Where Did Your Customers Go?

Marketing researchers have obsessed over how to make customers become loyal customers.  Large corporations have devised elaborate customer loyalty programs. But things are changing, quickly. Nowadays, customer loyalty is slipping through the fingers of corporations. I sifted through several market research studies on loyalty and brand loyalty. I concluded that when it comes to keeping customers loyal, there is no one magic bullet or best practice.

Here’s an example of a customer (me) going from loyal to disloyal. I used to be a loyal customer of United Airlines. I attained the status of Premier Executive, got all the perks, and enjoyed life in business class. Then Southwest entered my local market. Cheap fares, no frills, easy to book. I had reservations (is there a pun somewhere here?) about the cattle-car feeling at Southwest and its policy of using a first-come, first-served seat selection process. Before I switched, I considered what it meant to me to give up my status on United and hop on an all-steerage airline.

When I started writing this piece, I realized I was Mr. New Consumer. I wanted more for less. Maybe Southwest would give me more for less. Let’s see, there were more Southwest flights available at all three of my local airports. Not only were there more flights, but Southwest also flew to more places than United.

Fares were considerably cheaper. To make matters worse with United, I became skeptical when United started limiting perks for frequent flyers. And, I was more doubtful about the future of this airline when United merged with Continental Airlines. I started to see tangible value by flying Southwest. I decided to switch from United to Southwest. I thought I made a good decision.

To complicate matters about customer loyalty, I know that by using one of my credit cards, I could use points accrued from making purchases on my credit card to pay for airfares, hotels, gas, or airline baggage fees. For example, there are credit cards that earn about 2 percent rewards per $1 spent when you redeem for travel. Credit card customers acquire 40,000 (or some other amount) bonus miles when they charge $3,000 worth of purchases within a given time period. This translates into about $400 in travel statement credit. The beauty of using this type of credit card is you are not limited to using any one airline.

What did I do? I closed out my old credit card, signed up for this new one, and started accruing points. So much for being a loyal credit card customer. Now I could pay for my Southwest trips using points from my credit card, and get great fares, too.

A Bit of Recent History

The story doesn’t stop here. In 2008, Airbnb bursts on the scene. You all know Airbnb. According to its website:

“Airbnb is a community marketplace where guests can book spaces from hosts, connecting people who have space to spare with those who are looking for a place to stay.”

Through their experiences on Airbnb, guests and hosts build real connections with real people from all over the globe.

Airbnb has taken the idea of renting rooms to a whole new level. Prior to booking your room, you can read customer reviews as well as read what the property owners say about past renters.

The arrival of Airbnb type services brought up a key fact about loyalty. Customers now rely more on information about hotels from other customers rather than from the hotel’s advertising.

There goes loyalty down the drain

According to a recent study, there has been a drop in customer’s loyalty to hotel brands. Only 8 percent of those polled who stay in hotels said they always book

at the same hotel chain. Two reasons for this mass defection might be consumers can quickly find cheaper hotel prices and customer reviews on websites such as Trip Advisor, Kayak, and Trivago. Who wouldn’t want to pay less for the same or better quality hotel room? Remember today’s customer demands high quality at reasonable prices.

Customers are on high-alert, searching for the best value for their money. Kiss loyalty goodbye.

Now back to the beleaguered airlines. The market research firm Colloquy found “54 percent of U.S. airline loyalty-program members
are ‘unhappy’ with their reward options”. And, 48 percent say they’ve been “frustrated” by the reward redemption process.

Let’s look at the chronology of this story.

  • First, I defected from United to Southwest
  • After that, I used up all of my hotel points
  • Then, I applied my credit card points to pay for hotels or airfares
  • Finally, I switched to using Airbnb properties and paying for it with points from my credit card.

When I seriously began to rely on other people’s reviews, I became more and more aware of the impact other customers had on my purchasing decisions. The customer’s needs were no longer driven by loyalty, but by quality and value.

Selling is Not a Four Letter Word

“Sales are contingent upon the attitude of the salesman-not the attitude of the prospect.

W. Clement Stone

Two of the most frustrating challenges preventing new business owners from becoming successful marketers are: 1) fear of selling, and 2) fear of setting and discussing fees or prices. I often hear new business owners say things like, “I’m not a salesperson”…”, I don’t know how to do it”…”I feel anxious at the thought of selling myself”.

Before we discuss how to overcome your fears, let’s talk about the role anxiety plays in a sales situation.

The Look Out Syndrome

You’re meeting with a prospective customer or client and start to feel nervous and self-doubting about your ability to sell. As your anxiety level increases, you focus your attention on the other person–their body language, facial expressions, or general demeanor, instead of listening to what is actually being said.

You might assume the other person is thinking negative thoughts about you. Often, your evaluation of these non-verbal cues is incorrect.

You might say to yourself, “Will I get the sale?” Now, more doubts about yourself start creeping into your head–“Is the look on the other person’s face saying he doesn’t want to work with me or purchase my product?” As a result, you probably didn’t hear most of what the other person said. You were too busy looking into the other person.

I call this the Look Out Syndrome: I am looking at you looking at me. 
And, 
I am wondering what you are thinking about me.

When you’re on the Look Out and not listening, you don’t say what you want to say because you’re too busy trying to figure out what the other person is thinking. Can we attribute Looking Out to inexperience? Immaturity? No self-control? Probably none of these.

