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

Customer Satisfaction; Building Customer Relationships and Loyalty

“The creation of value is not about increasing your customer’s satisfaction. It is about taking responsibility for your customer’s results.” – Thom Winninger

Customer satisfaction? Isn’t that what we all strive for, what we drive ourselves for each day? The business owner whose has the most satisfied customers wins, right?

For years, conventional wisdom has said that a satisfied customer is a loyal customer. The world is full of information and experts that instruct businesses on how to build customer loyalty. Concepts like “customer focus” and “customer satisfaction” are warmly embraced. Businesses have “products” and “services” to sell and we sell these things to customers. Who wouldn’t want to focus on satisfying customers? Who wouldn’t want to build a base of loyal customers who come to us for all their needs? Yet we still find that customer satisfaction is a fleeting thing, captured one day by the best price, the next day by how well a complaint may be handled.

However, satisfaction and focus simply aren’t enough. A leader in today’s market must learn new words like intimacy, interaction, loyalty, and perhaps most important, strategic alliance. Strategic alliance is a single-thread relationship. It is being one with our customer. This type of relationship is very interactive with the customer. Strategic alliance is not just a fancy re-wording of conventional terms. It is not a make over of the same old tired concepts of “sales and service.” A strategic alliance with a client is built on a mutually agreed-to plan that reflects the nature and needs of the parties involved. It will involve a true paradigm shift away from satisfaction and toward loyalty.

PROCESS NOT PRODUCT
The industry leaders of today focus on the program, process or system that surrounds their product or service – not the product or service itself. An industry leader sells a program that helps customers make money or makes their life easier or more enjoyable. Rather than just selling a product or service, they wrap the process around it, thereby anchoring the value to the product and inevitably, achieve full price!

Almost every product sold, whether it is hard goods like cars, boats houses or soft goods like movies, or vacation packages, is intimately tied to several aspects of a process, including production, conversion, technology, logistics and distribution. By the same token, every customer goes through a buying process. The more a business owner learns about that buying process, the more we can help our customer by customizing programs and systems to assist the customers themselves become part of the buying process. The more we can truly help our customers, not just satisfy them, the stronger our relationship with them becomes. Satisfaction has been confused with acceptance of substandard levels of service and product performance. Customers are not really satisfied; they have just learned to deal with it. They have learned to accept the standard opening question of “Can I help you?” They have learned to accept, “Sorry, that’s not my area,” or “We can’t do that.” A business owner who develops a strategic alliance with customers will help them become a part of finding their own definition of satisfaction and the relationship will be greatly strengthened. The end result is a product or service that becomes so critical to customers that they are willing to base all their future purchases on it. The pressure is off price and focus is on the process.

A key to building this invaluable dynamic with our customers is centered on the selling of the program, process or system by which our product is most intricately linked. Take a look at the success of thematic dining. The Rainforest Café or the Hardrock Café offers food that is not particularly any better than other dining establishments yet they offer entertainment wrapped around the product and the service. Rather than a family going out to eat, they attend an “event” and enter into an “environment.” Bu focusing on the program surrounding the food, rather than the food itself, these eateries are able to create more value and therefore can charge much higher prices for the same food.

FOCUS ON WHAT IT DOES – NOT WHAT IT IS
Business leaders can successfully sell the program in three ways. The first method is to focus on what the product or service we offer does, not merely what it is. Concentrate on the benefits of the product instead of simply the product itself. A customer may come in to a dealership looking for an All Terrain Vehicle. Of course he knows what an ATV is, but does he really know or understand what that piece of equipment can do? Does he know it may decrease field time while delivering safe and stabile assistance with difficult chores? Does our personal watercraft client understand that the jet ski she is considering can not only provide hours of fun and enjoyment but also serve as an economical and efficient means of transport? These days it is not at all uncommon to see a large cabin cruiser parked in a quiet bay on a large body of water, with the family jet ski tied along side, ready to make the quick trip to the marina for more supplies? The idea of selling the benefits instead of the product is proactive in nature. It allows us to draw the client in, finding out what his or her need is, and then applying the features and benefits of the product to it. The concept is to tie the product to the lifestyle needs of the user. The client then reveals to us “why” he or she needs our product or service and we can then build the process around the need.

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.