The Key To Loyal Customers – Products and Services With VALUE!

Stand on Price Alone and You Will Fail

What is value? Simply put; it’s whatever your customers think it is. More specifically; it’s convenience; service; quality; variety; knowledge; after-sale follow-up; and price. Value is the human factor. It’s what you can add to your product or service that will draw customers in and keep them coming back. Let me give you an example of what value isn’t. I recently returned from a flight to discover that my car; which I had left at the airport; had a flat tire. I called a servicing tire dealer and explained that I wanted him to pick up my car; install a new set of tires; and deliver the car to my home no later than 8 a.m. the next day.

After a few seconds of silence; he said; “We don’t do that.”
“You don’t do what?” I asked.
“We don’t pick up cars; and we don’t deliver them;” he said. “Are you a member of Triple A?”
“Yes;” I responded.
“Call Triple A and have them bring us the car;” he said. “Then we’ll call you when it’s finished; and you can pick it up.”

I don’t think this tire dealer understood me. I hadn’t even asked the price of the tires. I wasn’t buying the tires; I was buying the service.
This kind of non-service will drive customers away and into the hands of mass merchandisers from whom; I might add; I can buy tires very similar to those servicing dealers sell.

The man I had dealt with has probably been glaring at full-page tire ads run by mass merchandisers while he is going out of business because he thinks he can’t compete. He doesn’t realize that his business is not “selling tires.” His business is “service” and what he does for the customer while he sells the tires. What makes your products or services worth the difference in price to the consumer? The answer should be value. If you make price stand alone, you will fail- Stress the difference between price and value. It is critical that you define the value of your product or service to the customer and be as specific as possible. What is the value she receives for the money she pays? Do you deliver? Do you provide the freshest merchandise? Do you provide technical assistance by well-trained people?

You can’t beat the price merchant by lowering prices. You can only win by redefining the value you bring to the customer.

Factoid: Value is more important than price.

Tactoids:

1. Convenience: Do whatever you can to make it easy for the customer to do business with you. Take orders by FAX; conduct business at the customer’s location, offer a 24-hour phone service, deliver the product.

2. Quality: Make sure your product or service stands up against the competition.

3. Service: One of the most effective ways to differentiate yourself from your competitors is with responsive service that’s even better than customers expect.

4. Variety: Offer customers a diverse selection of products of services, then let them select those that best suit their needs.

5. Knowledge: The more you know what others need, the more valuable you are. Identify yourself as a specialist. Offer seminars or write a book. Know your products or services better than anyone else.

6. After-sale follow-up: Do something so unique after a customer transaction that it immediately identifies you as a premium value merchant. A grocery store chain assigns names of regular customers to each of its cashiers, who then call to thank them for their business. The Mayo Clinic encourages its physicians to spend at least one hour with each patient during an exit interview to prepare the patient to return home.

 

Thomas Winninger – 612 896 1900 – Thomas@winninger.com – www.winninger.com

Great Products or Great Costumers – How To Segment Your Market!

Business owners are faced with a variety of ways we can “sell the program”, meaning how we can focus on the process of getting our product or service into the hands of our clients, rather than the product or service itself. Concentrating on the benefits and how the product fits to the lifestyle of the user is “selling the program”.

Another way to sell the program is to focus on how our clients purchase. Americans are in love with their credit cards and a simple, hassle-free credit program will go a long way to selling the program at your business. Every day more and more people are stepping onto the information highway and making purchases through the Internet. Is your business up and running on the Web?

Another way value added merchants can sell the program is to provide service after the sale. This ties in perfectly with our focus in this article. Not every customer wants to be treated the same way. The huge amount of discretionary spending available in America today has caused us to get lazy. I see far too many independent business owners respond to this phenomenon by just putting more products on the floor. More products for more customers. Surely this will result in more sales, right? Perhaps for a short time, but in the long run, you will find that strategy will do nothing except sabotage your Maximum Value Perception and keep you from getting full price. What happens when the customers go away? You’ll be left with a lot of great products. I would much rather create a bank of great customers who will continue to come to me season after season, for all their purchase needs not just for products. To do this and to continue to build MVP, it is critical for us to know how to customize the Point of Transaction based on customer demand.

