Assumptions: Business Booby Traps to Avoid
I experienced some strange business behaviour this January. It’s February now so I’m sure business behaviour will be back on track. Small Business is all about learning. The big lesson I’ve learnt recently is never to assume anything in business. Instead, try and employ contingencies to manage expectations and outcomes. Here are a couple of common assumptions made by business owners and some suggestions for how to remedy them.
Assumption: That a customer who says they will pay – actually will
Remedy: Commence work only after a deposit is received in the bank. Only provide goods/services on ‘appro’ if you are prepared to lose them or receive nothing. (It’s a bit like lending money and books!)
Assumption: That clients will follow agreed timelines
Remedy: Develop contingencies and possible penalties for failure to work to timelines. Make these conditions clear in proposals and work plans.
Assumption: That customers know when you are on holidays.
Remedy: Make sure when you take a break you alert people in as many ways as possible e.g. on a Xmas card, email signature, answering message, office door or website. There is nothing more annoying to a customer than not being able to reach you when they assume you are there.
Assumption: That customers are happy with your product or services
Remedy: An independent customer satisfaction survey can let you know if your assumption is right or wrong. How do you know this? Many customers will not tell you they are unhappy they will just walk with their feet. It is important to know how your customers are really thinking. Unfortunately you (as the business owner) are not always the best person to elicit this information.
Assumption: That staff in Australia actually work in January
Remedy: Give up on expecting clients to be at work, or achieving their tasks – just take the month off!
Assumption: That past customers will contact you if they need your services
Remedy: Make contact with past customers to remind them of your services and enquire about their needs.
Please feel free to share other assumptions you have made?
Marketing Gourmet Food and Petrol Together: Can it work?
Is it possible to to sell gourmet food, wine and petrol all at the same place 24 hours a day… and have it work? Before my recent trip to Tasmania I would have thought no. But despite being ‘marketing challenged’ by Davies Grand Central in Launceston I am inspired by their flexibility to meet the needs of customers and stay relevant in a changing market place.
Davies Grand Central is a family owned business that has been in operation since 1928. They operate out of a petrol station and yet instead of the usual fast food, packet of chips and chocolate bars they sell fresh organic produce and packaged gourmet food. They also have a cafe service which provides a range of healthy and hearty snacks that meet specific dietary requirements along with the best coffee I tasted in Tassie.
Are you ready for the next surprise? They are open 24 hours a day, seven days a week. Despite flinching when I read the word ‘fuel’ in the same sentence as gourmet food and wine in their promotional material, I have to applaud Davies for pulling off a very brave brand extension. They have developed a selection of products and services that work for the locals and tourists alike. They have modernised their offering and positioned their business in a unique and relevant way for this generation. They now just need a website!
Managing Customers at Christmas
I’m not sure exactly what is supposed to happen at Christmas but it is important for customers that their goods and services are delivered by Christmas. Now that is fine when there has been plenty of notice, maybe a bit of upfront payment and no pressure. However……. there is a Christmas madness that takes over both consumers and business customers alike. Customers that throughout the year have been reasonable, easy to work with and polite, seem to change into the Customer Christmas Monster – demanding, unreasonable and transfixed on having all loose ends tidied up by Christmas. This dilemma was discussed at my business network meeting and these are the strategies we suggest for small business.
- Have a cut off date and advise your customers of this at the earliest possible time. This can be done on invoices, website, Xmas cards etc.
- Offer a priority pricing arrangement. Higher pricing for a quicker result. This usually sorts out the real priorities from the automatic Christmas Monster response of “I’d like it before Xmas”.
- Have a customer booking system which starts a couple of months out from Christmas.
- Don’t be afraid to say ‘I’m booked up’. This is particularly important if you are the service and you have no hours left in the day.
- Develop a contract with all clients about what is expected of them in order to achieve their deadline. Make it clear that a ‘by Xmas deadline’ cannot be guaranteed if they are late delivering their components.
- Offer incentives for customers to postpone projects e.g. discount rates in January.
- Start part of the project prior to Christmas so that customers don’t feel as though they are being put on ice. For example send out some information for customers to complete or information for them to read to assist with the project.
- Ask for upfront payment for the ‘rush’ jobs. There is nothing worse than busting a gut and not getting paid!
Above all remember that after the 24th of December all will be forgotten!
Feel free to share you customer christmas dilemmas and solutions.
Yarram Positive Marketing that Works!
Main street of Yarram
Last week I was lucky enough to travel to the small town of Yarram which is approximately 3 hours south of Melbourne in Gippsland. My impressions of the town was that it was a really energised and interesting place. I was surprised that a population of just 2,100 was creating such a buzz. I then met Julie Nethercote who is part of a business group could YES [Yarram Economic Strategy] Group and discovered a great marketing campaign that was undertaken by the YES group to reduce the number of empty businesses and houses for sale in the area. This explained the buzz.
