Maintaining Customer Loyalty: why you need to be attentive to stay retentive!

At a basic level in business you need to do two things to survive: attract new customers and retain the ones you already have. When competition is fierce and markets are shrinking the latter becomes doubly important and because it is estimated that it costs 4 times more to attract a new customer than retain one it makes economic sense as well to build customer loyalty and keep them happy.

However, judging by the examples of poor service I have witnessed recently, some companies have so many customers and apparently limitless pools of new prospects to draw upon that they don’t need to hang on to the ones they have by wasting their time on meeting an acceptable standard of customer care. What a lucky position to be in eh?

How To Lose Your Customers

The first such example is a national chain of health clubs (closely linked to a Dragon!). A friend of mine is a member of the club and has been unable to use the facilities due to undergoing treatment for cancer. She wrote to the manager, with a sick note, to explain and see whether it was possible to receive a refund for the last 3 months when she had been too ill to attend and to put her membership on hold until she was well enough to come back. The answer came back – NO. Upset by their lack of compassion she responded by saying it made her inclined to cancel her membership. Did this make the powers that be question their decision on an ethical level? Did the risk of losing a member make them reconsider on a business level? No. Their response was to charge her £75 for cancelling her membership early. And for that reason, she was OUT!  It seems this so-called ‘health’ club is neither concerned about the health of its members or the health of its long term business. Shocking. (As a former member, I receive flyers and calls from this same club on a regular basis with offers to re-join so clearly they don’t have so many members that they don’t need any more).

Another example is a courier company who were tasked with the job of delivering something to me. This did not seem like too much to ask from a delivery company but it seems my expectations were too high. This formerly 3 lettered courier that now goes by a name akin to an Austrian singing technique failed to deliver my parcel. While this was disappointing these things happen; I am not at home 24 hours a day and so I can accept this. However, trying to track the parcel and get it re-delivered has proved to be difficult, time consuming and extremely frustrating because they have made it as hard as they can for customers to do this. Firstly they never left a card to say they’d tried to deliver, I only know through tracking it online. Secondly they don’t publish a number to call on their online tracking site, I had to ring several to find the right one and thirdly they don’t feature enough  tracking details online to be able to use their automated system. After calling them all week and being promised that it was on the van and due for delivery every day I was eventually informed that it had been returned to the sender. In America. Not much use when it was intended to be given as a birthday present the following day. The only advice they could give me at that point was to ask the sender to return it and gave me an e-mail address that I could forward a complaint to. The e-mail bounced back because it was an invalid address.

There are two issues here. Number one is ‘get it right’. Number two is if you can’t get it right, and sometimes things do happen, then deal with the problem efficiently and demonstrate that you actually value your customers. Both of these so-called leading companies failed to do this and therefore they don’t deserve to retain their customers’ loyalty.

How To Keep Your Customers

A great example of good service is from Asda (credit where it’s due). I regularly order my groceries online (hey, I am a busy working mum!) and one time I received multiples of several items that I had ordered, far more than I thought I had ordered (eg 6 multi packs of the same crisps!). It could have been a website glitch or it could have been my error but I told them about it and they refunded the cost of all the extra items without asking me to return them. They evidently recognised the long term value of my business and extended a gesture of goodwill without hesitation. Now that is what I call good service and I still continue to use them every week (and we all know the cost of a weekly shop for a family of four – no small change!).

Creating Great Customer Experience

Customers are far more likely to complain about bad service than praise a provider for good service so the impact could spread wider than those few you lose. The moral of this story is don’t be complacent, give your customers a reason to keep using you and consider the long term benefit of keeping those customers happy. In other words, make customer loyalty a key part of your marketing strategy – a bird in the hand is worth 2 in the bush!

A Little Knowledge is a Dangerous Thing!

Forget writer’s block: a copywriter’s greatest affliction is the ‘expert-ego’!

The downside to writing copy for lots of different companies is the tendency to sub-consciously inflate your own sense of expertise, you could call it an ‘expert-ego’! What I mean by that is because you immerse yourself so deeply in the subject matter that you are writing about you actually start to believe that you are an expert in it, at least for the duration of the project! For example, at the moment I am writing about a legal firm, a provider of terms and conditions, an interior design practice and a glass wholesaler so having studied these areas in great detail for all of a few months I feel, in my mind, that I am a leading expert on the Groceries Supply Code, retention of title, spatial planning and Lacobel decorative glass!