POINT OF TRANSACTION
The Point of Transaction deals with how your customer wants to do business with you. The environment of your business; the actual purchase system; the knowledge and support; and post transaction support are all factors that are perceived quite differently by different clients. You see it all the time on the car lots. Some people want to kick a dozen sets of tires, check under the hood, test the seats and nearly perform surgery before buying a car. Others know what color and style they want – if you have it – it’s a done deal.

CUSTOMER SEGMENTS
This incredibly strong market economy of today means a myriad of more people actually becoming customers. It is critical for the leading business owners to know how to segment their products and services to the different customer categories. Selling the Program in the almost any industry is vastly different than it was as little as five years ago. Not only are there countless more numbers of purchasers, there are countless numbers of more products to purchase. The offerings in the boating industry for example, include cheap small, expensive small, midsize, premium midsize, big and VERY BIG! Pleasure boating, once reserved for the wealthy is now accessible to a much wider array of people.

This rapidly expanding economy of ours can make segmentation quite complex. Adding to the challenge is the fact that the United States will become a non-majority country in which no single ethnic group will compose more than 50 percent of the population in the next 15 years. And within market segments there exists yet more sub- segments. For example, within heads of households, age 35- 50; white males may not be the only category. This group may now include single, college educated females as well. Obviously, all customers are not equal, differing in age, race, income, geographic location and sex. I still find that many businesses still fall short of properly targeting their goods and services to the different categories of customer demands. I find businesses whom spend a lot of time and money on large groups of customers who couldn’t care less about additional benefits in buying from their store, office or dealership. Not being able to discern the difference in these market segments will drain profits and eventually be losers for your bottom line. There are those who will come in your doors looking only for the fastest, sleekest looking boat you can show them. They care little about your Gold Label Service, they just want it BIG and they want it FAST. We must understand as well that there are overlaps in any segment and not everyone will fit exclusively in only one category. The Point of Transaction will not be exactly the same for each customer. My work has taught me that the best strategy for analyzing your customers within market segments and locating your premium customers is to place them into one of three categories: relationship, choice, or transaction. We will look first at recognizing a great relationship customer. In identifying relationship customers you will know the amount of demand and potential loyalty they have for your product and services. These are people who have the highest level of intensity and want service, information, and support after the sale. They will come in to look at a SUV for their family. They will look to your to help them determine which selection best fits their lifestyle. They will want you to have it delivered to their front door. They will want seasonal check-ups and want you to schedule it for them. They will spend more with you in the years to come. They recognize your MVP and are willing to pay full price for it. Relationship customers are premium – keep them the closest to you.

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy. Over 70 major companies in North America depend on him to assist them in maintaining their market dominance. The new millennium has seen the release of his newest book “Full Price!”. He is also the best selling author of “Price Wars” and “Sell Easy”. Contact the Winninger Institute at (612) 896-1900. E-mail: thomas@winninger.com; or visit our website

Don’t Use a Term If You Can’t Define It

I recently walked into an electronics retailer. They really sell a lot more than electronics, but that is their main niche. They are known all over the United States and have been very successful both from a service and a stock value standpoint. They have grown excessively in these past few years. Their international headquarters were actually just completed four blocks from my office. Their name is Best Buy.

Dick Scholtz, the founder of the company, is not only a successful businessman but also a role model to be emulated. He is one who believes that terms without definition are not actionable. In other words, don’t say you give great service if you can’t define what service is. Don’t tell me that you are Best Buy, if you can’t define it. Don’t tell me that you have great value if you can’t define what value means. Don’t tell me you’re a good friend, if can’t define what a good friend is. This involves defining it in terms of my value, not yours. Don’t tell me you’re a great father or partner, if you haven’t defined those either. For truly in the definition is the value you bring.