Chances are you are scanning the prospective client so intensely that you repeat yourself or ask the same question more than once. Clearly, your thinking brain is offline.

How to Avoid the Look Out Syndrome

  1. Look at the other person, not into them. Focus on the color of their eyes, the color of their hair, or any other feature. Focusing on physical features will calm your brain so your thoughts stay focused in the present. Then there is little or no room to think what they’re thinking about you.
  1. Listen. This is probably the easiest thing in the world to say and the most difficult thing in the world to do. What is listening? How do you listen? How do you know if you’re being listened to? My advice: go online. There are plenty of resources and tutorials that can help you develop effective listening skills.
  1. Think business at all times. Your job is to sell your product or service, not to start a budding friendship. You don’t want new friends; you want customers or clients. If you focus on understanding and satisfying the business needs of customers and clients, rather than Looking Out, you’ll be able to keep personal interests out of the equation.

Fear of Selling 

“Pretend that every single person you meet has a sign around his or her neck that says, ‘Make me feel important.’ Not only will you succeed in sales, you will succeed in life.”

Mary Kay Ash

Some small business owners suffer from a debilitating condition called Fear of Selling. This phobia occurs when a business owner starts thinking about being in a position to sell their product or service. The business owner goes into a panic and fear mode. It doesn’t matter if the sales situation is on the phone, via Skype or in person, fear still rears its ugly head.

Two of the most common fears are:

  • Fear of delivering a sales presentation to a group
  • Fear of giving a talking a conference or seminar

Yes, it’s the dreaded fear of public speaking. The technical terms for fear of public speaking is Glossophobia.  Two more fears that are common are:

  • Cold-calling a prospect
  • Talking to a known prospect on the phone

The fear of talking on the phone presents a real challenge for some business owner. The business owner cannot ‘read’ the other person. The business owner can’t pick up on any non-verbal cues. It’s almost as if the business owner is involved in a monologue, not a sales dialogue. It’s also hard to know when to stop the conversation so the other person can speak.

To understand how you feel when confronting the above fears, ask yourself which one of the following reactions apply to you?

Fear of delivering a sales presentation/fear of giving a talk at a conference:

  • Been there, done that – no big deal
  • I feel nervous, sick to my stomach, but I do it.
  • I feel nervous but I’ve got it under control.
  • I’m breaking out in a sweat just thinking about it and I’m not going to do it.

Cold-calling a prospect

  • Been there, done that – no big deal.
  • I feel nervous, sick to my stomach, but I do it.
  • I feel nervous but I’ve got it under control.
  • I’m breaking out in a sweat just thinking about it and I’m not going to do it.

Talking to a known prospect on the phone for the purpose of upselling

  • Been there, done that – no big deal.
  • I feel nervous, sick to my stomach, but I do it.
  • I feel nervous but I’ve got it under control.
  • I’m breaking out in a sweat just thinking about it and I’m not going to do it.

Here’s what you should do and what you should not do to minimize your fear.

#1 Do not read, word-for-word your presentation. Refer to key talking points using an outline.

#2 If you are using PowerPoint, do not look at your slides. In other words, don’t talk to your slides. Instead, face your audience and talk directly to them. Again, talk from an outline

#3 If you want to create more anxiety and raise your fear level, tell a joke at the beginning. Chances are, you’ll be so anxious that the joke will fall flat. No canned jokes, please.

#4 Keep your phone calls brief and definitely work from a script.

Even though email marketing is an effective way to deliver your sales message, you want to think twice about whether you are using email as a way to avoid talking on the phone.

After all, you don’t want to have an anxiety attack in front of potential customers.

 “Too many of us are not living our dreams because we are living our fears.” Les Brown

Here are four more fears of selling. These fears revolve around the business owner’s lack of confidence and feeling they are not persuasive or convincing in a sales situation.

  • A manifestation of fear of selling is hiding behind jargon, instead of speaking informally. Using jargon make it almost impossible for a customer to relate to you, as a person. Jargon keeps you at a distance from your customer. I was attending a local networking event, and overheard a psychotherapist talking to a lawyer – a potential referrer. The therapist thought the lawyer might have clients with emotional or relationship problems. In this case, the therapist was trolling for referrals. The therapist said to the lawyer, “I do psychotherapy, Gestalt Therapy, Trauma-Focused Cognitive Behavioral Therapy, and EMDR”. That was a sure-fire way to turn off a potential referrer. This is a great example of how not to be relational. There might be a time, when in a sales situation, you would use some technical talk, especially if you are talking to someone who is in your industry or profession.

 

  • Asking prospective customers if they want to meet rather than suggesting a specific time to meet. When people feel insecure about themselves in a sales situation, they do not want to irritate or turn off a prospective customer. So, they ‘play it safe’ and ask.

 

  • Convincing a skeptical prospect of the value of your service or product. You are not a door-to-door salesperson selling vacuum cleaners. Don’t laugh, some people feel they are going door-to-door selling. You are selling value and solutions based on your professional expertise. If you stick with the tried and true sales approach of discussing the benefits of your product or service, you won’t feel like a vacuum cleaner salesperson.

