

Keep video calling short and sweet. Try and provide detailed information in document form upfront and use video contact to discuss issues and problems (and deal with emotional responses), rather than delve through fact and detail. Work on ways to start and end calls professionally and warmly to avoid awkward silences. Where bandwidth or internet speed is a problem, use video to establish a visual reference and then revert to audio only. Ensure you have a good, friendly profile face shot to maintain a visual reference when using audio only.

In Closing…

I do hope this article has prompted you to the realization of the importance of continuing to ensure the best possible customer experience especially during this time of uncertainty and I trust I have provided some seeds of inspiration and advice on how to do this in the world of social distancing.

Please let me know of any specific challenges you have had in your own business with regards to customer experience over this time.

I’d also appreciate your comments and input on any of the suggestions I have offered here or any additional advice you may have to offer businesses out there from your own experience.

Keep safe, keep going forward!

Regards

Peter Flemmer

5 Key Questions to reassess your marketing strategy during an Adverse Event like Covid-19.

when will you return signage

Photo by P C on Pexels.com

Many businesses will need to do a full assessment of their marketing efforts in the case of an adverse event (for example Lockdown due to Covid-19, or extended power losses due to Loadshedding). In many cases how we do business can be changed forever, or a market we are positioned for can be changed or lost. Here are 5 key questions to answer in your business to start to determine a way forward and develop a continuity plan during, and after these kinds of events. Many of the questions will not have a complete yes or no answer and it may serve you to work out a % answer (e.g. I can do 60% of the work I normally do, or 40% of my staff may be able to do their work from home)

 1. How has this event affected how I can operate my business?

This question relates to the issue of your own internal operations, running as normal before the adverse event.

-Can I operate remotely, can my staff?

-Can I get necessary supplies? How are my suppliers businesses doing?

-Can I still deliver goods and services to my customers/clients?

-What work can I still do (what % of your normal costs/revenue is this)?

-What is the minimum level that I can operate on?

-What will “normal” working conditions be like after the adverse event? What additional or different requirements may be in place and how will this affect efficiency and costs?

2. How has this event affected how my customers/clients do business with mine?

-Can my clients still operate or to what extent can they still operate?

-What issues will they have running their own business?

-Would they still need/demand my current services during and post an event like Lockdown and to what extent may this have changed? What new dynamics within their business will we have to take into account?

3. Will my current target market/customer base still be able to fulfil my business needs during and post an event like Lockdown?

-What % of my normal business levels/targets will my current target customer base be able to fulfil? Is it sustainable?

-How long until I can regain the “business as usual” status with customers I had before the event, if ever?

-What key changes may need to be made in how I operate to adequately service these existing clients and how much will these cost? Will my business model still be profitable?

4. What new opportunities will be presented by the changes due to the adverse event?

-What permanent changes in behaviour and the way people do business, or even structurally and in legislation will be effected by the adverse event?

-How far reaching are these changes –local, national, regional, and internationally?  How do the changes manifest in different areas?

-What new needs/requirements are being created that I can take advantage of with:

           -my current offering

           -my business skill sets/experience

 -my business assets (equipment, people, processes, location, etc.)

 -my target market

5. What changes am I prepared to make to my business to survive and grow during and after an event like Lockdown?

Depending on your own situation, you may need or wish to engage in all three of the options below, they are not mutually exclusive, but will each require their own resources, so we recommend you determine exactly which share of your future business each option represents and apply resources appropriately.

Seek different or additional target markets with my current offerings? (only works if your current offerings would be in demand or if you can find new markets unaffected by an event like Lockdown)

Seek to service my existing target market with additional or adjusted offerings, related or unrelated to my existing offering. (and to what extent would this cover the shortfall in current business –remember if your customers can’t afford your offering during an event like lockdown, the chances that they can afford additional offerings are slim, unless the additional offer is a critical offer/item during an event like Lockdown). How will this affect my profitability? What changes and investment need to be made to introduce new offerings.

Seek to develop a new offering to a new target market (i.e. start a new business). What transferrable skills and advantages do we have that will be useful in a new opportunity presented by the adverse event? How quickly and easily can we access and break into a new market with a new offering?

