Archive for the ‘Customers’ Category

Making Change Simple

Friday, May 21st, 2010

Keeping your small business marketing approach current with your customers

You know that the marketplace changes rapidly, and you have to change your business model with it. But how do you know which changes to make? It’s simple. Ask your customers.

In this small business marketing podcast, I discuss changing business strategy with David Weatherholt and Russell Ball. Russell successfully changed his marketing approach- and company name- to fit the needs of his marketplace. I detail how all small businesses can keep their fingers to the pulse of the marketplace by conducting simple, thorough research with their customers.

Listen or download below:

Small Business Marketing Research

Download the small business marketing research MP3 file here. (12.8MB)

The Communication Trifecta

Friday, April 23rd, 2010

Content, timing, media – this sums up the marketing communications trifecta. And they all have one goal: communicate with your customers in ways that are meaningful to them.

If you don’t communicate with customers in ways that are meaningful to them, your messages will be ignored (or, even worse, your customers will become angry with you). Don’t waste your marketing budget on direct mail pieces that will be thrown in the trash or email messages that will be marked as spam. Here are some things to consider as you design your communications with customers.

Talk like a customer.
The most important element is the content of your message. Communication is for your customers, not for you, and the content should be designed for the customer. Sometimes, companies fall into the trap of creating communications for themselves, instead of for their customers. In their latest ads for Windows 7, Microsoft developed a hilarious message… by poking fun at their customers. Watch as the customer in this ad enters a dream world, imagining an impossibly idealized version of herself:
How is this ad supposed to be meaningful for Microsoft’s customers? Microsoft made the mistake of designing an ad they found funny, without considering what their customers might think.
At least Microsoft didn’t fall into the trap of many technology companies by listing all their new technical features. You’ll notice they didn’t even mention the technology. That’s because almost no customer cares about technological details. They care about having a computer that is easy to use, and Microsoft knows that.
It’s 3AM. Do you know where your marketing communications are?
Beyond the content of your messages, you must consider the timing of your communications. Telemarketers are infamous for calling people as they sit down to dinner. Telemarketers are also known for their low success rates – The Direct Marketing Association reports that the response rate for outbound telemarketing is between 2.9 – 4.4% (they also report this rate is the best for all direct marketing methods – yikes!). Consider when your customers would like to hear from you. For example, if you are emailing a B2B newsletter, don’t send it out Monday afternoon. It’s likely your customers are already busy and won’t have time to read it.
So many choices.
Completing our trifecta of communication is the medium you choose. There are more media than ever from which to pick: magazines, direct mail, newspapers, pay-per-click advertising, social media, local events, radio and many other choices. Fortunately, choosing a medium is not as difficult as it might seem. The only media that matters to you are the ones that matter to your customers. An assisted living facility might advertise in a well-respected local newspaper, because that’s what their customers trust. An organic bakery, on the other hand, might not do any traditional advertising at all, if they determine they can best reach their customers at the local farmers’ market or on Facebook. One media tip: the more local your business is, the more local the communication should be.
Communication is more than just advertising.
Traditional marketing communications like we’ve been discussing are the flashiest and most obvious element of communicating with your customers, but, really, communications include every time you talk to your customers and every time they try to talk with you. While a large part of communication is advertising, you need to evaluate every point of communication with your customers.
Some of the non-advertising communications you should evaluate include your billing documents, receipts, the experience of calling your business on the phone, handling a customer service issue or walking into your store. The strength of the small business is that you can give thought to every experience your customers have with you and your company. Making beneficial changes to non-advertising communications with your customers is usually inexpensive and can make a big difference to the bottom line.
New isn’t always better.
I know many small businesses feel the need to try out new and various ways of advertising, and they spend a lot of money trying to find “what works.” But you don’t have to guess, and you don’t need to listen to high-pressure sales pitches. You can evaluate every new advertising opportunity with the question, “Will this be meaningful to my customers?” By making all communications customers have with you meaningful, you will be able to stretch your marketing budget further and with more success.

Talk like a customer.

The most important element is the content of your message. Communication is for your customers, not for you, and the content should be designed for the customer. Sometimes, companies fall into the trap of creating communications for themselves, instead of for their customers. You can see an example of this in my post, “Microsoft, why do you insult your customers?

At least Microsoft didn’t fall into the same trap as many other technology companies by listing all their new technical features. You’ll notice they didn’t even mention the technology. That’s because almost no customer cares about technological details. They care about having a computer that is easy to use, and Microsoft knows that.