 

  • Knowing when to end the discussion. When it comes to closing the sale or terminating a conversation, you want to ‘land the plane smoothly’. Why is landing the plane so difficult for some people? Why do competent people get flustered? Some people hesitate landing the plane due to their fear of rejection. Landing the plane requires you to be open, honest, and direct with the other person. You might balk at having to plan and even rehearse your landing statements. What happens if during the landing process, you experience the dreaded awkward silence? It’s perfectly okay to wait a few seconds without conversation. This is a good time for you to take a deep breath and remember your landing script.

Here are five examples of how and how not to land the plane.

Wimpy Way                                                  Direct Way

Can I call you?                                                When can I call you?

Do you have a business card?               I’d like one of your business cards

Can I have your email address?
            What’s your email address?

Maybe we should have lunch?              When, at your convenience can we have lunch?

Can I be a Contact in LinkedIn?           I’ll make contact with you on LinkedIn


These suggestions might seem simplistic and common sense. But in a sales situation, with your fears and anxieties out of control, you can remind yourself that you have tools to cope.

 

Fear of Fees

“Fears are nothing more than a state of mind.” Napoleon Hill

Over the years, I’ve talked to small business owners, lawyers, psychotherapists, physicians, accountants, and other professional and personal service providers. When I ask them how they feel about having a direct discussion about their fees, I hear:

  • “After being in practice for many years, I’m still uncomfortable bringing up the subject of fees”
  • “I wish someone else would do it for me”
  • “I try to avoid it as much as possible”
  • “It’s always an awkward conversation”
  • “I don’t feel I’m worth it to charge this much”

 I was coaching a young woman, Natalie, who recently graduated with a doctoral degree in physical therapy. She wanted to open a private practice but questioned her ability to ‘sell herself’. She was filled with self-doubt. One of several goals of coaching was for Natalie to confront her doubts about selling. We made a list of her self-doubts regarding selling. We addressed these self-doubts by replacing each negative message with a positive one.

 

Negative messageReplaced with Positive Message
I have no confidence in my ability to sellI’m really good at building relationships. I can leverage that skill to promote my practice.
I don’t know where to start when it comes to selling my servicesI don’t need to know everything about selling. I can ask a friend for help.
I am more comfortable talking about physical therapy than selling myselfI bring a lot of passion to what I do. I’ll communicate this to engage potential patients.

Two years after Natalie finished coaching with me, I sent her an email and asked her how things were going. She said she opened a physical therapy practice with a colleague from graduate school. She was treating patients and loving it.

What about you? Look at the questions below and answer YES or No for each question. If you answered YES to any of the questions, ask yourself what negative messages you have about money and suggest a positive message to replace the negative one.

  • Do you feel that you do not have enough experience to justify your fee?
  • Do you ask your customers if they think your fees are reasonable?
  • Are you afraid you are not charging enough?
  • If you state your fee, are you afraid the customer will say no?
  • If a customer balks at your fee, do you drop the price?
  • Are you afraid you are charging too much?

Believing in yourself, and your competence will help you overcome your fear of selling. This won’t happen overnight, but keep on reminding yourself of your positive message.

Let’s take a deeper look at the topic of fear of discussing fees. The discussion of fees would not be complete without talking about money.

“Nearly all of the 2014 Stress in America survey respondents (95 percent) said parents should talk to their kids about money. But only 64 percent said they themselves were taught how to manage money, and just 37 percent said they often talk with their family members about the subject.” Stress in America Survey

Ask yourself:

  • Did my family of origin speak openly and in a healthy way about money and finances?
  • Did my family of origin openly and fearfully discuss money or finances?
  • Did my family avoid any discussion about money?

Money avoidance: Believing that money is bad or that you do not deserve money. For people with this personality, money can evoke feelings of fear, anxiety, or disgust. Low-income, younger, and single individuals were more likely to hold this attitude. Brad Klontz

One of my clients told me that, as a child, her parents were hesitant to discuss money. In fact, they did not discuss money at all. As an adult, my client started two businesses. Both businesses were bankrupt within two years. My client blamed her failure on her inability to handle money. After her businesses failed, she confronted her parents about the money issue. Her father said he was afraid that giving his children too much information would have a negative impact on their adult life by diminishing their child’s goal or values. You can see why this client was fearful.

What are some of the manifestations of fear of discussing fees?

You have probably encountered a potential customer/client who, the first thing off the bat says, “How much do you charge?” or “What’s your fee?” In the rush to make the sale, you tell the other person exactly what they are looking for –a price. This person gets what he/she is looking for and most of the time will terminate the discussion. I affectionately refer to these people as ‘price shoppers’.

If you have fear of fees, here’s a way to slow down your thinking, so you can focus. Initially, do not state your fee. Do not say ‘”how can I help you?” (The response to “How can I help you” sets up an unrealistic expectation that you will help this person). Also, do not launch into your elevator speech. Eventually, you’ll want to discuss fees. Instead, ask a few benign questions such as:

  • What are you looking for?
  • Have you talked to others in the same business?
  • Have you ever purchased services (or products) like mine?

If you are unable to redirect the conversation back to the other person’s needs, then quickly land the plane by simply stating your fee (or a range of fees) and ending the conversation. Some business owners make one more attempt to turn the conversation back to the customer. If this doesn’t work, say, “goodbye and good luck!