If your business has a great product and you haven’t defined it in terms of the highest need of your best customer then you are wasting time even talking about growing your business. If you are trying to be everything to everybody, and haven’t defined the differentiating needs of different customers you seek to serve, you won’t be successful.

If Domino’s is in the pizza delivery business, and did not define pizza delivery as within 30 minutes or it’s free, they wouldn’t be the leader in the pizza business today. Can you define your term? Can you make the definition so clear that everyone is attracted to what that means? Don’t use a term without a definition. The definition is the reason that people are attracted to your product, service, or talent. If you are a financial planner and have not defined what that means to the highest need of your best client then it will be very hard for you to be successful. The definition of the term is what makes it applicable, not the actual term.

Thomas Winninger – 612 896 1900 – Thomas@winninger.com – www.winninger.com

Build Customer Relationships!

Don’t Compare Price! Build A Competitive Comparison Grid

The relationship with a customer doesn’t end with the sale. The purchase of an item or use of your service should be the beginning of a long-term relationship with your customer. After the purchase, the relationship must be grounded in not only the quality of the product but also in the strength of your service and response to customer needs. How do you gauge and evaluate your quality of product, service and response beyond the price tag?

The successful business owner will start by building a Competitive Comparison Grid. Evaluate your products and services and compare them with those of your competitors. It is not only what you sell, but also how you sell and supply that counts. Customers may want the latest, top of the line model, but what will bring them back long after the transaction is completed will be your follow through service and response to their needs and wants. A Competitive Comparison Grid can help you internally evaluate what it is that you do best in comparison with your competitors. Use the relationship you build with your customers to define and build your grid. How and on what do we compare? Start by defining what it is you provide as a value merchant vs. a price merchant. Of course value merchants don’t compare price alone, right? We define ourselves not only by the products we offer but by service as well. Value is service! A specialty store client of mine once told me that value is always “one notch above its price point.” Service is whatever your customers think it is and expect of you. Therefore you must know your customers very well and the comparison grid is an excellent means of evaluating how you are meeting and exceeding expectations.

There are numerous ways a business can build a comparison grid.

• Institute a Customer Service Index
Identify the types of service you should be giving and rate each type in terms of the needs of your dealership. Marriott Hotels initiated a similar procedure with its Guest Service Index, a list of specific services that were rated according to the quality of service a guest received. This is invaluable to front-line people because it enables them to focus on customer satisfaction. Ask yourself, “On what do I want my staff to be judged? Are they knowledgeable and responsive? Do they look for opportunities to serve? Do they take pride in their personal appearance and that of the business?” You can formulate the comparison questions to fit your own business.
• Adopt a Customer Satisfaction Verification Program
Value merchants take the time to make a follow-up call to customers to ask if their expectations were met or exceeded by the value and delivery of the product. When staying at a Westin hotel I was contacted by the Guest Relations Director shortly after checking into my room. She was calling to make sure I was satisfied with everything in the room and to check if I needed anything else. Is your staff making follow-up calls to see how satisfactory was the first use of your product? Do they call to see if there are any questions they can answer or give advice?
• Sell Your Strengths To Customers
Don’t create an awareness among consumers that you have a competitor. Rather than competing on price when a customer may press you to compare with a price merchant, you may say, “Our product, with its extended warranty, is guaranteed to operate at peak performance for the time that you own it.” Note that nothing was said about the competitor’s warranty or price, doing so will only encourage comparison with another company and its products and services. Don’t defend price – define value!
• Build a Frequent Shopper Program
When times get tough, don’t lower price just to get the business. Instead, give your customer “equivalency points” to use to purchase other items or to obtain a discount after reaching a certain accumulated amount of purchases. Several clothing stores I know of “award” customers with points to purchase merchandise at regular retail prices at special intervals. Recently I was in San Diego and shopped at a California based grocery chain called Ralph’s. Customers receive a coupon printed on their receipt that is good for points accumulated towards the purchase of certain items in the store at a later date, i.e., baby food, wine, bakery items, etc. Businesses can award “bonus points” to the customer who purchases computer add on items that can be used to purchase other accessory items within a certain time frame.