Thank you! I apologize that there were slightly more than 5 questions here! We hope that going through the process of answering these questions has led you through some important considerations for your business and that you can start to see a way through and past this current, and future adverse events. If you would like to delve into this process in more depth, please don’t hesitate to set up a chat with me:

Kind Regards

Peter Flemmer

Some additional useful links:

https://www.livemint.com/news/india/the-business-plan-for-life-after-lockdown-11586791916823.html

https://robust-move.flywheelsites.com/wp-content/uploads/2020/03/The-Small-Business-COVID-19-Survival-Guide.pdf

https://www.entrepreneur.com/article/348184

https://rekordmoot.co.za/161599/tips-for-rebuilding-yourself-and-your-business-after-the-lockdown/

https://www.retailsuitemedia.co.za/post/practical-steps-during-and-after-the-covid-19-lockdown-for-business-recovery-and-growth

https://www.heraldmailmedia.com/news/local/owners-look-at-business-in-and-after-lockdown/article_7a58d549-0070-5088-9d7f-c542e65100c9.html

https://theconversation.com/what-will-the-world-be-like-after-coronavirus-four-possible-futures-134085

I think Marketing is like Charity: It begins at Home.

Have you ever been to a great restaurant, one that you’ve heard about and wanted to go to for ages, and when you got there, full of excitement and wonder, your waitron messes up your order before you’ve even got your first drink? Or how would you feel if you bought a BMW 3 series and the salesman gave you a plastic keyring and bottle of cheap sparkling wine as a sweetener? The answer is: pretty underwhelmed! My point is, it is your own staff who can often do the most damage to your brand. This is why marketing needs to start at home, with your own “family”, your staff.

Many business owners sadly overlook their own staff as ambassadors of their brand. “My staff aren’t my target market” and “ They should know the business they are in, anyway” are some of the comments that excuse spending time and effort (and possibly money) on educating our staff about the brand experience of our product or services.  And it is a severe oversight.

Your customers or consumers certainly don’t have the same view. In my mind, everyone who works for a company represents that company and is held responsible by me, the consumer, in providing the product or service I expect. I am sure you are all the same. I don’t separate the Caltex petrol attendant from the Caltex fuel that goes into my car. They are all part of the perceived brand experience, and leaving staff out leaves huge gaps in what consumers experience.

We must make sure that our staff are all behind our brand experience, that they understand exactly what it’s all about so that they can help deliver the full service. What’s more, your staff are an excellent testing ground for how clear and effective your marketing communications are: if your own people don’t understand you – people who work on and with your brands every day – how can you expect the public to? So how do we market to our own staff?

Here are 5 tips for turning staff into brand ambassadors:

1) Include staff in your marketing strategy: ensure they are part of your marketing strategy, treat them as a sub target market if you like, allocate some budget to bringing your brand alive for staff.

2) Train your staff on your brand experience:  You can’t expect a consistent brand experience delivery unless you train your staff first. Brand experience training should be part of every staff member’s induction and repeat training carried out for each staff member at least once a year (for customer facing staff I would do this every quarter).

3) Treat staff as “insiders” with preferential access: People who work in a company are expected to have inside info on new developments and secrets. Give them the inside track so that they feel like they are special and have special knowhow on your brands.

4) Ask staff for input: Secretly your staff believe they are experts on your brands, and believe me, they are seen as the experts by their friends and families. So ask them for advice and input every now and then, and if you  get them to contribute you may just be surprised at what value they can add. Also, nothing boosts morale (and fuels office gossip) like the story of the office cleaner who came up with the last marketing campaign (and got recognition for it!).

5) Give staff the tools to be your ambassadors: Just like any target market, you want to give your staff ambassadors the tools to promote you. Tell them about your events, show them your ads and PR articles, share your facebook posts. They can’t spread the word alone, so give them the tools of the trade.

The 5 tips are just the start, but I hope you have realised how important your staff are in your marketing strategy and brand experience delivery.  Creating Brand Ambassadors in your business can often be the difference between winning and losing in this tough market place, and it’s one of the most cost effective strategies out there!