It’s 3AM. Do you know where your marketing communications are?

Beyond the content of your messages, you must consider the timing of your communications. Telemarketers are infamous for calling people as they sit down to dinner. Telemarketers are also known for their low success rates – The Direct Marketing Association reports that the response rate for outbound telemarketing is between 2.9 – 4.4% (they also report this rate is the best for all direct marketing methods – yikes!). Consider when your customers would like to hear from you. For example, if you are emailing a B2B newsletter, don’t send it out Monday afternoon. It’s likely your customers are already busy and won’t have time to read it.

So many choices.

Completing our trifecta of communication is the medium you choose. There are more media than ever from which to pick: magazines, direct mail, newspapers, pay-per-click advertising, social media, local events, radio and many other choices. Fortunately, choosing a medium is not as difficult as it might seem. The only media that matters to you are the ones that matter to your customers. An assisted living facility might advertise in a well-respected local newspaper, because that’s what their customers trust. An organic bakery, on the other hand, might not do any traditional advertising at all, if they determine they can best reach their customers at the local farmers’ market or on Facebook. One media tip: the more local your business is, the more local the communication should be.

Communication is more than just advertising.

Traditional marketing communications like we’ve been discussing are the flashiest and most obvious element of communicating with your customers, but, really, communications include every time you talk to your customers and every time they try to talk with you. While a large part of communication is advertising, you need to evaluate every point of communication with your customers.

Some of the non-advertising communications you should evaluate include your billing documents, receipts, the experience of calling your business on the phone, handling a customer service issue or walking into your store. The strength of the small business is that you can give thought to every experience your customers have with you and your company. Making beneficial changes to non-advertising communications with your customers is usually inexpensive and can make a big difference to the bottom line.

New isn’t always better.

I know many small businesses feel the need to try out new and various ways of advertising, and they spend a lot of money trying to find “what works.” But you don’t have to guess, and you don’t need to listen to high-pressure sales pitches. You can evaluate every new advertising opportunity with the question, “Will this be meaningful to my customers?” By making all communications customers have with you meaningful, you will be able to stretch your marketing budget further and with more success.

Microsoft, why do you insult your customers?

Friday, April 16th, 2010

Although Microsoft is a popular punching bag, I actually think they create many good products. Bing is a beautiful search engine; Microsoft Office is indispensable. But they can’t advertise. They just don’t have the knack for it.

In their latest set of commercials, they very subtly insult their own customers. Observe as Crystal imagines herself to be a sparkling beauty queen:

Microsoft’s intended message: Windows 7 is so easy to use that everyone can appreciate it.

Microsoft’s actual message: Silly customers! You live in a fantasy world of glittery eyes and self-importance!

The secret to humor in advertising is that the customer should not be the butt of the joke. Modern customers have high opinions of themselves and their abilities. Mocking them will never influence them to buy your products.

I’m a Mac person myself, but I hear from developers that Windows 7 really is easier to use than past versions. Many people will probably upgrade due to this word of mouth. It’s a shame that Microsoft’s own advertising can’t complement this effort.

Small Business Marketing Spotlight: LMB Associates

Friday, March 26th, 2010

In the marketing spotlight this week, we have Lorena Blonsky, owner of LMB Associates, a firm specializing in recruitment of information technology professionals.

She has owned the business for the last 20 years and recruits mostly in Chicago and the Midwest. Lorena started off our interview by telling me, “I love being a small business owner because of the flexibility it allows in my schedule and because I love what I do. I’m able to control the quality of the work that gets done. I am committed to quality work; I have a commitment to my clients, and they really appreciate and value that.”

(Some recruitment definitions for my readers: Clients are the companies LMB Associates represents, while Candidates are those seeking jobs with LMB Associates’ clients.)

Since LMB Associates is in its twenty-first year, I wanted to know what factors Lorena credits for her success. She was able to give a very forceful answer:

Determination to succeed is critical and most important. There never was a question that I would succeed. Sometimes other people just give up.  When I first started, someone told me that I would make a lot of money and make it very quickly. In actuality, it took me eight months to make my first dime, and it wasn’t so easy. To people on the outside, they only see the end success. But there is a lot of work that goes into creating something and making it successful.”