Target:
Reduce the number of houses and businesses for sale in the area.
Results:
There were 400 houses for sale in the area, now there are only 80 for sale.
Method:
1. Positive Approach
The Can Do attitude of organisers clearly paid off and has made a lasting impact on the mind set of locals. All the businesses I met had a can do and energised demeanour.
2. Social Media
The local high school students put together a video posted on You Tube encouraging people to come and visit Yarram.
3. Web Page
A specific website was set up with a registration form.
4. Broader Media
A television crew were invited to come to the open day, they did and covered the story.
Costco – Nightclub Marketing Strategy in Shopping
What makes people
- Line up for 30 minutes to get into a store that is not having a stocktake sale?
- Pay a member joining fee to be able to purchase at the store?
- Spend a lot of money to supposedly save money?
Answer: Costco
I considered this phenomenon beyond my comprehension. Then it struck me – Costco is employing classic ‘nightclub’ marketing strategy and it’s working.
The Journey to Costco
It took two attempts. The first attempt took 15 minutes of waiting in a queue only to realize that it would be another 45 minutes before could enter the store. My attention span is about the same as a Jack Russell Terrier so we aborted our first Costco operation just before I was about to poke knitting needles into my eyes for entertainment. It became clear that Costco to a 9 and 12 year old is the equivalent of Melbourne’s Disney Land and an absolute ‘must see’. Hence we had a second attempt at visiting the land of food in big tins which proved a far more strategic operation.
Shoppers wait for doors to open. What a way to spend a Sunday morning!
We Got In!
Melbourne's answer to Disney Land. Enjoying one of the rides
Arriving Sunday morning about 20 minutes before opening, we easily found a park and shuffled into the queue behind other shoppers (who were crazier than us and had arrived even earlier). Our completed online membership application in hand, we were ready for the doors to open. The crowd’s excitement started to build at the 15 minutes to opening mark. I was reminded of the scene in Willy Wonka and The Chocolate Factory when the five lucky ticket holders were waiting behind the factory gates. There was no Gene Wilder to greet us but there was a Costco employee who was shuffling excited shoppers into queues of members and non members. Yes there was definitely a buzz. Maybe it was just shoppers’ anxiety.
Inside Costco the Surprises
- There is an in house bakery
- It is just like shopping in America and they had cooked buffalo wings
- They sell digital grand pianos and kayaks
- The choice of brands is narrow
- The staff seems to enjoy their job and love Costco
- Customers were verbalizing ‘what a good deal it was to be a member’ and were encouraging their friends to join.
- The most popular purchase is humungous packs of toilet paper.
Ailsa from AP Marketing Works on her throne (of toilet paper).
Similarities between Costco and a Nightclub
1. There is no interest in a nightclub that doesn’t have a queue
Clearly the interest in Costco has been caused by people seeing the queue
2. You expect to have to wait to get into a nightclub
Shoppers are prepared to wait to get into Costco
3. Gaining membership to a nightclub means you are in the ‘in crowd’
Membership of Costco means you have a special queue
4. Even though a nightclub might is rubbish you tell all your friends it was fantastic – to justify your investment in it.
There is a lot of hype about Costco which I believe isn’t justified
5. Upon leaving a nightclub you go and eat crap food
Upon leaving Costco same – at their cafeteria
6. Word of Mouth makes a nightclub
Word of Mouth is making Costco
Yes shoppers continue to practise their lining up skills to leave the store!
The one big difference between Costco and a nightclub is that at a nightclub there is never any toilet paper!
Economic Constipation not GFC hurting Small Business
This year in business has definitely been an interesting one. One trend I have noticed is that consumers and other businesses are holding on to their money. It’s not that they don’t have money – it’s just they are not letting it go and this is causing problems or more bluntly – it’s causing economic constipation. Without getting too graphic with this analogy it’s pretty obvious from the businesses I work with that this is not a good thing.
Are you holding off on paying suppliers because customers are not paying you? That has been the trend but it causes a blockage that impacts on business momentum. Businesses are now having to spend more time chasing up money rather than being innovative and creative in their businesses. So from one business owner to another – let the money flow and pay your suppliers. Discuss the situation with your suppliers and customers and see if we can create a business society ‘metamucil’ and unblock the cash. Lack of cashflow has and always will be the biggest threat to a small business.
The economic downturn isn’t what’s hurting businesses it’s everyone holding on to their money and not paying that’s making things tough. Let’s not turn economic constipation into a contagious business illness!
Small Business Owner’s Sick Policy
Sounds a bit crazy I know particularly if you are a one person band, but when you get sick how does your business cope? How do you manage your customers? How do you manage your recovery? If you are like me and many other business owners out there, we don’t have time to get sick and we usually take preventative measures to avoid sickness. So when we do get an illness it often takes us by surprise and can throw ourselves and our business into panic. The dilemma is if we don’t work – we can lose business but if we do work – we can lose customers!