Please share any other strategies you know for turning staff into effective brand ambassadors …

My take on the new Int’l Heineken ad

I recently read a controversial opinion on the new Heineken “World’s Apart” advertisement published by Mark Ritson, a UK-based professor of marketing and host of Marketing Week, a marketing commentary blog site. His article Mark Ritson: Heineken should remember marketing is about profit, not purpose basically asserts that the Heineken ad won’t really affect sales or profit for the company, and is therefore a waste of time and money.  Watch the ad for yourself here: Heineken “World’s Apart” Advert

As an aside, I must confess that I agree with Ritson that marketing’s key role is to create and enable sales and profit for a business – both now and in the future. But there are (and should be) many ways to skin that cat.

Firstly, I would contend the ability of just any advertisement to directly ( I mean immediately) affect sales. People generally can’t buy off their TV’s ( though youtube video’s with online shopping links are changing this). Even adverts with distinct sales push elements and price specials (like most supermarket ads), don’t directly create sales.  They influence the consumer purchase decision. I would say perhaps only marketing materials at the point of purchase could possibly be measured to directly effect sales (and then sometimes not so effectively).  This is because we know that there are more complexities to a person’s decision making than just seeing a product they may need and buying it. So contending whether an advert will or won’t directly affect profits is already incorrectly interpreting the role of adverts in the consumer purchase decision.

Secondly, I gathered he was promoting a sell, sell, sell approach to all marketing, and eulogising purely functional marketing. This then purports that consumers all make decisions based on purely functional criteria. Whilst I agree that function (and features) do play an important role in consumer’s criteria, there is still the largely important (and largely misunderstood) area of emotional factors that also play an integral role. Sure, some product and service categories tend more to the functional (like bread and milk you might suggest), but there are many categories where an emotional link to the category or brand plays a huge role in the purchase decision.

Now to the Heineken ad itself. I certainly believe that beer choice is highly emotional. My experience in beer research has shown me that, though many consumers can’t actually tell their brand in a blind taste test, they will vehemently defend their choice of brand. This is emotional bonding. We don’t know what Heineken’s objective was with this ad, but without a “Buy a 12 pack now for R59.99” tagged on the end, I think we can safely say the aim was more emotional connection than a sales promotion, yes? And yes, it is using a generic aspect of beer (bringing people together) to do so, but as some other commentators have contributed -the first to say/do it is the one who owns it. So a reasonably long, but interesting and emotionally engaging ad it is, and the message comes clearly to me at the end, and I do believe that it is memorable as a Heineken branded ad (contrary to Ritson, I don’t believe that Heineken, a well established brand name, needs to flash its branding all through its ads).

Not only is the ad part of a larger campaign that Heineken have been running called “Open Your World”, which is about expanding horizons (and also has a functional beer “opening” angle), it is also consistent with Heineken’s long term “International Beer”  image which has been the centre of their marketing efforts for ages. So, as a concept it is both consistent with Heineken’s brand (and therefore reinforcing all the previous messaging) and showing that Heineken has a higher purpose than just beer sales. This is important because we have been told that in this generation of marketing, a brand that doesn’t have a higher purpose is not viewed as favourably, especially by our “Millenials”.

However, if we  can assume their aim was to create an emotional connection to 1) make users feel more loyal and connected to the brand (and thereby influence long term sales) and possibly, 2) get people who hadn’t considered using Heineken, to form an emotional reappraisal of Heineken and contemplate including it in their repertoire, they have failed. They might have got away a little with 1, but if they were aiming at Millennials for 2, they certainly failed. But Why?

I tend to agree with Ritson that it won’t help with sales, but for a very different reason. I believe they made a critical error with trying to make an emotional bond with Millenials.  They tried to get emotional attachment through uniquely showing how people who are different can have more in common through beer. But, they weren’t the first with that ad concept -they copied an idea and so the whole emotional bond they are trying to make feels faked and forced. Fail!

If you don’t what I’m talking about take this Danish TV 2 ad: Danish TV 2 Ad, which has 4 million views, and I bet most are in their Millenial Target Market. It seems to be a Danish Phenomenon that has grown, as Danish travel site Momondo also did a “more that unites than divides us” campaign, which I am sure many of you have seen,  and suspiciously (for Heineken) titled: “Lets Open Our World” See it here: Momondo campaign. All of these play on the whole “we’re more unexpectedly alike than our differences” theme, and more authentically than Heineken does.