Of course, despite my delusions to the contrary, I’m not. That said, it is part of a marketer/copywriter’s job to get under the skin of their clients very quickly and really learn about their business. Often people will ask me “how can you possibly write knowledgeably about all these different subjects that you have no prior experience of?”. The truth is you will never match the expertise of your client, even I do not fool myself into believing I could represent a wine producer in court or write a bespoke set of terms and conditions, but what I can do is soak up key facts very quickly, using the client as a source of knowledge.

Marketer, 38, WLTM Industry Expert for mutually fulfilling business relationship…

I bring my marketing skills and my understanding of how to communicate benefits and engage with people through the written word. The industry expertise I get from my client and from conducting research on the subject. It’s not actually necessary to understand the legal ins and outs of the Grocery Supply Code to formulate a clear picture of how a wine producer can use it to their advantage. I don’t have to be able to write terms and conditions to understand that the client needs to protect their business from customers defaulting on payment. In actual fact, many clients are too close to their business to be objective enough to write their own copy; it often takes an outsider to come in and really get to the heart of what their customers need to know from a website or a brochure or a blog post.

Marketer of all trades

In my time I’ve been an expert on plumbing, IT, offshore asset management, design, professional singles dating, aromatherapy and massage, hairdressing, reprographics, breakdown cover and holiday parks. If anyone mentions the words ‘asset protection structures’, ‘ground source heat pumps’ or ‘digital flexo plates’ I can talk for hours (I go down very well at parties as you can imagine!) and don’t even get me started on ‘stay-cationing’!

To be a successful copywriter you have to be able to get up to speed on a client’s business very quickly and take on enough knowledge to communicate their key messages in a way that is relevant to their audience. As dry as some of these subjects sound you can find something interesting in ANY business (no honestly, terms and conditions are actually fascinating!) because it’s all about finding out how they solve a problem for something. Some information I forget eventually, some I retain to regale friends with at dinner parties for ever more (I find I get invited to fewer of those as time goes on…) but all intrigue me while ever I’m in the thick of it.

Have I ever told you how innovative patterned glass can transform any domestic or commercial interior?…

Je Suis Fatigue de l’Apprentice

Can we really learn anything new from the Apprentice? Je dit NON!

Does anyone else have Apprentice fatigue or is it just me? (Perhaps just those of us who promised to post a blog on the subject every week? It did seem like a good idea at the time!). 7 weeks in it’s becoming clear that what we can learn about business from the programme boils down to a core of a few hard and fast rules that we can all benefit from applying. Unfortunately the candidates don’t seem to realise that and keep making the same mistakes time and time again! These rules are as follows:

1. Know your market and create your products and services with their needs in mind

2. Conduct, and act upon, market research

3. Recognise when to negotiate and how far you can go

4. Know your industry

5. Understand cost and value and that they are not always the same thing

6. The importance of planning

7. The importance of strong leadership and decision making

The mistakes of the losing team, generally speaking, boil down to a failure to stick to at least one of the rules above. This week Tom’s team broke rules 1, 2, 4 and 7 although Melody’s mistake was not so much failing to conduct market research but failing to conduct sufficiently representative market research (only speaking to 4 people, all of whom were in a train station and concluding that everybody in France travels exclusively by train!) and then deliberately feeding back misleading results to secure the product that she wanted!  Tom failed on Rule 7 but in his defence, had he railroaded every other member of his team into choosing a product that they didn’t like he would have been criticised for his dictatorial style of leadership so he couldn’t win (which seems appropriate for Tom!).

The winning team did so in such a spectacular style because they stuck to Rule 1. They knew in advance that they would be pitching to a massive retailer who was very well established in the family market and chose their product and targeted their pitch with this in mind. The result – an order worth over £200,000!

Of course, because of the way they edit the programme we never know who we’re supposed to be criticising and shaking our heads at until the end: whatever they’re doing could equally be defined as madness or genius – we only know which one to apply when we hear the result. Only at that point can we go back and say ‘yes I knew he/she was an idiot’ or ‘I said he/she was brilliant’. That is why the programme is so flawed from a business point of view and is in fact, [of course] just an entertainment show.