To avoid this, I have developed a sickness policy for myself so that I can protect my business and focus on getting better.
1. Early detection that my brain is fuzzy. This is really important to identify that I’m not performing at my peak.
2. Cancel any meetings scheduled for the next 48 hours.
3. Notify all current customers as soon as possible and advise of illness and potential delays to projects.
4. Set a time to reconnect with customers to update them on return to work date and deadlines.
5. Go to bed and get well.
6. Reconnect with customers at agreed time and advise.
7. Continue process until better.
Reasons to stay away from customers and work when unwell.
- Your brain doesn’t work as well and you might miss important information or forget crucial details.
- Your work won’t be of the same quality as when you are well – this may impact on your brand.
- You may be grumpy with your customers.
- You may make poor decisions.
- You will delay your recovery.
What do you do to handle things when you get sick?
Avoidance – Small Business Marketing Enemy No 1 Part 1
Avoidance is a natural human instinct and can be helpful in situations like avoiding being hit by a car. Avoidance in business however, can have a damaging effect and actually put your business at risk. Here are three common things business owners avoid and why.
1. Don’t want to hear negative feedback so avoid all forms of customer feedback
Benefits of avoidance
- Don’t have to change anything
- Don’t have to hear negative feedback
Cost of avoidance
- Potentially lose customers
- Become irrelevant in the market
Gains to be made
- Improved product or service
- Better relationships with customers
- Good ideas and positive feedback
2. Saying what needs to be said. Telling a customer you are late with their product or service
Benefits of avoidance
- Don’t have to deal with customer reaction
- Don’t have to be responsible for a ’stuff up’
Cost of avoidance
- Customer will be annoyed
- It creates a drama
Gains to be made
- You will feel better
- Customer will appreciate your honesty
- Problem solved
3. Not looking at the financials – hoping things are ok
Many businesses let things ride for too long. Often stressed, it is easy to just hope things will get better – or freak out. Usually when you actually confront the situation you will find that it is never as bad as you thought.
Benefits of avoidance
- Not having to change anything
- Not having to face scary news
Cost of avoidance
- Anything from a little bit of money to losing your whole business
- Loss of control
Gains to be made
- Having the information to better run your business
Tough Times or Tough To Update Your Database?
Q: When customers move on – how do you stop them from moving on from your business?
A: Keep contact details and follow up on returned mail.
Why don’t businesses care enough about keeping customers to keep their databases updated? The cost of changing a record is minimal compared to the cost of finding a new customer to replace the last. Yet many companies particularly those who have access to extraordinary information about customers, are the worst offenders.
I have personally sent back letters from superannuation, insurance and utility companies stating that the person no longer lives at the address. What happens? Nothing! A month later there is another letter.
Apparently everyone moves on average once every seven years. Business should be prepared for this and have systems in place. Why don’t companies track down customers rather than lose them? Have they not heard that it costs 10 times more to get a new customer than to keep an old one? My bet is that a customer would be so delighted to be tracked down they would be happy to continue doing business with you.
Are times tough or our businesses just slack in keeping customer contact records!
Small business can gain an advantage here.
- If you haven’t checked your customer’s details in the last two years – you should.
- Try and keep more than just address or phone number try and get both
- Most people move within one kilometre of their last residence – it’s not hard to track them down they may even have the same phone number.
- The money or investment in tracking down customers will be less than finding a new one.
What Australians are Thinking Right Now
Recently I attended a breakfast by the Australian Marketing Institute where David Chalke from Quantum Market Research gave a presentation on the latest social research into how Australians were feeling about the GFC and how this affects marketing right now. It was an excellent presentation relevant for all businesses. A take home message is to identify some trends that affect your customers and take action to work within the way people are feeling. Here are some findings
- Optimism is down since 2001 and Australians think cautiously about the future. They are worried about loss of control and are therefore risk adverse.
- Looking for old fashioned values e.g. honesty, frugal, prudence
- Family needs come first.
- In the past 2-3 years Australians are feeling like they don’t have time
- Too many choices is stressful
- Currently revaluating and also consolidating
Smart Marketing to do Right Now:
- Reinforce your brand values particularly if they are value for money, honesty, making it simple and saving time.
- Promote your full range of services that your customers may not know about
- Promote why your product or service is value for money – how does it save the customer money or time or make the customer money.
- Promote how does your product or service impact positively on family life
Other gems thank you David.
- Tough times don’t change the basics
- Things happen a whole lot faster
- Opens up weaknesses in your marketing mix
- Pre-existing social trends accelerate
- New opportunities open up
- Well run businesses thrive