Heineken has tried to make a conceptual move from “quirky, funny beer ads” to “thoughtful world connector ads” in one big jump, and then by copying someone else’s work. Eish! Heineken actually comes across as a feeble follower of another idea, losing innovativeness, authenticity,  and ultimately, respect. Emotional connection? Perhaps amongst the social media unconnected, but why at the cost of your opinion leaders?

So do we need to make brands profitable? Yes! Do we need to market functional attributes of our brands to make sales? Yes! Do we need to market to the emotional sides of our target market to make sales? Yes! Can we do this by rehashing someone else’s cool idea…I don’t believe so….. and hence Heineken’s error.

What do YOU think -was Heineken’s ad a like or a fail?

 

(Image is screengrab taken from Heineken’s “World’s Apart”  video published on Youtube -I claim no rights or property to this and all remains Heineken’s)

Why do we let our clients set our fee?

So who are these crazy guys who don’t give a price but ask for a price instead? That’s right, it’s these Wild Dogs right here! Yes -we actually ask our clients to let us know what they are prepared to pay for our services.

You might think we get inundated with requests for full marketing strategies for just a hundred bucks -and we do, but the cinch is this -if we don’t see the value, we don’t have to take the job! Just as a client who doesn’t see value in our work doesn’t have to choose us.

By requesting a client to propose our fee, we can determine just how valuable our service is perceived by them (and how important it is to their business), and what effort and dedication we should be giving the job from our side.  This also automatically lets us know whether the client can afford our level of service. Of course, we can tone down the exact level of input if required to be flexible downwards, and increase the back-end input and effort to be flexible upwards, but the inherent quality of service (based on our knowledge and experience) will be of a certain level anyway, and put us in a certain price band. It’s then our call as to whether we “take on” a client at the proposed rate or not.

Sometimes, when things are quiet, or if it’s a really interesting job, we may actively choose to accept a slightly lower fee (though going TOO low will erode our own reputation and  brand equity), and conversely, when we are already busy or the job involves some really thorny items, we may not even accept a generous fee. This evidences true market dynamics at work and the temporal and personal aspects of value.

Through this pricing policy, both we and our clients are satisfied and happy with the exchange -they pay fair value and we receive our fair due.

This obviously works better for service offerings, but who knows, maybe we’ll all work like this some day?

3 marketing lessons I should have used in high school

I was thinking back to my high school days and wondering what I would  do differently if I could go back in time and do it again, and I realised my marketing experience has taught me some valuable lessons that would have made those days much easier on my teenager self. I decided to share these with you, as they aren’t only applicable to high school teenagers, but to your marketing in your business as well:

1) Never go for the most popular pretty girl.

The competition is just too fierce. She has so much choice that she can afford to be extra picky and difficult (which makes her less desirable anyway).  Even if you were the most popular guy and she was into you, it would still be better to go for the 2nd or 3rd  prettiest girl, who would appreciate you  way more. In your market, are you going for the customer who has everyone vying for their business? Often these are the most difficult customers to please.

2) Don’t try to be “cool”,  try to be yourself

The coolest people didn’t have to try to be cool, they just were. No matter how much you try, you can’t “be” like someone else better than they can be –you’ll always come second best. The only thing to do is to be yourself to the best of your ability. If you really do this well, you’ll stand out naturally and those who WANT to be associated with the “real you” will be attracted to you. If you are never being the “real you”, those who think they know you will be disappointed when they come to know you and you are never really authentic in the eyes of those who see through the act. Are we letting our own brands stand by themselves and not trying to imitate our market leader or competitors?

3) Don’t let others define your success

At school other people always set the bar for us: teachers, parents and coaches all told us what we had to achieve to be successful. This was all based on their ideas of success – an “A” or “B” aggregate, the 1st team in Sport, Prefect, etc. However, no one knows your own strengths and weaknesses and situations like you do. For some, an A was as easy as 1-2-3 whilst others battled to pass at all. No one taught us to set our own goals and measures for success that were tailored to our own situation, or said it was OK not to be good at everything. No one in business is good at everything, that’s why we have different jobs and roles. We set our goals to be better at what we already do well, and get help for those parts we aren’t good at. Are you letting market norms and external factors dictate your measures of success?

