How do retailers create irresistible ‘customer flypaper’?

Jan 28, 2020 | Customers, Marketing, Small business

 

As a very young kid, I remember my grandmother having flypaper stuck around her kitchen. From time to time she would smear something smelly on it, which doomed any flies in the neighbourhood.

Wouldn’t it be nice to have ‘Customer flypaper’ for your business?

Once attracted,  they will never leave, simply because they never want to.

A secondary but ideal characteristic of that customer flypaper would be that those customers who were just there tyre-kicking, shopping for the cheapest price, or were inclined to just waste the time of you and your staff, would be repelled.

Nice. I have seen such a metaphorical commercial flypaper at work.

My aging mother lives in a major regional centre, and has a range of pharmaceutical and ancillary needs. A local pharmacy has created a veritable moat of flypaper around his ever increasing customer base, my mother amongst them.

How has he done this?

  • Focus. He focusses his attention on his current customers, personalising their experiences and interactions with the pharmacy and its staff. This is done by a combination of digital record keeping software, and old fashioned humanity. If you want loyalty from your customers, you have to earn it, as it is rarely just given, and then never lightly.
  • Differentiation. Finding something that is challenging to replicate, and adds value to a cohort of customers creates a powerful attraction. In this case, the pharmacist is a compounding chemist, so is able to combine and mix the medications in such a manner, that instead of taking a pile of pills twice a day, my mother is able to take just one or two.
  • Rewards. Current customers are rewarded, not by money, discounts, or any of the other easy to replicate offers, he recognises and rewards their psychology, their instinctive need to be a part of some sort of community. In the early 50’s, psychologist F. Skinner did a series of experiments, using rats and pigeons as subjects, since validated widely in labs, and obvious any time you walk into a location with poker machines. The psychological power of an intermittent reward can be compelling, for some, irresistible. This pharmacist uses intermittent rewards that confirm he cares about his customers. A vase of flowers sent when one is in hospital, a handwritten birthday card, remembering a grandchild’s success at school, all sorts of things that just demonstrate he, and his staff, care.
  • Service. Older people sometimes find it hard to get out and go to the pharmacy. So, there is a free delivery service, for your compounded few pills, all sorted into the times you must take them, packed in a daily and, morning/afternoon blister pack that even someone with advanced arthritis can open. This is all run on an account, so not only can you get the pills delivered, you can also ring up and get other items stocked delivered at the same time, paid for in one simple monthly transaction. Being cynical, I compared the prices of a number of the ‘grocery’  items my mother had bought in this manner to other retailers. While it was not the discount promotional price sometimes available in woolies, they were by no means capitalising on an opportunity to gouge.
  • Overheads. This pharmacy is located in a suburban shop, next door to a butcher, baker, and physiotherapist, with generous and easy parking outside the door. Not only is this convenient, it would be a cheaper place to have a store than in a location with heavy passing foot traffic, and leaves a bit more in the kitty for doing the things that really matter to customers.
  • Collaboration. There is considerable collaboration between the co-located shops. The pharmacist also collaborates closely with a number of the local GP’s and specialists to ensure that their patients receive the best possible care, and medications. Mums GP from time to time, varies the dosage of some of the things she takes, and communicates that change directly to the pharmacist. This ensures that the information is clearly communicated and understood, and adding a layer of added professional scrutiny to the mix of medications she takes.
  • The ‘original’ social media. Word of mouth is the original social media, and still by a country mile, the best. My sister who lives in the town, and helps Mum, often picks up bits and pieces in the pharmacy for herself, as well as Mum. The level of service and care evident, and the simple fact that the staff also know her, and her family, means not only would she not go anywhere else, but she will not allow any of her friends or acquaintances to go anywhere else.

All this adds up to very powerful ‘commercial flypaper’.

It is not easy to build, takes time, effort, and investment ,as well as a very clear strategy within which to build the tactics that act as the flypaper.