There, I said it. I realise that I promised to share with you lots of business tips and lessons from the Apprentice but I fear we may have learned all there is to learn from Lord Sugar and his cast of panto characters. I anticipate that the remainder of the run will just be a merry-go-round of breaking the 7 rules we already know about over and over again and using their own idiocy to play into the producers’ hands. I feel I’ve let you down in some way, promising the undeliverable. *sighs*

The Apprentice is not about business, it’s about entertainment and vive la difference!

It is for that reason that I’m out (sorry, confusing my BBC business shows there!). I am quitting the ‘Apprentice inspired blog’ business subject to them finding a new rule to break. I am in fact firing myself!

(Actually the things I did learn from this week were that you can get by in France by speaking like the policeman from Allo Allo – “good moaning” – and that scissor paper stone is a valid method of decision making – genius!). You know I love it really!

Fire me? Can we negotiate?

Jim engineers Glen’s demise in The Apprentice advertising sales task

So, Jim survived the chop. Again. He either truly has the luck of the Irish or he’s Lord Sugar’s secret love child and therefore untouchable. In my opinion he was clearly responsible for the failure of this week’s Apprentice task simply for his refusal to negotiate on rate card prices with the media buyers. Yes, the name of the magazine was awful and some of their content was a little patronising but overall all the media groups liked the concept and it was considered to be a high potential market. The same media group that was refused the discount spent £60,000 with the other team and their magazine was dire so it just shows what an opportunity they missed there.

The Art of Negotiation

The subject of negotiating on price isn’t straightforward. Personally I don’t ever do it. I don’t inflate the price to start with so that I have ‘wiggle room’ to reduce it if requested so I know it’s always a fair price for the services I’m offering. Negotiating on the quote therefore just de-values what you do. What I would do however, if what I’ve proposed does not fit the client’s budget, would be to find a different solution that does. In marketing there are always alternative strategies you can adopt and I offer a wide range of services so I can be flexible.

Pricing: Trade v End User

Media sales is of course a completely different proposition. I have been buying media space for clients for many years so perhaps I’m in a position of advantage but surely most would realise that the rate card is always subject to discount? In the absence of experience in the industry you should still realise that even if end user clients (the brands that are featuring in the adverts) paid rate card, the agencies who are buying on their behalf should at least get their agency commission to allow them to make a margin. Add to that the buying power and potential sales opportunity offered by such a large media group and surely that tells you to be generous with your discounts? Jim obviously realised his monumental error by offering a 50% reduction at his next pitch and that alone should have booked his place in the black cab. Evidently ‘Jedi Jim’ can not only control people’s minds but has some kind of impenetrable force field protecting his ass!

Unfair Dismissal

As for poor Glen, fired for being an engineer, surely Lord Sugar was aware of this before the process started? It’s a good job he’s not subject to employment law. What’s next? Firing Zoe because he’s just realised she’s a woman or Susan because she’s too short? Get me ACAS on the phone…

Where There Is Muck There Is Brass…

But only if you know how: the value of industry experience

As much as it pains me to say it I can’t pull any of the Apprentices apart today for their lack of business acumen and generally being morons (as I so love to do) because this week’s tasks was incredibly difficult and the fact that either of the teams made any profit at all is amazing really.

The difficulty lay in the fact that they were thrown into an industry where they had no experience and all the transferable business skills that they do have, while relevant, were simply no substitute for actual knowledge of this sector. Their task involved waste removal – finding waste that needed taking, assessing whether to charge for the service and if so, how much, identifying the waste that had value and could be sold, assessing how much it would cost to tip the non re-saleable waste, finding buyers for the waste that had a retail value and on top of that, the logistics of collecting and distributing that waste. Rather them than me!