When I first started out as a freelance marketing consultant, my only reference point for how much to charge was based on my experience at a large consulting firm. I could not charge anywhere near what they charged. I ruminated over whether I should charge an hourly fee or one fee for the entire project. I had no idea of what those fees would be. I realized I was anxious about talking about fees. I’d rather not talk about fees.

No one in my family would talk about money. No one would talk about the family budget. I never knew if my parents were or were not in debt. I had no idea of what things cost and how to budget. I tried to focus on the positives. I knew I had all the credentials and experience that potential clients wanted. I then knew I could face my fears and discuss fees with my clients.  Remembering that my family never discussed money helped me realize why this was hard for me. It took awhile for me to come to grips with this fear.

Now that you’ve examined your fear of selling and fear of fees, here are four tips you can use to minimize the impact of your fears.

1. State your fee and shut up. Don’t justify your fee or over-talk. Let the customer respond. Keep this discussion as short as possible.

2. Stick to your guns. Do not sell yourself short by dropping your fee. In a moment of panic and in desperation to make the sale, all sorts of thoughts are racing through your mind. You know how much time, energy, and money it took to bring your product or service to market. Leave no room for negotiation.

3. Take a sales training course. Sometimes, I recommend that my clients attend a short sales training course. I’m not referring to 2-hour sales training seminars designed to lure you into purchasing a costly training package. In fact, I have some reservations about sales training courses. First, most of what is taught is common sense, just neatly packaged in a step-by-step methodology. Some sales training courses focus on the techniques used by the course leader. These leaders tend to be somewhat charismatic and the focus is on the leader, not you. Second, many sales training courses use their own jargon, which might be off-putting to you. Third, unless specifically tailored to your profession or business, general sales training courses might not offer specific industry-related insight or buyer behavior patterns. Fourth, some sales training courses offer a plethora of tips, tactics, and ideas. This might be the case of too much information. If you do want to take a sales training course, I recommend you consult your professional or business association. See what they have to offer. Weigh the time, cost, and energy you spend on taking a course against the benefits you might get. See what happens.

4. Get a mentor or a coach. Mentors are individuals who are willing to assist you at no cost. Mentors tend to be senior executives or retirees. Many communities around the country have mentoring programs sponsored by local business councils. Coaches charge you by the hour. Whichever you choose, getting a mentor or coach is probably the best way to get a handle on how to discuss fees. It’s been my experience the best mentors are those in businesses not related to yours. Even though they do not have your industry-specific information and experience, they do know how to do the most important thing you need: discussing fees and closing deals. You’ll get a fresh perspective on selling. Caveat: Look online and you’ll see many organizations that offer coaching certification. Before you hire a coach, check out his or her certification. Does the credential seem credible? Will the coach let you talk to current or former clients?

Now you have tips and tactics to use so you won’t be selling yourself short.

 

There’s lots more tips and tactics to build your business in Critical Connections-The Step-by-Step Guide to Transform Your Business Through Referral Marketing

Did You Ask a Good Question Today?

This is one of my favorite stories. Isidor Rabi (1898 – 1988) was a Polish-born American physicist and Nobel laureate. He was recognized in 1944 for his discovery of nuclear magnetic resonance, which is used in magnetic resonance imaging. When asked if there were any significant influences on his life, he said, “My mother made me a scientist without ever intending to. Every other Jewish mother in Brooklyn would ask her child, “So? Did you learn anything in school today?” But, not my mother. “Izzy,” she would ask, “did you ask a good question today?” That difference – asking good questions – made me become a scientist.” (As quoted in “Great Minds Start with Questions” in Parents Magazine, September 1993).

Izzy’s mother got it. She understood that asking questions is about engaging in meaningful dialogue.

I wish I knew about Izzy and his mother when I started my first job after graduate school. One of the managers where I worked took me under his wing and gave me two pieces of advice I’ll never forget.

  1. During your first few months on the job, don’t impress the employees with how much you know. Don’t offer up solutions or suggestions. Just ask questions. Ask as many questions as you can to as many employees as you can.
  1. When you are walking around the office, always carry a yellow pad with you.

There are two reasons to do this. The first is that it would not look good to others to walk around the office empty-handed. After all, “Idle hands are the devil’s workshop.” You need to appear as though you are doing something work-related. When you ask a question, surreptitiously write down what others said. Keep this list handy and use it as a reference when you would be in a position to answer questions.

From that point on, I never stopped asking questions.

Here’s a brief example of how to ask questions in a business situation. A customer asks you a question about your product or service or states a frustration. Instead of trying to answer the question or solve the problem, the very first thing you do is to take their question or their stated frustration, throw
it back to them, and ask for clarification. You might say, 
“What exactly do you mean?” “Tell me more about this.”
“Can you clarify your question?” Sometimes, people just want to be heard and are not looking for solutions. By asking questions, you’ll begin to engage in a dialogue.

Next time a customer asks a question or states a frustration, start asking questions.

There’s lots more tips and tactics to build your business in Critical Connections-The Step-by-Step Guide to Transform Your Business Through Referral Marketing

 

Business Relationship Destroyer #3: Making Up Stories

In the last two episodes of How to Destroy a Business Relationships, I talked about focusing on negative communication and not taking things personally. Today’s destroyer rears its ugly head when you try to guess what the other person is thinking. Destroyer #3 occurs when you make up stories about your customer or yourself. Every one of us is guilty when it comes to interpreting customers or what anyone says.