 

 

 

The new Revenue Generation paradigm

Nov 25, 2019 | Customers, Marketing

When was the last time you made a sale without the customer first doing a google search on their problem, and alternative solutions, before you knew they existed?

A while ago I bet!

Customers no longer need you, the information you have, and  the products you sell, simply because they can easily find many alternatives.

The traditional sales funnel, starting with awareness, moving through familiarity, to intent and action, is dead. The model of a marketing function producing ideas and collateral, which is thrown over the organisational silo wall to sales to use for everything from the cold call to take the order is also dead.

In its place is a flywheel with has customers at its centre.

This simply means you have to know your customers intimately, not just their demographics, their circumstances and behavioural patterns. This in turn implies a great deal of work has been done in defining who is your ideal customer, and being able to reach out to them at a time when they are in ‘buying mode’, with a solution to the problem they are facing, that you can solve better, in some way, than anyone else.

There are no magic bullets to any of this, it takes hard work, experimentation, and persistence, and most importantly, the assistance of those customers you do know well,  to tell you what you need to do to keep them. When you enhance your levels of service, then they will be your sales force, spreading the word, one by one.

The Buyers journey is also an old fashioned cliché, usually represented by a linear process. These days it is no such thing, it is more a series of many interdependent decision points, whose order is often  changed as your ideal customer drops in an out of a decision cycle that is independent of you, the seller.  

No longer should you see Sales and Marketing as separate functions, one feeding the other. Both are part of a highly variable non-linear Revenue Generation process over which you may have some influence, but no control.

The day of the functional silo being efficient is over, thrown out the window by the power of the buyer!

 

 

 

 

 

5 meanings of ‘Send me a proposal’

Oct 21, 2019 | Customers, Management

 

Send me a proposal is a phrase I hear from time to time, and most of my clients hear often.

The challenge is to interpret what it really means.

Possible meaning 1. You have their attention, your pitch has generated genuine interest, and it is likely that there will be a job here, assuming the demons of the procurement process, and that person in the background with the power of veto, is amenable. Great.

Possible meaning 2. There is a job here, but you are not going to get it. Our procurement process requires us to have three quotes, and yours is number three. We can now confirm our first choice has the job.

Possible meaning 3. Great meeting you, thanks for the time and information. Your offer is really interesting, and I would like to go ahead, but cannot. However, I really like you, and would not want you to feel as if you have wasted your time, so send me a proposal.

Possible meaning 4. We think we have a problem, but are not sure, and even if we have, are not sure if it is worth addressing. Therefore, have a think about it, do some preliminary research, and give us your views, we will be grateful, we will both know  a bit more.

Possible meaning 5. I am just making myself feel important by asking for a proposal, but do not have the authority or budget to commission such a crazy project.

Clearly there are many variations, but they seem to boil down to these five.

I recently made the mistake of preparing a proposal for an industry body, knowing at the back of my mind that it was a waste of time, but the exercise of gathering the information to prepare it was useful for other reasons, so I proceeded. As anticipated, there have been a number of requests to amend the proposal, which has been done, but I do  not anticipate a green light any time soon.

As consultants, and service providers, we can spend a lot of time preparing proposals that will never go anywhere, and the time we spend is not valued by those who are asking us to do the preparation. It is up to us to leverage the opportunities as we best we can.

There are several strategies you may want to think about, all require you to have some sort of

‘RFQ Qualification’ process in place.

  • Politely decline the opportunity. It seems that sometimes when you do this, it just confirms in the mind of the potential client that you are in fact the right person for the job. You can then go around again if you choose to.
  • Reframe the RFQ so that you are responding to the question through a different frame from the one your competitors will use. At least that way, a real choice has to be made, and perhaps some deeper thought put into the brief, and ultimate choice. Sometimes this works.
  • Subcontract the job to someone else, and should they get it, you can clip the ticket.
  • Run for the hills.

In most cases where a proposal that acts as a competitive tender is required, there will already be a preferred tenderer. If you do not know who it is, it is not you!

 

Header cartoon credit: Scott Adams, again nails it.

