Yesterday, an acquaintance asked me for advice on his startup company’s marketing. He just didn’t know how to get started with his first customer. He wanted to know what kinds of brochures, business card or website he needed to get people interested.

I told him, “Decide who you want your customers to be.”

He replied, “Oh, you mean middle class or upper class?”

“No, I mean decide which specific people in which neighborhoods should be your customers. Get to know them, how they talk and what their needs are. Then you can start selling. Then you will know what should be on your website.”

When people first start looking for customers, their instinct is to look for large groups of people and hope to convince a few of those people to hire them. The idea is, “If I aim for all middle class families, surely I’ll get a couple of customers.” But this instinct is wrong. The more people with whom you try to communicate, the less each one will pay attention to you. For example, I imagine you rarely pay attention to the loudspeaker at the grocery store. It’s just not that meaningful to you because the grocery store is trying to communicate a general message to the entire store. When you try to be meaningful to everyone, you end up being meaningful to no one. Generalization for the masses is the worst way to sell a new (or any) product.

To find its first customer, a startup needs to get specific. Instead of selling to groups differentiated by demographics, sell to individual people. Talk their language and address their needs.

On a related note, marketing expert Steve Yastrow wrote two very helpful newsletters on how to differentiate your customers as individuals instead of groups– Do Differentiation Differently and How to Do Differentiation Differently. Steve’s essential message is:

“Your customer doesn’t really care if you are different. But he will be blown away if he sees that you think he is different.”

Showing your customer you think he is different is more work than blanketing a city with flyers- but it will also yield more results. As counterintuitive as it may seem, startups (and all companies) will find more customers if they focus on fewer people.

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Why is personality a great small business marketing tool? By showing your personality, you give customers something to be loyal to. Loyalty can’t be bestowed on products or services, but people are loyal to other people and organizations. Loyal customers will buy more from you and rave more to their friends. You just need to show them some personality.

What have you done lately to infuse the best parts of your personality into your small business?

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Joseph DePinto, CEO of 7-Eleven, wanted to discover the secret of their most successful stores. He said of one location,

“It’s the epicenter of coffee for 7-Eleven. This store sells more than 2,500 cups of coffee every day. I need to figure out what makes their coffee business so great, so I can roll it out to our other stores.”

He finds out that in this store with the highest volume of coffee sales, it’s all about the relationship, not the product.  Watch the clip below:

After working with Delores, who greets most customers by name, Joseph DePinto realizes,

“That’s why we’re selling 2,500 cups of coffee. Not because we have great coffee but because we have Delores there.”

In a more unusual situation, Waste Management president Larry O’Donnell learns the local trash collector is the literal face of his company to customers. After watching trash collector Janice greet and hug customers, he began to see her job as building relationships with their customers, in addition to collecting the trash. He made plans to change Waste Management’s approach to productivity measurement.

The specific segment isn’t available, but the full episode is here: Undercover Boss – Waste Management (The segment starts at 30:00).

These corporate leaders got the opportunity to see what their customers and employees experience first-hand. They witnessed the value of customer relationships. But you don’t have to go undercover to build relationships with your customers- you just have to start doing it.

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Meaning of Love – Larger version

If you click through to the larger version, you can see that following synonyms of a word can lead to some surprising definitions. In business and marketing, it is especially important to know exactly what words mean to your audience. Using the perfect words can help us communicate more perfectly.

For example, I was purchasing a gift card last night and was disappointed to see that the gift cards came in specific dollar amounts. I asked the salesperson, “Do you offer gift cards in variable denominations?” I realized I had chosen the wrong words when my question was answered with a blank stare. Trying again, I asked, “Can I get a gift card with any amount I want on it?” “Oh sure,” he replied. There are many ways to say any one thing. The goal of good communication is to find the words best suited to the person hearing or reading them.

What are some ways you could improve communication with your customers? Here are some thought starters:

• Most businesses use jargon and acronyms. When you use them with your customers, do they understand what you mean?
• Email and text messaging are notoriously bad at conveying inflection and context. Do the messages you send carry a double meaning if read differently?
• The best way for your customers to understand you is if you talk like they do. Do you listen for their terms and phrases? Do you use them in communication?
• How often do you listen to your customers? Do you make an effort to understand them?

If you talk to your customers in ways that are meaningful to them, your message will be more successful. Get to know different types of customers, the ways they describe your business, what they expect from the relationship with you and what words that they use. Successful communication will lead to success with your business goals.