Lorena emphasizes that hard work and determination are crucial for any aspiring entrepreneurs:

“It’s a very important thing to know and understand before you start your own business that it is going to be challenging. I’m glad I went through this experience, although I wasn’t glad at the beginning, while I was going through the pains of starting up. The truth is the start-up time gives you an accurate, honest assessment of what you’re in for, and I think that’s very important.”

Lorena’s hard work continues, as the economic downturn has become the biggest challenge for LMB Associates. Lorena says, “It’s been a shrinking job market, and my business is very dependent on economic circumstances.” She adds that the economy has had other, indirect, influences on her business: “There’s been a lot of volatility in the market, such as clients downsizing, consolidating offices or moving technology responsibilities offshore. Understanding these market changes present challenges but can also present opportunity.”

There is another looming challenge for the recruitment industry:  the Internet. Lorena isn’t worried about the challenge from Monster or HotJobs in the long run, because recruitment web sites aren’t necessarily saving companies time or money.  Recruitment web sites offer a high volume of resumes, but they provide no quality control. She says, “Companies need more capable, human resources to put toward screening candidates when they choose that option. I offer more than bodies to fill a room or paper in the form of dozens of resumes. I work with each client organization to find the best match for their needs.”

Many companies find that using recruitment web sites can tarnish their reputations among job seekers, if they do not follow up with candidates. Lorena explains,

“Candidates often don’t get responses from the companies to whom they send their resumes.  Companies should send a letter of thanks to a candidate who has sent his or her resume. It makes the companies look bad when they don’t respond. The way a person or organization treats people is very, very important. If you treat people poorly, they won’t want to work with you and that reputation will get into the marketplace.  And if you treat people with respect, they never forget it.”

Treating people respectfully is key to LMB Associates’ business. Lorena’s marketing strategy is to treat people as individuals, learn about their needs and develop relationships with them. She says,

“Often recruiters are just looking for the next buck. I differentiate myself by treating people as people. I give people the respect they deserve. Candidates might not know how to write a résumé, so I give them my time, sample resumes, suggestions and support. Candidates can become demoralized while searching for a job. I pump people up to feel good about themselves, because they need to know that, even though the market may be tough, they bring value to the marketplace. It’s a big deal to give people a boost so that they can get out there and do what they have to do: find a new job.”

She uses a similar strategy for her client organizations:

“I listen to what my clients say they need, then I ask questions, based on the qualifications they seek, their insight and feedback. My clients have personnel issues that need to be addressed, certainly that they need to hire someone but also often beyond the job description. What my clients need from me is to maintain confidentiality, to understand their needs and to assess what types of candidates will fit into their organizations.”

From listening to Lorena, it is evident that she loves what she does:  working with her clients and candidates. Before concluding the interview Lorena added,

“I like working in technology because it’s always changing and mind-expanding, and I like working with technology people, who are on the cutting edge of that change. I like having clients in a variety of industries; it makes work more interesting. I love working with candidates, who are all different kinds of people from all cultures, socioeconomic backgrounds, religions, and environments.”

To learn more about LMB Associates, view current job openings or contact Lorena, visit LMB Associates.

Small Business Marketing for Retailers

Friday, December 11th, 2009

On “Getting Down to Business” with David Weatherholt, we talked about the holiday shopping season and what it means for retailers.

Black Friday has come and gone, and with it, many retailers hopes of enjoying a profitable November. In this podcast, I explain the history of Black Friday and Cyber Monday. This year’s performance was worse than last year’s already abysmal showing– consumers spent almost 8% less per person this year than last, resulting in an overall revenue increase of just 0.7%. Black Friday this year showed that we need to revolutionize our concept of how retailing works– for both large and small businesses. Consumers have changed the way they shop. To learn more, listen below:

Download the small business marketing for retailers MP3 file here. (13.38MB)

Relationship Marketing Podcast

Monday, December 7th, 2009

I used my segment on “Getting Down to Business” to further explore the topic of relationship marketing. In this eight-minute segment, I explain how developing relationships with your customers can lead to higher profitability, increased loyalty and more referrals.

Download the relationship marketing MP3 file here. (13.38MB)

Relationship Marketing

Friday, December 4th, 2009

How relationships can turn your customers into your best friends (or worst enemies).

You’ve probably heard about relationship marketing. Maybe you’ve even taken some steps to create more customer loyalty by being more “friendly” with your customers. Indeed, developing customer relationships can be a great way to grow your business and profits. Steve Yastrow wrote a book about the topic, We: The Ideal Customer Relationship.

