COVER CONTINUED ... If I were to ask a business owner right now, “Why do your customers choose you?”, most people give me the same answer: “They choose us because we are the best.” Look at the taglines or advertising of many companies. They claim to be the best and smartest, typically with some note in the ad about the amount of experience they have. They talk about how great their service is. “We have the No. 1 dentist in the valley.” “We’ve settled $1 billion in claims for our clients.” What does the customer think when they hear this? They think, “B.S.” It’s not like you’re going to put in your ad that you’re only average. Can you imagine the ad if they did? Just graduated legal school, need experience. If you’re looking to give a young and hungry lawyer a shot, so I can do a little on-the-job training with your case and possibly even life, call today. I’m half the price of the big guys, which means if I win, you save big. All prices negotiable. Call now. 208-555-1212. “If you want to go against any competitor, big or small, IT FIRST STARTS BY BUILDING A RELATIONSHIP to make the customer immune to offers from others.” Even that guy isn’t going to run that ad. So, no one believes you when you say you’re the best. The consumer’s disbelief of advertising is one reason for the rise of online reviews. The theory is, “Even a stranger is more likely to tell me the truth than the business is.” That is probably true, but there have been many news stories about fake reviews, which has hurt their credibility to some extent. HOW DO YOU WIN IN TODAY’S ECONOMY? Nearly every business is in the commodity business. How do you keep from having to play the price war? The good news is, the answer is simple. The bad news is, like everything else, it takes work and effort. But that is also good news, because anything that takes work and effort is unlikely to be quickly or easily copied.
INVESTMENT: All relationships need investment. Almost no small business has a budget to invest in people who are already customers. Once they have your cash, it is almost like businesses forget you exist because they are so busy trying to find the next new customer. This is insanity. We are all great communicators when we want money from our customers. Growth only happens when you have new customers and retention. No business can survive on new customers alone and grow for any period of time. Let’s look at a dating example, which is by far my favorite way to think of new customer relationships — because of the parallels between the two. If you went out on a date three times and ended up making a sale at the end of the third date, and after the date was over, didn’t call again for six months, what are the odds you get another date? The odds in that situation, 99 percent of the time, are zero. So, why do we operate that way in business? We treat our customers as second-class citizens, only calling or writing when we want something. No wonder they aren’t loyal to us. I recently had a dentist tell me they felt they were spending too much on customer retention. But when I did the math of what the newsletter cost per patient, it came out to $7.08 per patient per year. That’s too much money? They spend 35 times that amount to get a new patient in the front door. And that doesn’t even tell the whole story, because, as we know, not every new customer who walks in the front door
Let’s break each section down.
RELATIONSHIP: If you want to go against any competitor, big or small, it first starts by building a relationship to make the customer immune to offers from others. You don’t want customers to shop around, ever. There is only one way to keep them from doing so: relationships. Some people will argue that they can keep a customer from shopping simply by being the low-price leader. That is just not the case, though, because the low-price leader position isn’t defendable. I could undercut your prices right now if I wanted to. A business like Amazon can decide to sell your services below cost to gain market share. ENTERTAINMENT: To get people to consume your message, you need to be entertaining. We live in a world where the next exciting and interesting thing is only a click away. Being entertaining so people want to consume your content is an important step to building a relationship, which will get you maximum profit. EXPERIENCE: Do you want people to talk about you? If so, you have to give them a reason to talk. No longer is it good enough to be good at what you do to get a referral. You have to give people a reason to talk and even a reward for doing so. This can come in the forms of gifts and contests, or by creating an experience for them to share on Facebook, like inviting them out and asking them to bring some friends.
To defeat being a commodity, you need to remember one simple formula: R + E + E + I = More Profit.
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