Customer Care Equals Customer Loyalty
In the old days, BS and BI, (before Sam - Walton that is - and before Internet), commodities were corn and soybeans and wheat - stuff like that. If you sold tires, toasters, or Torino's, your products had to be priced competitively, but the competition, their products, and their pricing, were not that much different from yours.
Something else that was characteristic of the "old days" was good customer service. Whether you were at K-Mart or Karrie's Korner Kitchen, good service prevailed because good gross profit margins were possible. With a decent margin, companies large and small could afford to hire enough people and invest in training.
Then Things Changed
Sam started expanding his Wal-Marts, which seemed to spawn dozens of other big box companies, and like today's SUVs, the "boxes" got bigger and more grotesque every year. The "bigger is better" phenomenon aligned with international trade agreements, increased productivity, and new technology to actually deflate prices.
One more thing happened: Service went to-hell-in-a-hand basket.
Don't Play The Commodity Game
Virtually everything in the marketplace today is a commodity: Kumquats, computers, cars, you name it. Is there ANYTHING you need that can't be bought like a bushel of corn? No frills, rock-bottom prices and dropping (except for vehicles), and like a bushel of corn, low profit margin. But don't forget this: low margin begets low training, which begets low service.
With so many commodities and such low prices (and margins), the challenge for small business is establishing and maintaining a competitive edge that includes viability and acceptable margins. What does it look like? Here are three things it's not:
1. Forget price.
Small business can't compete on price, because the Big Boxes can SELL tires, TVs, and tools cheaper than you can BUY them at your vendor's highest discount. So, on the price issue, the good news is that decision has already been made for you. FORGET PRICE! You will not win the price war, so don't go there!
2. Forget Location.
You probably can't compete on location, because the Grotesque Guys paid way too much for that corner with the most traffic. Your model won't need the corner anyway. Your model will make it cool to drive a couple of blocks.
3. Forget Advertising.
You can't out-advertise the Big Boxes because, in the world of advertising, they're a tuba and you're a piccolo. I'm not saying don't advertise. I'm saying focus on the customers who like the sweet sounds of a piccolo, and forget about the ones with the tin ear.
Dumb Is Cool
Hush Puppies (the shoes, not the fried morsels you eat with fish) had an ad campaign once that focused on how "dumb" their shoes were. It was one of those reverse logic, "nerds are cool" kind of campaigns, and it worked. They even had a jingle that went, "Hush Puppies are du-u-umb!".
But the TV commercial I remember most had two Japanese engineers holding a Hush Puppy shoe, and one of them said, "We can make it cheaper, but we can't make it dumber." Being dumb was that company's hook, and as the ad convinced you, their level of dumbness could not be replicated. The other message they drove home was that dumb was worth the price. Hush Puppies sold a lot of shoes with that campaign, and at a premium price (and margin).
That's what small business owners MUST to do today to gain a competitive advantage. We've got to be "dumber" than the big guys. We've got to find that "hook" that cannot be replicated by our competitors. Especially the big ones. Maybe we can get Hughie Lewis to sing "It's hip to buy small".
The Hook: TWBCC
Small business' hook must be service. Service your customers within an inch of their lives. Let's resurrect some of that yesteryear high quality service. I just created a new term and acronym: The World's Best Customer Care (TWBCC).
Can't say customer service anymore. Our friend and Brain Trust member, JoAnna Brandi, customer care expert and author of Winning At Customer Retention, says we should say "customer care." JoAnna says customer service sounds like the place you go when your purchase is defective and you want a refund. She says customer care is what you do to create the one thing that is essential to small business survival: customer loyalty; which is the one thing that, when established, will deliver two other small business essentials: 1) repeat customers, 2) acceptable profit margins.
Customer Loyalty Strategy
JoAnna says we should develop a Loyalty Strategy. Since we don't have price, location, or a tuba, we must earn the loyalty of our customers. Here are some of the components of a good Customer Loyalty Strategy (CLS):
1. Don't sell yourself or your stuff short. Price your products and services at a level that will insure that you not only stay in business and prosper, but that you also can afford to fund your hook, TWBCC. TWBCC costs money. If you could provide TWBCC on low margins the Grotesque Guys would be doing it!
2. Hire people with good attitudes. If someone interviews with you and they don't demonstrate a reasonable level of energy and positive attitude, let them go to work for one of the big guys. I'll take a good attitude and intelligence over experience with a marginal attitude EVERY day. Small business can't afford whiners, complainers, pettiness, and bad attitudes. Grrrrr. I hate bad attitudes. Bad attitudes DO NOT = customer loyalty.
3. Train your people. Do it yourself or hire professionals, I don't care. But don't say you can't afford it! Remember #1 (above). It's an investment.
4. Foster leadership. JoAnna says leadership is the key to creating customer loyalty. If you do 1, 2, & 3, you will have acquired some pretty special people. But don't just turn them loose with the product-of-the-month; give them the authority to be leaders. The reason new customers ask to see the owner of a small company is because they want to deal with someone in charge. Your goal is for your customers to think that all of your employees are in charge.
One last thing on leadership: You must be the first leader. I learned in the military that the private's attitude pretty much resembles the general's. Weenies create weenies. Your leadership will create leaders. Leadership = loyalty, from customers and employees.
5. Grow entrepreneurs. You don't have to be an owner to be an entrepreneur. EVERY employee you have can be an entrepreneur in their assignment. If you make them feel that they have the authority to take initiative, and if you have completed the first four items, you will have created the fertile soil needed to grow entrepreneurs. It's a beautiful thing.
6. Be patient.
If this were easy monkeys would be doing it. It's kind of like the three pigs (pardon the mixed metaphors): Build your CLS one brick at a time and those mean old Wal-Wolves can't blow your business down and eat you.
The Payoff: CLS = TWBCC
Here's the picture: If you have a CLS, when your customers need something you sell, instead of the product or service popping into their head, your company name, your logo, or even better, the face of one of your leaders will pop up. With that image, the price becomes a distant third after peace of mind, and problem solved.
Now you be the customer and answer these questions. How much extra time do you have today? Do you need things, or do you need solutions. How much is it worth to you for someone to solve your problems? How loyal are you to your problem solvers?
There are LOTS of other people out there like you, and their loyalty is looking for a place to live.
Write this on a rock... Leaders solve problems. Make sure your customers see your people as leaders. If they do, customer loyalty becomes a reality, and price becomes a tertiary consideration. You will own your niche, Big Box will have its niche, God will be in his heaven, all will be right with the world, and dollars will come and play in your backyard.
Have you seen my Hush Puppies?