We: The Ideal Customer Relationship by Steve YastrowIn Yastrow’s first chapter, he provides compelling evidence for developing customer relationships, stating: “Relationships have become powerful differentiators. Customers can’t tell if your product is better than your competitor’s product, but they can tell if they have a better relationship with you than with your competitor.”

Even better, the profit potential for developing relationships with your customers is high. In Yastrow’s research, he found that 89% of people prefer to buy from a business they have a relationship with; 86% would prefer to buy from a business that they have regular conversations with, and 90% prefer to buy from a business that talks with them about future decisions they might make. Here’s the real revelation, though: 79% of people are more likely to buy from a business they have a relationship with rather than the business with the best prices. Similarly, 86% would be more likely to refer a business they have a relationship with than to refer a business with the best prices.

“Wow!” you say, “Sounds amazing, but what’s the catch?” It turns out developing good relationships with your customers isn’t easy (but it’s still worthwhile).

Predictably Irrational by Dan ArielyThe reason customer relationships are hard is explained in Dan Ariely’s bookPredictably Irrational. In chapter 4, “The Cost of Social Norms,” he explains that we live in two different worlds: one governed by social norms, and one governed by market norms. Ariely writes:

“Social norms are wrapped up in our social nature and our need for community. They are usually warm and fuzzy. Instant paybacks are not required: you may help move your neighbor’s couch, but this doesn’t mean he has to come right over and move yours.”

There’s nothing “warm and fuzzy” about the world ruled by market norms, however:

“The exchanges are sharp-edged: wages, prices, rents, interest and cost-and-benefits….When you are in the domain of market norms, you get what you pay for—that’s just the way it is.”

What happens when we develop customer relationships, and those worlds collide?

Ariely reports on an experiment in a day care center that tested the interchangeability of social norms and market norms. Parents usually viewed their relationship with the day care center as social, but when there arose a problem of parents picking up their children late, the center imposed a fine on latecomers (thereby introducing a market rule).  The instance of late parents actually increased, because parents now felt they were paying to be late and no longer felt any social obligation to arrive on time.

When the day care center reversed the fine, Ariely saw that something interesting happened. Even more parents started picking up their children late. Because introducing the market norm violated the social norm, parents no longer felt a social connection with the center. When the fine was removed, both motivators—guilt and the fine—vanished, so there was no compelling reason to arrive on time. Ariely sums this up by asserting, “When a social norm collides with a market norm, the social norm goes away for a long time. Social relationships are not easy to reestablish.

How does this relate to business? Let me tell you a story about a normally reasonable person who got caught in the crosshairs of social norms vs. market norms, resulting in slightly deranged behavior. (Okay, I’ll admit it. I am that person.)

Picture of a puffin I took on an inferior cruise.Two years ago, my husband and I were planning a trip to Maine. We chose to vacation there primarily because Maine is full of natural beauty and wildlife, specifically puffins. I had heard you could take a puffin-watching cruise, and I was enamored at once. We sorted through all the puffin-watching websites to choose the best-sounding one: it took you right to the main puffin island, where you would disembark and likely be only four feet away from the puffins. The website even had a charming story about the boat, company and captain. All of the warm, fuzzy feelings and my active imagination had put me solidly into relationship, social-norm territory with this company. And I hadn’t even called them yet.

When I did call them, I had to leave multiple messages on their voicemail. Each message assured me someone would take my reservation, so I wasn’t too upset. I felt like I was already their friend, so what’s a few missed calls between friends?

Finally, someone answered my call. She was rude, abrasive and crushed my hopes of seeing puffins up close and personal: The boat was full. They don’t keep waiting lists. Then, she hung up on me.

After I got over my grief, I became furious. I signed up for a yelp.com account and wrote a scathing review. To give my review clout, I even reviewed animal-related attractions I had been to in other cities. How dare they promise to show me puffins then take it all away? I seethed over this betrayal for weeks (just ask my unfortunate husband).

To me, our relationship was based on social norms. To the puffin-watching company, we didn’t have a relationship. I was just a person they forgot to call back…for months. They thought they made a simple customer service mistake that didn’t affect their business. After all, they filled up the boat, right? Maybe, but my yelp.com review remains immortal.

Referring again to Steve Yastrow’s book, We, he advocates creating special kinds of relationships that he calls We Relationships. It involves learning about your customer and using the information you glean to develop a relationship that feels unique, fresh and equally valuable to both customer and company. To learn more about creating these relationships, I recommend you read his book.