What lessons have you learned in business that you could have used during high school? Please share with us.

Do I have a Brand?

I think we all ask ourselves this at some stage. Some of us reckon that if we have a pretty logo with our company name on it that we’re sorted. Isn’t it just supposed to be something that helps people recognise my company or one of my products/services?

If that’s how you want to define your brand, than that’s fine – but it could mean so much more…

Businesses that build really powerful brands, brands that are actually worth money approach their brand differently. They view their brand as a symbol that represents the sum total of all the experiences that each of their customers, past and present, have had with their company, product or service. Every positive experience that customers have had, adds to the value of the brand, and every negative experience that customers have had, detracts from the value of the brand.

This is a significantly different approach to the first one mentioned, isn’t it? Through this approach, we can see how brands like Google, Microsoft, Coke and Nike have been built up into the hugely valuable brands they are today. By continuously seeking to add to their brand’s value through delivering positive experiences to customers, over and over again, they have built themselves into icons.

However, this approach is not one that only massive corporates can buy into. Any size business can aim to make every customer experience a positive one -in fact, it should be easier shouldn’t it? Less customers and more management involvement should ensure we are doing this – isn’t this what we management should be ensuring as their main focus anyway?

Let’s also define “customer experience” here. I am not just referring to the customer enjoying the artisan bread loaf they have just bought, or being happy that their lawyer just won their lawsuit for them. Those are important positive experiences to have and are pretty key. However, there is so much more that defines the customer experience: how easy it was to do business, how they were treated personally when doing business with you and more – these all add up to the total customer experience and can affect your brand’s ultimate value positively or negatively. If you view your brand in this way, it not only acts as a reminder that whatever you place your brand on must always replicate that positive experience you are aiming for, but also ensures you are focused on building that sum of positive experiences at each and every turn. Your business can only benefit in delivering excellence to your customers, and your “brand” will become a valuable asset over time as well.

(Image belongs to Andybutler.net)

Everyone a marketer

If you are in the marketing business, you will have heard this phrase touted about by the professionals, more often as a derogatory term, as in: people start a blog or LinkedIn profile and everyone thinks they’re a marketer now!

The fact is, we SHOULD ALL be able to do some marketing. It is one of the essentials of business, just like knowing how to do some simple financials or understanding the basic principles of people management. Heck, any marketing department head or consultant should be making it their aim to make everyone in the organisations they work with into marketers –that’s what separates the average marketers from the great. When everyone in the business is aligned to the unified marketing approach of that business, then the whole business wins.  Why? Well instead of having just the marketer or marketing department, you’ll have everyone  driving your marketing strategy with just as much passion as you do, and that just makes sense, doesn’t it?

So here are just 3 tips to help make “everyone a marketer”:

  1. Make your employees a target market

If you can’t convince your employees with your own marketing message, what hope do you have of convincing anybody else? Even if your product may be the most expensive diamonds in the world –if your employees can’t understand and rave about why those diamonds are so worth it, even though they could never afford to buy one, chances are your brand message is dead in the water before you’ve got your skis on. Treat them like a target market –advertise to them, promote to them, get them to join your social media platforms.

  1. Involve employees for better idea generation

You have all these people working under your brand umbrella who are desperate to defend why they work there. They are also bursting with good ideas about how to make your offering better, in all sorts of different ways and from the ground up. Often our employees may have a better feel for how the brand is behaving in the marketplace and this feedback is priceless. By getting employee contributions to your marketing strategies and campaigns, you not only get better ideas through bigger groupthink, but you involve them in the process, and that’ll get them even more pumped up about the marketing strategy in the end.

  1. Give employees the tools to promote you

We can’t expect that just because someone works for you, that they will know the most effective ways to market your offering. Think of them like a pack of sporting dogs –so eager and so ready, but they need you to show them the rabbit, and off they’ll go! Feed them the language and terminology they should use, let them know who to target, let them become familiar with your USP and backup evidence, invite them to share your brand blogs and promotions. Send out media advertising schedules and let them know about your events –and watch them run with it!

Have you got some more tips to share? Please share them with us here. Do you disagree with opening up marketing to the whole organisation? Let us hear your reasons…