I was coaching Andy, a sole proprietor of a tax preparation and accounting service. Andy hung out his shingle one year prior to our meeting. He told me how much he appreciated the help I gave him and valued our time together. One theme we discussed was how to handle his irregular cash flow. His work was seasonal and cash pretty much dried up after tax season.

Our coaching sessions were held every other week. After each session, I would email Andy his bill. Our first two sessions were in January. Andy paid me at the end of January for the two sessions. The same thing happened in February. In March and early April, we met twice. I emailed my bill after each of the March and April sessions. By late April, I had not received a check from Andy.

Andy canceled his next session via email and wrote that he had to stop for a while He did not tell me why. Right before I received the email, I said to myself I would not see him until his bill was paid. I wondered what was going on. Why wouldn’t he pay? Why did he quit? So, I made up a story or two in my head about why Andy didn’t pay. After a few days of not getting a check in the mail and after making up some more stories about why he would not pay, I decided to email Andy, attach a copy of the bill, and ask him what was going on. I did not receive a reply. So, I made up more stories. “Maybe he didn’t value our work?”

A week later, I called him and left a message to call me. I was polite and asked him to return my call. No response. It was now the first week in May, when Andy called back. He apologized for not getting back to me. He said he was completely overwhelmed during tax season. He sent me a check the next week for the full amount.

You are emotionally and financially invested in making your business succeed. You want to make the right decisions in order for your business to grow. It is easy to fall into the trap of interpreting what customers say when you are feeling vulnerable or anxious.

Click here to learn  how to prevent yourself from destroying a business relationship.

Back to the Future

I found this amazing insight on ethics and interpersonal relationships from the Talmud written more than 1,900 years ago.

A wise man does not speak before one who is greater than him in wisdom or in  years; he does not interrupt the words of his fellow; he does not rush to answer; he asks what is relevant to the subject matter and replies to the point; he speaks of first things first and of last things last; concerning that which he has not heard,  he says, “I have not heard,” and he acknowledges the truth.

When I first read this, I thought whoever wrote it must have been a salesman or a great business coach. This short paragraph summarized the most important components of building business relationships. For me, the phrase, “A wise man does not speak before one who is greater than him in wisdom or in years” is more about wisdom than age. Think about it. If you’re meeting with potential referrers or prospective customers, who have been working in their business for many years, they are going to know more about their business than you.

Many veteran business owners and managers are keepers of the oral history of their business and have valuable information about their industry or profession. Don’t dismiss these business veterans as dinosaurs. You and I have plenty to learn from these folks. They are wiser in many ways. And, in order to take advantage of their wisdom, you have to learn how to listen. Yes, listen, with a capital L. (Read more about listening in my blog Giving Advice vs. Listening)

The second part, “he does not interrupt the words of his fellow” is something that does not come easily to some people. I’ve always wanted to record a video of my family – my wife, my two adult children, and two of my wife’s adult children – sitting around the dinner table. Everyone is talking at the same time. Interruptions are frequent. The introverted children can’t seem to get a word in edgewise. To say the least, it’s chaotic and frustrating for me, even though I talk a lot and interrupt. It seems like everyone has the most important thing in the world to share.

Has this ever happened to you? You’re listening to a customer and at some point in the conversation, you can’t wait to say something in response to what they are saying. Chances are, at some time during the conversation, you’ll interrupt the other person. This conversation then devolves into two monologues – yours and theirs. And, to make things worse, in order to be heard, one of you might talk over the other.

The next phrase states, “He does not rush to answer”. Our brain is wired to have the ability to solve complex problems. We’ve become so good at problem-solving it comes naturally to us. Think about a time when a friend or relative came to you complaining about a work problem. Did you rush to try and the fix the problem?

When I first started my consulting business, I would be talking with a client about a marketing challenge, and I’d be saying to myself, “I’ve heard this problem a hundred times and I have plenty of fixes”. I was rushing to answer and solve the problem instead of building the relationship and probing deeper to find the root cause of the problem or hearing the client’s own insight to solve the problem.

The following phrase says, “He asks what is relevant to the subject matter and replies to the point”. When you are in the midst of a dialogue with a customer or referrer, you want to keep your comments brief and to the point. You ideally want to keep the customers focused on their needs as much as you can. Remember, it’s not about you! Sometimes, when I’m with a prospect, I lapse into, what my wife calls, “my strident mode”. I sound like I’m dogmatic in the way I come across. When I feel myself getting stirred up, I tell myself to return to the land of listening.

“He speaks of first things first and of last things last.” The goal of your initial conversation with prospects is to build a relationship. You don’t want to do what car salesmen do. When you walk into the car showroom, the salesman would hook you and start closing the sale by asking, “What color car are you looking for?” This tactic might work for selling cars. Is this any way to build a business relationship? I don’t think so.

And finally, the phrase “concerning that which he has not heard, he says, ‘I have not heard,’ and he acknowledges the truth”. Do you know how hard it is to answer a question by saying, “I don’t know” or “I’ve never heard of this”? I think I have all the answers. After all, I’m the “subject matter expert”. It’s okay to say, “I don’t know.” Will it tarnish your credibility? Nope. Will it make you more authentic? Yes.