High Risk Business Strategies

The candidates had little idea of the value of different materials other than a checklist and they were tasked with estimating the weight of items and identifying what they were. Being a TV show and not real life we all know of course that things are not fair and this was a perfect example. While Nick and Karen criticised Zoe and accusing her of ‘completely missing the point’ for attempting to charge to remove the waste from the two contracts lined up, the industry expert featured in the show and who appeared on The Apprentice: You’re Fired afterwards stated that in fact that was standard industry practice. It was only Team Logic’s high risk strategy of making no charge that resulted in Team Venture losing out. Had this risk not paid off (Venture won by just £6) I’m sure they would have being saying the exact same thing about them. I’m convinced that they film Nick and Karen both grimacing and nodding their heads over the shoulder of every business decision taken so that they can broadcast the appropriate one depending on the outcome!

The Importance of Cost and Value

So, what lessons can we learn (other than don’t attempt to take on industries we know nothing about!)? The key learning points here are the importance of understanding both cost and value and I was actually pleased that someone on The Apprentice (Melody) has finally recognised that time = money – halleluyah! Based on the usual profit and loss reporting in the boardroom you’d think that all people in business provide their services for free with profits simply calculated on a basic revenue minus cost basis with no inclusion of staff costs at all. Both teams also vastly underestimated the time it would take to logistically provide the service and how much this would necessarily limit their activities. Therefore:

● Understand all costs involved – including labour costs

● Know the value of things and estimate it accurately

● Be clear about logistics and plan your time, focusing on the most profitable activities

Selling a Service

These things not only apply to businesses trading tangible products but to service based businesses such as myself. If you are effectively selling time you have to know the value of that time to your clients in terms of the benefits to them, have a clear understanding of how long things take to deliver (underestimating time needed will seriously reduce your hourly rate) and recognise that using your time incurs a cost to your business – improving efficiency being a perfect example of ‘waste removal’! (Too cheesy? Sorry!)

Every Dog Has Its Day (But Only If They Listen To Their ‘Masters’)

More Small Business Lessons from The Apprentice. This week: Research

The advertising/marketing task is always a favourite of mine for obvious reasons and while this year didn’t deliver a ‘pants man’ level campaign to ridicule, it has to be said that both products and campaigns were pretty dire.

I actually thought the idea of the Catsize product was quite good, at least they identified a niche and a need in the market, but the ‘Show their light/show they’re light/you know what I mean they ARE light and they also HAVE light….’ Slogan was just awful: it conjured up weird images of floating, glowing cats with strange iridescent eyes. OK, just me then. Team Venture was only saved by the fact that as bad as their marketing was it was trumped by how ill thought out Team Logic’s core product was and let’s face it; if your product idea isn’t right and has no market then no amount of clever marketing will save it.

Having conducted market research and been informed, by industry experts AND consumers, that a single product for all dogs was not viable they listened carefully, took their comments on board and… created a single product for all dogs. It hardly seems necessary for me to go on.

The Value of Marketing Insight

The lesson here for us, and you don’t need to be a marketing expert to realise this, is a) conduct market research to make sure you identify a market and can create a product that meets their needs and b) LISTEN TO IT! The trap that many small businesses fall into, and this is largely to do with budget, is to fail to conduct proper research. It is therefore a cardinal sin to have done the right things – conducted proper research and have genuine industry insight – and then ignore it! Actually, not just ignore it but create something that directly contradicts it! *bangs head on desk*

Creating a Niche

I am aware that most of these small business lessons seem to be based on not making the same mistakes that the Apprentices make so to redress the balance and take something positive from the show we can learn from Team Venture and how they used market insight – the fact that over half the cat population of the UK is overweight – and created a product to meet a genuine need. It goes without saying that this needs to be the basis for any product or service: if you have no market you have no proposition.

Another lesson we can learn from Vincent is ‘choose your loyalties carefully’ – I have no doubt that Jim would not have afforded him the same courtesy!

Quote of the week: Lord Sugar “I don’t know about Team Logic, you should be branded Team Tragic”

Apprentice Buzzwords

Footnote: I am also enjoying the Apprentice buzz words (we get them every year – the overused pat phrases they come out with to make themselves sound business-like!). So far we have ‘I’ve taken your comments on board’ (translates as ‘your idea is rubbish’), ‘I’m taking a decision on that’ (translates as ‘I’m the boss, and your idea is rubbish’) and ‘I have serious reservations about that’ (translates as ‘I’m hedging my bets for the boardroom in case it turns out to be wrong, and your idea is rubbish’). Keep listening out for these and any new ones that start to crop up over the next few weeks!