Walk into retail shopping centres these days and rows of shops have gone to the wall. What went wrong? Did these business owners know what they were doing? Did they stop creating value for their customers?
Very often we can trace the downward spiral in a business to the customer value proposition. A what? A value proposition really just means all the benefits a customer receives in return for payment.
The danger of an iceberg is what lurks underneath – in business poor customer service signals a value proposition that’s somehow got lost along the way. Here are some warning signals:
• Call centres that force you through menus and make you wait and then the personnel have no clue how to solve your problem.
• Websites run by marketing experts who don’t answer queries on simple things like shipping charges.
• Household repair service contractors who take down your details but never get back to you to set up time to meet with you to assess your needs.
• A clothing shop that sells you long-sleeved shirts with buttons that come off after the first wash.
• A daily newspaper whose subscription “service” is so cumbersome that it takes weeks to finalise a simple annual subscription.
• A credit card company that tires to lure you into catalogue purchases with little understanding of your needs, aspirations and lifestyle.
Some of the larger businesses that allow these things to happen can get away with turning customers away but for the smaller business it can be deadly.
When you drive under normal conditions you might glance at your dashboard to check key indicators like fuel and oil. But driving alone on a country road at night wouldn’t you watch your dashboard with a much sharper eye? Isn’t it amazing how some businesses riding through the economic storm don’t keep their eyes on their dashboard, constantly looking at key indicators — customer satisfaction levels, cash flow, debtor days (see financeglossary for a good example) and shrinkage levels.
One restaurant owner I interviewed recently told me that she watches her shrinkage by conducting daily stock takes, closely watches portion size slippage and works overtime to come up with ideas to attract more customers.
A smaller business may find it relatively easy to brainstorm the key indicators for their business — and keep their eyes fixed on what they believe is crucial for the survival of their business. Whatever the indicators selected, customer value is vital. Lose your focus on this one in a changing market and you will soon find yourself in serious trouble. Customer value parity is useless in today’s competitive market.
Smart business people who want to thrive in any economic conditions practice these methods to keep their business healthy:
• Spend time using proven methods to generate ideas to promote their business and achieve higher sales volumes in low-cost, high return ways.
• Ask for advice on how to implement systems that reduce shrinkage in their business if their own methods are not effective.
• Recognise that when economic times are tough to implement controls to stop debtors endlessly delaying payments with easy-to-implement practices.
• Resist dishing out generous discounts to all customers regardless whether the customer buys before a certain deadline or buys in bulk.
• Communicate to employees how they can contribute to repeat business through providing superior service and value.
• Focus their energies on filling the sales funnel. If they run a restaurant, as an owner recently told me, forget about tinkering endlessly with your decor — find ways to attract more customers (get to know what they need and want).
• Ensure that their products and service have the best real and perceived value for their customers.
• Talk to business people from other fields, other industries, to find out what’s working well for them.
A mechanical cheeriness isn’t going to win over sceptical customers. To add value requires a deep understanding of your customers’ needs, customisation and a delivery system that offers quality and perceived value quickly flexibly and competently.
Don’t blow your relationships with your existing customers either — repeat customers, your backlist, have already been paid for by your upfront marketing and advertising acquisition costs.
Co-creating customer value requires listening to customer needs, wants and desires. Creativity and imagination are needed to identify new opportunities for creating customer value. Anticipate customer needs through brainstorming or use of other idea generation methods to produce breakthrough ideas for superior customer value.
Stay focused on creating value.
Founder of ideaaccelerator.co.za
PS Breakthroughs happen when you combine your understanding of your customer’s needs and expectations with creative ideas to solve their problems. Read similar posts on creating value and generating ideas for income and profit in the ideaaccelerator.co.za archive, while they are still freely available.