 

There’s lots more tips and tactics to build your business in Critical Connections-The Step-by-Step Guide to Transform Your Business Through Referral Marketing

 

Tale of Two Clothiers

It was the best of times for Beth. And, it was the best of times for Allie and Jenny. Two different retailer clothiers with two different approaches to marketing their business. Both in the start-up phase. Both on their way to becoming successful. Beth, Allie, and Jenny are in their late twenties. Beth is a mother of three and Allie and Jenny are in a long-term relationship. This is the story of their fledgling businesses.

First, a little background about Beth. Beth and her husband, Adam, lived in a New York City suburb. When Adam was offered a job in the Washington, D.C. area, they jumped at the opportunity and moved. At that time, Beth was working as a personal shopper at a top New York City department store. Eight years earlier, Beth attended fashion design school. She had the experience and credentials needed to succeed in business.

“If I don’t do it, somebody else will.”

When Beth first moved to the Washington, DC area, she looked at the demographic profile of her community and found the population of young couples was growing at a rate above the national average. In her community, there were no clothing stores for women in their 20s and 30s to buy, as Beth put it, “spunky modest clothes”. She knew this group of women cared how they looked. She was referring to Jewish women who want to dress modestly yet stylish.

Beth thought there might be a market for spunky modest clothes for women. So, she instinctively did what any good marketer would do. She reached out and asked questions. Beth asked a number of young women what problems they have finding stylish modest clothing. She asked what kinds of clothing they would like based on their religious standards. The answers were all the same. There was no place to get this type of clothing. Then she asked a more specific question regarding what type of apparel they couldn’t find. The answers were again consistent. They wanted tops, skirts, and dresses. And, they wanted reasonable prices. Beth knew price would be a key factor in determining whether women would purchase her clothes. The women also said the clothes found in department stores and online were not modest enough.

Beth took a deep breath and announced to Adam, “If I don’t do it, somebody else will”. And that’s how Beth started.

Beth made the decision to open a “store” based on what she knew, what she heard, and what was missing in the market. Beth found a gap and was going to fill it. Her store would be in the basement of her house. She applied and got a wholesaler business license. She was officially in business. The first agenda of business for Beth was to attend a fashion trade show in NewYork City. She knew exactly what types of clothing her customers would buy. She carefully sifted through the clothing designer’s merchandise and found just what she was looking for.

“I don’t believe this can happen.”

That’s what Adam said when the first box of clothing arrived on their doorstep. Boy, was he wrong. She placed her order for one large box of clothes. Three weeks later, she purchased seven boxes.

Beth’s first customer saw Beth’s bare bones Facebook page. Beth does not remember how the customer found her on Facebook. The customer told Beth she never heard of Beth’s store but, “really liked her clothes”. When Beth checked her Facebook page, she found most of her friends were from the New York/New Jersey metropolitan area.

Beth knew enough about her customers’ shopping behavior that she had to:

  • Price her merchandise at least 40 percent below department stores
  • Accept American Express, in addition to the other major credit cards. Beth knew she would be paying higher processing fees and many stores do not accept American Express
  • Make it easy to shop by offering convenient hours as well as the ability to schedule a private appointment.

She quickly found out that taking American Express was satisfying a critical need for her customers: convenience. Beth made sure to tell her customers, “don’t leave home without it”. This was an important selling point.

Online Strategy – One Step at a Time

Beth was not in a rush to jump into the world of social media to promote her business. She had a basic business Facebook page. She wanted Facebook as her only online advertising vehicle.

Beth decided to hold off on creating a website. She did not want to spread herself too thin. After all, she wanted a lifestyle that would allow her to spend time with her family as well as run a business. To be on the safe side she purchased a domain name.

Keeping it Personal

In Beth’s community, word-of-mouth about anything was a powerful force in terms of influence. One satisfied customer told her friend, who told her friend, etc. What happened? Her primary source of referrals came via word-of-mouth. Beth did not purposely craft a word-of-mouth marketing strategy. Beth was unwittingly creating buzz for her store.

After being in business for six months, Beth was contacted by a group of women who sold jewelry, cosmetics, and other women’s items. They banded together to open a pop-up shop. The location, for this one-day event, which drew more than 100 women was held in one woman’s house. Beth considered this opportunity a success for her. As an added benefit, Beth was able to get the names and email addresses of all of the women who visited the shop.

Pop-up shops are temporary retail spaces. Open for one day or several weeks, they range from selling a single product to hosting a private event. On a bigger scale, think of those stores selling Halloween stuff, which pop up in early October and disappear a few days after Halloween. This particular group of retailers set-up a one night pop-up shop. The organizer of the event took responsibility to promote the event. Beth sold all of her clothes and took orders for more. This was a total marketing success.

Soon after the pop-up event, Beth decided to expand her marketing efforts. She rented a booth at a local fund raising event. She was the only retailer selling stylish clothes. Once again, she was able to sell clothes and expand her reach into the local and surrounding communities.