(In future articles, I’ll delve into how to develop business goals for your small business. Marketing starts with knowing what results you want.)

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At the peril of using negatives, I want to give small businesses advice on how not to treat their customers. In the following examples, imagine how your customers would respond if you tried these bad tactics.

Don’t offer customers a make-believe loyalty program.

Any customer can tell that buying six smoothies in a month in exchange for a free one is not a good deal. If you insult their intelligence, customer disloyalty will skyrocket.

Don’t try to trick customers with sneaky advertising.

A company named Sneaky Advertising tried to post a spam comment on my blog. I visited their site, and took the screenshot shown below.. There’s no such thing as stealthy profits, because no one is fooled by those haphazard advertisements. If you trick customers into viewing your advertisements, two things can happen: they ignore it, or they get angry about it. If your customer gets angry at your advertisement, that means they are really angry at you. Only advertise to your customers in ways they find acceptable.

Don’t act like a large company when you’re not.

Small businesses can offer customers things that large companies cannot. Use your size to your advantage– don’t try to hide it. Large companies have many faults that small businesses must avoid such as unnecessary bureaucracy, unwieldy communication and treating customers like a number.

Don’t talk negatively.

Remember the pink polar bear example earlier in this article? Speaking in negatives is not an effective way to communicate your message. Focus more on your strengths than your competitors’ weaknesses or jabs. Just try to read the following excerpt from DirecTV’s website without focusing on, “NO!” and “ONLY!”

All of these points have something in common and can be summarized in one statement:

Don’t treat your customers like they are stupid.

Your customers are smarter than ever, have access to more information than they did a year ago and grow more discerning with every sales pitch they hear. Most importantly: they can tell if you are trying to trick them.

Use your marketing budget to treat your customers as the intelligent, discerning people they are. If you do, you will have the opportunity to grow loyalty, sales and referrals.

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Laura starts by telling us what she enjoys about owning her own business:

I love the freedom I get from owning a business.  I have full creative control over all my work, so I’m free to try new techniques and experiment with new ideas.  I’m also able to work at my own pace, set my own hours, and choose my own assignments.

But all small business owners discover challenges as they grow. For Reflected Spectrum Photography, Laura was already an experienced photographer, but running the other aspects of the business, such as sales, marketing and finance, was difficult at first. Since her core competency was photography, she sought advice:

I continue to learn as much as I can about these fields to improve my knowledge and skills in those areas, but I have also benefited greatly from the help of good consultants, such as Zoo In A Jungle Marketing and Andrew Technology. Having expert advice available has been extremely helpful to give my business a head start.

As with most successful small businesses, Reflected Spectrum Photography focuses on the customer experience and building relationships. Relationship-building is easier for small businesses than with large ones, which is a key competitive advantage of being small. Laura agrees and adds, “I really enjoy building relationships with all my clients. I find it very rewarding to be present at the most special moments in my clients’ lives, and to see how their children have grown at each new portrait session.”

Laura realizes that satisfying her clients involves more than delivering beautiful photographs, so she ensures they have a great experience during the photo shoot as well:

I try to help my clients feel relaxed and get them excited about having their pictures taken. If my clients are enjoying themselves, that allows me to capture special moments as they happen and preserve them as art, and I hope that they will be treasured for years to come. The most rewarding part of my job is seeing the expression on my clients’ faces when I’ve captured the perfect expression of happiness on their child’s face, or caught a spark of real emotion from their wedding day. If my customers enjoy the experience and love the results, they are likely to hire me again in the future and refer me to their friends.

As for building her customer base, Laura has employed a very successful web marketing strategy and client referral network. She says, “Before you can make a client happy, you first have to actually get some clients, so well planned sales and marketing strategies have played a key role in my success.”

As a successful small business owner, Laura parted with the following advice for aspiring entrepreneurs:

Before you start to focus on selling your products or services, build a solid foundation for your business to grow on.  Once you become successful, you may be too busy with your clients to focus on building a good web site, formulating targeted marketing initiatives, or finding a record keeping system that works for you.  If you need help with any of these things, don’t be afraid to ask!  Help is out there in many forms.  Books, forums, internet articles, and expert consultants are all available to help you get your business off to the right start.