The challenge for us to avoid is battling with our competitors over price and product alone. We can draw a correlation with what the hotel industry calls the “Amenity Wars.” A Strategic Information Research Corporation (SIRC) study revealed that 73% of travelers who responded said it was not the amenities in a hotel that mattered. It was the service level, the staff’s responsiveness to their needs that was most important. We can only give our customers a product that is equal to or better than our competitors. The rest is up to our team. You can only provide the best item that the industry offers to you. I believe the premium customer knows that and wants something more from you, value-added service.

Stop comparing your business on price and product alone. Use the information you gather with your Market Intelligence System (we defined that in the previous article) and get to know what your customers want and perceive and how your competitors respond to that. Then build your own Competitive Comparison Grid and you’ll understand who is in command to win the war.

Thomas J. Winninger, founder of the Winninger Institute for Marketing Strategy is under contract with 70 major companies in North America to ensure their competitive market dominance. He is the author of Price Wars, Sell Easy, Full Price and the recent BULLSEYE Book 1 Think Smart. Take the BULLSEYE QUIZ at Winninger.com

Stick To Your New Years Resolution Minnesota

Larger Closets Collect More Junk

What can you get rid of this year? All of us, including myself, are so good at making lists of things that we will never do. In making these lists of things that we will never do, we don’t do the things that we need to do. If I gave you a sheet of paper and told you to fill the lines with items of things that you need to do, in the time necessary to fill it out, you would do it. I believe that the whole principle of getting things done requires us to get rid of the things that we will never do. Throw away the list. Or at least put away those things that don’t have immediate value. Get un-cluttered, so to speak.

If you are going to make a New Years Resolution, realize that resolutions create failure. One resolution would be to get un-cluttered this year. It is a natural tendency with all the planning tools that we can acquire, download, or manipulate in our pocket PC’s or pocket planners to make lists of things that just fill in those lines that cry out to be filled in. We clutter our lives with things that have no destination value.

Years ago my dad shared with me that larger closets only collect larger amounts of junk. Let’s get small, simple, and un-cluttered. If you are going to make a list, remember that the creativity that you bring to it is directly related to the number of lines that you are afforded to write on. Don’t use a big sheet of paper, use a small card.

Always think of something that you need to do with an end in site. Don’t just read another book because you said you are reading one book a week. Would it be better to read 52 books a year or to read 12 books that will make a difference in your life? Is it better to meet 365 people a year or to meet 52 people that you want to know the rest of your life? Is it better to tell me how many things you got done this week or how many things you got done that are part of your overall plan for success? Is it important to tell me how many boards you serve on and how many committees you chair than to tell me one project you created that changed the lives of people?

Let’s get un-cluttered. Let’s look at the opportunities of emptying the closet or even getting rid of the closet all together. The key term for me this year is to size-down and quality-enhance. Don’t eat food, eat better food. Don’t read books, read better books. Don’t send cards, give them more value by writing notes inside of them. Don’t just turn on the television, watch a show that has something to do with something important in your life. Don’t take the kids to a movie, pick out a project you can do together. Don’t make lists each week of things that give you a feeling of just getting things done because the frustration will still be there. Pick out the one thing this week that would give you 80% of the satisfaction of all the things that were on your list to get done. Put that one thing on your planning page, or you pocket PC, or your pocket planner.

Thomas J. Winninger, CSP, CPAE, and member of the Speaker Hall of Fame is the president of Winninger Institute for Brand Strategy. Over 70 major companies in North America depend on him to assist them in maintaining their market dominance. The new millennium has seen the release of his newest book “Full Price!”. He is also the best selling author of “Price Wars” and “Sell Easy”. Contact the Winninger Institute at (612) 896-1900. E-mail: thomas@winninger.com; or visit our website!

Business Strategies to Increase Your Company’s Sales!

Creative Programs That Work!