 

 

 

An alternative view of ‘KPI”

Oct 11, 2019 | Customers, Marketing

 

We all understand the term ‘KPI’, Key Performance Indicator. It is always used as a term to describe internal performance metrics.

Our customers employ us to deliver value, a solution to their problems, a means to deliver some sort of gratification. Yet, we use as performance measures things that are of importance to us, usually irrelevant to customers. Sales revenue, margins, share of wallet, customer churn, inventory turn, factory efficiencies, and so on.

How many of your customers give a toss about your factory efficiencies or sales revenue?   The reason they came to you is that you made them a promise, sometimes unspoken via your brand, sometimes explicit via your advertising.

Perhaps the KPI metric should be reversed to ‘Kept Promise Index’.

The promises we make have no positive weight unless they are kept, then they carry weight. When promises are not kept, they also carry weight, far greater than when they are kept, but it is negative weight.

In my experience, a promise not kept is remembered, commented upon, often generating disproportionate  anger and frustration to be vented somewhere, usually these days on social media.

Last week my internet service went down without notice for 16 hours, as always, right in the middle of a research project. I will remember that, and act on it, whereas for probably 99.9% of the time, the service is there, uninterrupted, at my demand, but that is the promise, so I will not necessarily remember that 99.9%, it is simply expected.

However, when the promise is made explicit, and it comes with a guarantee, it can become a huge marketing benefit. For example, if I was a plumber servicing domestic  markets, I would explicitly make two promises: turn up when promised, and leave the work site cleaner when we leave than it was when we arrived, or there is no charge.

I think there would be a premium price in that, as it is a guarantee of a promise to be kept!

How many of your KPI’s would your customers care about?

 

Header cartoon courtesy Scott Adams and ‘Dilbert’

How do you delight a customer?

Oct 7, 2019 | Customers, Marketing

Delight the customer has become a cliché, popping up in all sorts of places from PR blurb, to websites, mission statements, and sales rev-ups.

However, few seem to have any real idea of what it really means, can put a solid foundation under the fluff, to make it something meaningful.

I asked the question recently of a group, one of whom had used the words as a throwaway.

 ‘What does delight the customer mean to you’?

I got the expected fluffy strings of adjectives and adverbs back, until someone at the back of the room came up with what I think is the right answer.

She said, ‘We provide an answer to a pressing problem for our customers that is dramatically superior to anything else they have seen’

Do that, and no matter the words, your customer will be delighted.

 

Photo credit: David Woo via Flikr

How can you build a relationship with an algorithm?

How can you build a relationship with an algorithm?

Sep 2, 2019 | Customers, Marketing

You cannot.

Building a relationship with an algorithm is beyond even the wildest imaginings of the ‘AI forever’ set, which is why I prefer people.

Algorithms are there to be gamed.

On the provider side, wherever you see a platform that uses ranking algorithms, at some point, it will become a pay for performance regime. Equally, when the algorithm is king, the gamers who understand the system better than you, will win. Algorithms cannot tell the difference  between an article ‘written’ by another AI algorithm, and one that you sweated over, but your friends and connections who genuinely know you can.

When you meet someone and you seem to be on their ‘wavelength,’ stuff happens, deep conversations, referrals, collaboration. When was the last time an algorithm referred you to someone that was useful, and who had not paid for the referral via some means or another?

What happens when you receive a thank you via email, generated by an autoresponder? You ignore it, often do not open it, but if you recieved  a hand written note, posted, it is opened every time, and remembered.

It takes a bit more effort, which is why it works, it taps our deepest needs to be social and connected to people.

Algorithms are not human, they have no conscience or social awareness.

If I suggested that we put an ad for grog at an AA meeting, you would be disgusted with me. However, and algorithm does not have any social conscience. Such an ad would likely be very successful, and deliver a great ROI on the advertising cost, which is what  algorithms are designed to do.

In our digitising world, those who continue to demonstrate their  humanity will win in the end.

Header cartoon courtesy Tomgauld.com