Contact Info:

Reflected Spectrum Photography
Laura Poland
http://www.reflectedspectrum.com

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Advances in marketing technology allow us to learn so much about our customers. With the information customers share with us, it’s never been easier to develop customer relationships and loyalty. But when the technology is used to create paint-by-number experiences, customers will feel a dissonance and know you aren’t actually interacting with them. Customers are very clever and can tell when companies use marketing technology against them instead of for them.

Laura Poland, an Indianapolis wedding photographer and close friend, experienced this technology dissonance first-hand with OvernightPrints.com. She usually orders business cards and brochures using her professional email address. However, one time she placed an order using her personal email address. OvernightPrints.com stored both of these addresses in their marketing database but didn’t record that the addresses belonged to the same person.

OvernightPrints.com’s records showed that Laura was a loyal customer when she used her professional email address. They sent her the following year-end coupon for 25% off any order:

But OvernightPrints.com also had Laura’s personal email address on file. Clearly, the personal email address wasn’t loyal to them. It had only placed one order. In a bid to “activate”  this dormant customer, they sent a sweeter deal to the email address that had only ordered once:

We wanted to give OvernightPrints.com a chance to respond to Laura’s disappointment at finding her loyalty was not rewarded. Here is the email from their customer service department:

Part of our marketing strategy to reactivate “inactive” customers is to send them different offers, which sometimes offer greater discounts.  We also have a Loyalty Program for our top customers, which provide excellent discounts as well. Should your purchases reach the level that qualifies you for the program, we would very much like to invite you to participate.

So it seems that Laura is neither loyal nor disloyal enough. OvernightPrints.com uses their technology to categorize their customers, and it seems some categories are luckier than others.

What lesson should we all learn from this marketing faux pas? (Besides that ordering infrequently from OvernightPrints.com is the best way to score deeper discounts). If a company tries to use technology to “cheat” some customers, the customers will find out. And that will erode their relationship with the company. No one stays loyal to a company (or friend) that doesn’t show loyalty to them. Carefully use your marketing technology to bring you closer to your customers, instead of further away from them.

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Neale Martin has a great book out– Habit: The 95% of Behavior Marketer’s Ignore. It’s enlightening, and his research is well documented. The basic premise is that our conscious mind can only think of one thing at a time, so it hands off as much responsibility to our subconscious mind as possible. The subconscious mind then makes decisions based on cues from the environment and what was successful in the past.

As you might expect, most regular purchase decisions get delegated to the subconscious mind. Seriously, who evaluates their toilet paper purchases each time they stock up?

One particular passage in Habit really caught my attention. Martin discovers a truth explored by Steve Yastrow in his book We:The Ideal Customer Relationship: your existing customer relationships contain vast growth potential for your company. It’s all about latent profit.

“The power of advertising to maintain and strengthen the habits of existing customers is far greater than its ability to persuade noncustomers to try a product. Seeing an advertisement in a magazine or on a billboard for your brand reinforces your choice. Similarly, seeing a product you already own used in new ways can create an immediate trial opportunity. Marketers often neglect reinforcing behavior because they are pressured to acquire new customers, often at the expense of their existing, and profitable, current customers (Neale Martin, Habit, p.118).”

As we all know, buying new customers is expensive. It involves getting someone to notice your product, realize what it could do for him, trust you enough to try it, then find a channel for purchasing it. And that’s if everything goes according to plan.

But influencing a customer that already trusts and relies on you to buy more or buy other products from you isn’t expensive. Most of the work is already done for you because of your relationship with the customer.

Here’s an example. A client sent out a blanket mailing to households within a three-mile radius of their location offering a special discount to new customers only. They stuck to the standard marketing tenet of discounting to attract new customers, but they risked alienating existing customers. (Customer surveys later proved this point as current customers complained their neighbor, relative or friend got a better deal on services.)

There are several lessons to be learned from this incident.

• First, if you are going to show an advertisement to the general population, you had better give an offer anyone can use.
• Promotions don’t occur in a vacuum. People talk and like to compare deals.
• Finally, it is more valuable to reinforce the behavior of a current customer by rewarding him and encouraging him to try a new product than to hope you receive a one-off visit purchase from a stranger.

The moral of the story (and point of the article) is to value your customers and realize how much latent profit exists in your current customer base.

We often call current customers, “existing customers.” That means potential customers don’t even exist yet! It takes much effort to call potential customers into existence, but relatively little effort to improve your relationship with your customers. A customer who is loyal to your company will buy more products more often and will rave about you to their friends.

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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.

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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.

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