Stop! Put down that pen. Don’t sign off on another new item for your business until you have accomplished a key element to increase sales – meeting customer needs! In the last few articles we have talked about micro marketing and integrating your message through every aspect of your powersports dealership. Both strategies are essential to success yet both rely on a basic building block, that is, knowing your customer needs. The biggest advertising budget in the world is worthless if a owner doesn’t really know his customer and his highest level of need. The successful business today, one who is experiencing the joy of increased sales, is the one who knows the customer, the need and then creates and integrates programs that address that need.

Far too many businesses make the mistake of offering programs that may approach the customer well up front but really do nothing to satisfy the needs and offer solutions. What’s the point of rewarding your customer with a handy dandy seven-function clock radio when her real need is to buy one more pair of jeans for her rapidly growing son? That’s just what a large retail store has done with its program that awards future discounts for customers who purchase frequently in the children’s clothing department. Under the program, customers’ purchases are tracked in a point of sale computer database until their purchase total reaches a certain amount. At that point, the customer is rewarded with a percentage discount on the next purchase. The amount of the discount is proportionate to the level of purchases accumulated. Result? Customers are given incentive to buy and save, instead of receiving yet another radio to find a plug in for! Tracking research has shown that when customer redeemed their savings discounts, they were spending more money in the children’s department than they had spent prior to implementation of the program. Challenge yourself to really meet a customer’s need and reward yourself with increased sales!

DISCOVER THE PRIMARY CONSIDERATIONS

Before implementing any promotion or program however, we need to make sure we can effectively and tangibly meet the need. To do that, we must identify key considerations or the highest level of need. For example, the department store was able to define that people who buy children’s clothing want value pricing, item popularity, brand selection and durability. Are you able to identify the highest levels of need for your CDM (Central Demographic Model) or in other words, the customers who have the greatest need for your products and or services? Typically, customers don’t replace or upgrade a big-ticket item like a speedboat every six months; more likely, a high level of need will exist in the area of service. Do you know what it is your customers need and want in service? Is it free pick up and delivery? Is it on-site service within a certain mile radius? A regular service check every six months or every 2,500 miles for the first year after purchase?

After identifying and studying the CDM for an upscale car manufacturer, I helped him improve his service and increase sales. We implemented the following programs that satisfied customer needs.

• Free maintenance service for twenty-four months built into the sticker price as standard equipment.
• Regular maintenance service at 2,500-mile intervals at the customer’s convenience. The customer called the dealership to request service. A service technician logged the order, arranged to pick up the car at the customer’s home in the evening after work. The vehicle was then serviced and back in the customer’s garage before leaving for work the next morning.

Simple solutions that meet customer needs and increase sales. What customer wouldn’t love to know his vehicle would be serviced while he slept and that it would be back in his driveway before the sun comes up? Can you imagine how sales might increase in the business where a pre-season and post-season check up were provided as a bonus with the purchase of a mountain bike? AND. . . you picked up and delivered their bike after service! Consider offering a future purchase savings bonus for customer referrals. For example, if one of your customers refers another customer to you and a sale is completed, your original customer receives a special thank you card in the mail rewarding him with bonus points towards the purchase of accessory items. Remember, when it comes to customer satisfaction the key is not to just meet the need, rather to exceed expectations!

MAKE IT TANGIBLE!
It doesn’t matter what business you may be in, the target is to narrow down your CDM, identify the highest levels of need and then meet and exceed the need. Just make sure the program you use to accomplish that can be seen in the minds of your customers and then be tangible. A freebie mini-clock radio just doesn’t fit the bill. I know of a couple whom recently purchased a family mini-van at an upscale dealership. Not able to purchase a brand new vehicle at the time, they opted for a pre-owned model. Their greatest level of need was not a new van, but for a more moderately priced one with the assurance that repair costs would be minimal. The dealership offers a warranty program that guarantees for the first six months of ownership, they pay 50% of any service and repairs. As a result, the couple ended up buying another vehicle at the same time! Meet the need – increase sales!

You can find more of Winninger’s business strategies in his dealer-focused books: Price Wars ($24.95) and Hiring Smart ($15). You can contact the Winninger Institute at (800) 899-8971; e-mail at twinninger@aol.com; website at www.winninger.com.