Beth has taken the concept of providing excellent customer service to a new level. From a marketing perspective, she is building and maintaining relationships. She prides herself on her personal approach to her customers’ needs. She invites customers to her house to try on clothes. She makes every effort for her customers to feel special. Beth constantly exceeds her customers’ expectations. She goes to great lengths to sell eye-catching wrappings. She’s open late in order for her customers to shop after work. Customers can make appointments. Beth has a no-strings attached return policy. According to Beth, this liberal return policy is unheard of in her community.

During the holiday season, Beth sent boxes of chocolate with thank you notes to her top ten customers. This customer appreciation gesture goes a long way in building and maintaining relationships.

Beth decided to do something special for her customers and prospective customers. She set up a backyard event in the early evening at her house. At the event, Beth provided refreshments and soft drinks. She assigned Adam the job of starting and maintaining a fire pit. And, of course, she displayed her latest styles. She sold plenty of clothes that evening. Besides telling her customers, Beth only used her Facebook page to promote the event.

I advised Beth to keep a database of her customers and prospects. Building the database can be as simple as creating a spreadsheet and listing the customers’ name, street address, city, state, zip, email, items purchased, date of all contacts, and how customer found about Beth’s store. I suggested that as her business grows, she might find more categories for her database.

Let’s review Beth’s journey, so far. She:

  • Identified her primary target group
  • Recognized a need
  • Found a way to fill the need
  • Slowly rolled out her marketing program
  • Set up a reward program for her top-tier customers
  • Initially relied on word-of-mouth referrals
  • Focused only on Facebook for her online presence.

I asked Beth what her marketing plans were for the near future. She was straightforward and said:

  • Build a website
  • Open a brick-and-mortar store
  • Expand my reach to cover the entire country

When I asked her what her merchandising strategy would be, she unflinchingly said: I want to expand to a one-stop shop selling maternity clothes, shoes, tights, and accessories. I want my customer to walk out of my store with a complete outfit.

Beth took an old-school approach to promoting her clothing business. She did this in part because the demand for her clothes spread like wild fire via word- of-mouth.

 

The Other Clothier

Allie, my daughter, and her partner Jenny live in Brooklyn, NY. They both have day jobs. Jenny is a marketing manager for an online marketing research company and Allie works as a fashion photographer at a retail clothing chain.

A bit of history: They like to shop for clothes. On the weekends, they would comb department stores, boutiques, and specialty clothing shops looking for the right look. But when it came time to find the right style and the right size, their shopping experience would fizzled out. They would leave these stores empty handed and sometimes empty hearted.

“If you want something badly enough, you just have to do it yourself.”

One day, while eating brunch in their apartment, Allie blurted out, “We need to work on some kind of creative project”. Jenny was taken aback. “But we have good jobs!” Allie then reminded Jenny about how frustrated they got trying to find clothes they like. The clothes they found were too feminine, too masculine, too boring.

Putting on her marketing hat, Jenny said, “Why not, instead of selling menswear which fit into feminine style and visa versa, we offer styles which are slightly adapted to fit women. They came up with the idea of being a retailer of “contemporary fashion for women seeking clothing that blurs the line of modern masculine and feminine style”.

After talking to their friends, Allie and Jenny realized they weren’t the only ones who were looking for such clothes. Other clothiers were selling this type of clothing but Allie and Jenny wanted their personal touch to be reflected on the clothes they sold.

Crowd Control

In order to get their business up and running, they turned to the Internet and used crowdfunding to finance the initial stages of their business. Crowdfunding is a way to obtain small amounts of money from many people. There are hundreds of crowdfunding platforms. Two of the most popular are Indiegogo.com and Kickstarter.com.

According to Forbes.com:

“Each (crowdfunding) campaign is set for a goal of an amount of money and a fixed number of days. Once the project is launched, each day will be counted down and the money raised tallied up for visitors to follow its success. Instead of traditional investors, crowdfunding campaigns are funded by the general public.”

Allie and Jenny’s goal was to raise $10,000 from their crowdfunding campaign to be used to start building their online store. The campaign yielded $12,500. Perks, offered to those who contributed money, ranged from receiving a limited edition tee shirt for a contribution of $30 to a personalized styling session with Allie and Jenny for a contribution of $400.

Online and On Target

How were Allie and Jenny able to raise that amount of money in 34 days? You guessed it, by using social media: Facebook, Twitter, Tumblr, Instagram, Pinterest, Buzzfeed, and their existing barebones website. I was surprised to hear Jenny say they didn’t have the time and energy to put into using lots of social media platform.

Allie and Jenny’s Tumblr page features photos that range from their line of clothes to personal photos of Allie and Jenny. After one year in business, their Facebook page amassed more than 3,500 Likes. They Tweeted more than 2,600 times. On Instagram, they posted more than 900 times and have 6,400 followers. They pinned more than 520 times on Pinterest. After an article appeared on a Buzzfeed post that was linked to Allie and Jenny’s Instagram platform, their Instagram followers doubled in just a few days.

I asked Allie and Jenny why they did not use SnapChat. Allie said they like to control the quality of the pictures that appear in public and they cannot do it on SnapChat. Jenny firmly stated teenagers primarily use SnapChat. Teens are not their market.

In terms of generating buzz and capturing email addresses, Pinterest was the least effective platform for them. Allie said Pinterest was a good way for most retailers selling clothing, accessories, and those selling household goods to get business. However, they claimed their market is not active on Pinterest, but is active on Instagram and Tumblr.