Developing relationships with your customers is the surest route to earning their loyalty, continued business and enthusiastic referrals. However, unless you tend the relationship with care, you risk creating a jilted customer. And we all know the adage: Hell hath no fury like a customer scorned.

Spooky Thought: Your Customers Aren’t Rational

Friday, October 30th, 2009

Every day, you make business decisions based on analysis, research and rational thought. On this day before Halloween, what if I told you a scary thing? Your customers aren’t rational. They don’t make decisions based on rational thought and logic, even when they say they do. Which means all of your careful, rational planning doesn’t necessarily influence your customers to buy more, refer more or rave more.


This article isn’t a horror story, though. There’s good news. According to author Dan Ariely, your customers (and everyone else, too) are Predictably Irrational. In his 2008 book, Ariely explores the field of behavioral economics, what motivates us, what influences our decisions and how this fits into our marketplace and world.

In the very first chapter, Ariely provides real, solid business advice that you can start using today. I’ll give you a teaser: You can increase sales of your high-margin products by offering a similar product that is clearly a worse choice. Ariely’s research shows that people are compelled to compare and prefer to compare similar choices.

For example, let’s say you are picking out a family dog, and you want a King Charles Cavalier Spaniel. You don’t know if you want a boy or girl, though. There are three puppies to choose from, two male and one female. One of the males and the female are friendly with your kids, healthy and romp around playfully. The other male growls and has a runny nose. Probability says you’ll choose the healthy, friendly male puppy. Ariely posits this choice is because it’s easier to compare two male dogs than a male dog and a female dog. Since the healthy, friendly male puppy is clearly better for your family than the grumpy, sick male puppy, the first male puppy starts to look like the overall superior choice. (Don’t worry. No puppies were harmed in the making of this example. The sick puppy went to the vet and is all better now.)

For the full research behind the tip and to gain an interesting, entertaining and better understanding of how economics works and affects your life, go buy–and read!– Predictably Irrational. Your business will thank you.

Existing Customers Create New Customers

Friday, October 23rd, 2009

Companies spend a disproportionate amount of money on trying to acquire new customers. Let’s say a company wants to find just ten new customers. How much could they expect to spend?

The cost to gain 10 new customers via TV, Pay Per Click or Direct Mail

Let’s hope that company is selling something that has a margin of more than $80, or they won’t see any profit. If only they knew that keeping existing customers happy naturally creates new customers. And it costs very little.

More often, companies treat existing customers like chopped liver. They forget about—or worse, punish– someone as soon as he buys something from them.

If you are a satellite television customer, the cable company will be glad to give you three months of free cable to become their new customer. If you are an existing cable customer, you know to expect the onerous contracts with rate raises and dread calling the dismal customer service when your signal goes out.

Companies focus on acquiring new customers at the expense of maintaining existing customers for mainly two reasons:

  1. That’s what they’ve always done. When a product or company is brand new, there are no existing customers. All marketing efforts have to be focused on gaining new customers. This marketing inertia carries through well after a company has become established.
  2. Those evil competitors! We must act now to steal market share away from them! What companies don’t think about is that it costs more to steal a customer from a competitor than to keep an existing customer.

An existing customer who is loyal to your company will buy more products more often and will rave about you to their friends. We all nod appreciatively when we are told that word-of-mouth and referrals are the most powerful motivators to encourage customers to try a new product, but then we go on with our e-mail blasts and Val-Pak coupons. Instead, we should be creating that word-of-mouth by inspiring our existing customers to rave about us!

But how do you create raving customers? Anticipate what would delight them. Then, deliver it! Netflix recently sent me an email that because of their increased operational efficiencies, they would be lowering my monthly subscription fee. Oh, and by the way, now I can watch thousands more movies instantly, and they created a movie player that works on my Mac. All without me having to ask. I’m delighted! I’m loyal! And here I am telling you about Netflix.

But what if you don’t know what would delight your customers? Ask them. A part of my consulting work is finding out what a company’s favorite customers love about them and to help them do that for every customer.

Remember, if we have existing customers, that means prospective customers don’t even exist yet. Companies should only spend a proportionate amount of their marketing budget on customers who don’t exist yet. Don’t invest yourself too heavily in imaginary friends.

Instead, we should focus a higher proportion of our efforts on relationships with existing customers. If we delight them, they will reward us by buying more from us with higher frequency. And, as a benefit, they will create our new customers for us.