Allie and Jenny, as sophisticated marketers, understood that online and social media platforms were not the only way to sell clothes. To introduce their online store to their potential customers, they used social media to promote a runway fashion show in a bar in New York City. They attracted customers and got the media attention they were hoping for. During the first year, they were interviewed by six fashion style blogs and five online fashion news e-zines (online magazines).

Up Close and Personal

The runway fashion show was a big hit. In addition, they rented a table at a one-day local street fair and sold enough clothes to cover the cost of the table rental fee. They were not pleased with the idea of selling at a street fair. They realized most of the shoppers were looking for bargains. Their line of clothes was far from bargain priced.

Allie and Jenny were invited to sell their clothes at a night market – an informal bazaar or street market held at night, usually featuring music and boutique vendors. The cost to rent a table to display their merchandise was $175 a night. They decided to display most of their clothing, but only sold accessories. Allie and Jenny knew that since there was no place to try on the clothes, they’d be better off just selling accessories.

They posted the event on Facebook and sent emails to their list of customers and prospects. More than 400 people attended the event. They made a small profit and more important met face-to-face with their target market.

Allie and Jenny are proud of their website. The feedback from friends and customers has been consistent: it’s bright; it shows off clothing in a clear way. The use of models helped potential customers see what the clothes look like on a person; and, the photography was creative.

Allie and Jenny have two long-term goals for their business. The first goal is to open a brick and mortar store in New York City. The second goal is to design their own line of clothes and sell them wholesale to retail stores. Good luck, Allie and Jenny!

Lessons Learned from Beth, Allie, and Jenny:

  • Beth, Allie and Jenny had a clear vision of what they wanted before they started doing business.
  • They started small and slowly increased their product line.
  • They had a clear understanding of the purchasing habits of their respective markets and made the buying process as easy as possible. Remember, a key selling point Beth used was to make sure her customers knew she accepted American Express.
  • They are continually looking for and purchasing new styles, which fit their respective markets.
  • They knew that in order to keep their eye on the market, they had to communicate regularly with their strategic relationships. Allie and Jenny via social media and Beth via word-of-mouth and personal connections.


As of this writing, it’s still the best of times for the two clothiers.

 

Business Relationship Destroyer #2: Taking Things Personally

I had an appointment with a new coaching client at 1:00 p.m. at my office. The client confirmed his appointment via email the day before. At 1:00 p.m. he was not there; at 1:15 p.m. he was not there. At 1:25 p.m. I called his cell phone. The call went directly into voice mail. By the way, this incident took place before the advent of text messaging.

I said to myself, “This guy is not coming. What did I say to him that would make him change his mind about meeting me? I ruminated about all possible things I said to turn him off. Emotionally, I beat myself up good.

So, what happened next? To my surprise, he arrived at 1:30 p.m. I wrote down the wrong time in my calendar. I was exhausted after the session and my exhaustion was not based on what we accomplished. I was quick to blame myself for things that had nothing to do with me.

If you read self-help books that give advice on how not to take things personally, the usual clichéd suggestion is: “Don’t take things personally!” This is the most ridiculous thing I ever heard. How do you do that? We are not computers that can be instantaneously switched off so we don’t take things personally.

I’m not suggesting that you drop everything and make an appointment with a psychotherapist to explore why you take things personally. I am suggesting that you consider the following:

  1. Acknowledge that some part of you does take things personally. A part of you – not all of you. This part of you is not all encompassing.
  1. The part of you that takes things personally is not necessarily bad. It’s not a deficit in your personality.
  1. There are other parts of you that are confident, compassionate, and accepting. Keep these parts in mind.

 

For more tips on how to build profitable business relationships, read Critical Connections.

Giving Advice vs. Listening

Food For Thought:

People love to give advice. When someone gives you advice, the advice they give is most likely about what they need rather than what you need.

Recently, I sent a secure email to my doctor’s office asking for a call back so I could discuss the details about whether I need to get a new prescription since my current prescription’s refills ran out. After three days, I did not hear back from anyone from the doctor’s office. So, I called the office and demanded to talk to the administrator of the practice.

When I told the administrator about my frustration, she listened to my entire story and then profusely apologized. She then asked me about what was the best way to reach me. I said email. She said that she would put a note on in my electronic medial record reminding staff members to email me non-medical information.

At the end of this conversation, I felt listened to and had more confidence about the practice’s ability to respond to me.

Let’s try something:

  1. Briefly write down a dissatisfaction or frustration of a customer/client. Use either a real example or make one up.
  1. Next, write down three open-ended questions you might ask that dissatisfied customer. Do not ask a question that requires a “yes” or “no” answer. These questions should focus on what customer needs were not met.

Don’t under-estimate the power of asking questions. Asking questions:

  • Takes the pressure off of you to immediately solve the problem or give advice
  • Gives you time to think rather than react
  • Lets the customer know you are interested in him/her

Here are the three steps to help your enhance your business relation with a dissatisfied customer:.

  1. Listen to the complaint
  2. Emphasize with customer’s frustration
  3. Ask how you can meet their needs

I hope you do not have any dissatisfied customers. If you do, be prepared to listen, emphasize and ask a question. Read about how to be a good listener in Critical Connections.

Listening is a positive act. You have to put yourself out to do it.

-David Hockney