aka. What it takes to succeed in today's new market place as you watch everyone else fail.
The world economy has hit the skids, and is now in the process of a stuttering, sputtering, restart. There are 7 secrets to being the last man standing. These are the "pearls of wisdom" that will help ensure that you stand triumphant over the war field that is competition in the New Economy.
1. The power has returned to the customer's hand, and they know it.
Your customer has a wallet full of reasons to put you out of business. You, however, see that they have a wallet full of reasons to keep you in business. The era of transactional business is done. Understanding that you are fighting to win every dollar they spend with you is half the battle. From now on, be thankful, and show it. Your business will increase instantly.
The fact that you're at war with your competitors doesn't mean that you need to live in scarcity, constantly scrimping and saving. This doesn't mean that you should become cheap and pre-occupied with pricing and market levels.
In fact, it means quite the opposite. You must live and operate your business in abundance: being generous with your time, and giving with your attitude. Start writing thank you notes to your customers. Make sure that you ditch the bottom 20% of your customers that will never be satisfied. They will be a cancer on your time, which should be spent making your existing GOOD customers even more loyal than they are now.
Make sure the customer understands that you understand they have all the power, and ensure that they know you appreciate them.
2. Mediocrity and poor customer service are no longer tolerated.
Because the power has returned to the consumer, you no longer have the margin of error you've been relying on. You can't afford to miss an email or drop a ticket.
Communicate with your customers. No one goes home until every phone call and email has been returned. Even if you are too busy to get to a customer right now, make sure that you call them to let them know that you're busy, they are important, and that you want to setup a time when they will get your firms full, undivided attention. Don't give them an opportunity to Google your competitor. Set up expectations of when they will get service, and then follow through. You cannot cancel on them, so make sure you that you operate your calendar properly. If you are not running CRM, buy one. Period.
3. Concierge has now become standard
You are now personally in charge of being personal. Call your customers ahead of time. Pro-actively contact them and ASK if they need anything. Do this on a weekly or monthly basis. Send surveys (done by 3rd party so anonymity is kept).
Concierge is the process of rolling out a red carpet. It is the idea and vision that a customer has of being greeted as "Good morning Mr. Smith. I have prepared your favorite cup of coffee, and it is ready for you."
Concierge is an attitude, and the projection of wealth and abundance. It is the process of giving to others before you take. Be generous with your time. Take extra special care of them. The ROI on concierge is 10 fold.
4. The death-grip on money has been loosened, but is no longer care free
The era of large "surprise" invoices is gone. The era of large expenses is gone. The era of customers throwing money at problems to solve them is gone. While customers have started writing checks again, they have not really started writing large ones without forethought. It will probably be 7-10 years before that happens again.
There will be no huge influx of large purchases anymore. The good news, however, is that the same forces that carved out the grand canyon, will work in your business: plan your client's purchases. Give them advance warning about upgrades, service appointments, and software purchases.
Plan the purchase with the customer 3-6 months in advance. Follow up with them on it. Let them budget for it, and when it's time, ask for the sale.
Small plans combined with small reminders will slowly chip away at the 800 pound block of fear that lies between you and the sale. You must approach it as drops of water approach the bolder, slowly, methodically, and non-invasively.
5. Quit Complaining. Everyone is tired of hearing about it
No one is interested in your problems. They are interested in solving their own. No business owner who will survive this new age of the markets is complaining about the economy. If you have problems, find a way to fix them. If you can't fix them, excise them, like the tumor they are, from your business. That may mean firing staff, selling the company car for a cheaper one, moving into a smaller office space, or doing what is necessary to "right the ship."
The recession may have won a few battles here and there, but you will win the war. Plan strategically, make your marches, and move in for the kill (er... sale).
But above all else, stop complaining.
6. Free is the new black
If you're not handing out free stuff, you're losing the fight. Lose enough fights, and you'll be surrendering. Here's the trick with the free stuff: find out what your competitors are doing to separate themselves from the competition, and give it away for free. Use the word free as your secret weapon. And I am not talking about free consultations, free quotes, or other things that are "free opportunities for me to sell you."
Of course, you should be giving those away for free too, but I am talking about things like copies of MS Office, laptops, computers, iPhones, iPads (the current favorite). Obviously, you have to make the math work, but how incredible would it be for you as a company to offer free anti-virus for all your customers? Not only do you have everyone standardized on the platform of AV that you love, but they become a set of Golden handcuffs. Clients will stay with you for the perks as well as the performance.
And the best part is... no one else is doing it.
Remember, "free" is the component of a value added service that makes it "value added." The concept is to find something you can acquire for relatively little, but that has a high perceived value to the client. Then, add that into the service. For instance, just for being my client, I may randomly send you an iPad. That iPad wasn't "free" in real life. The client paid for it, but it wasn't something they paid for overtly. Instead, it is part of my 2% rewards program for clients. I save 2% of the gross revenue from any given client, and put it in a slush fund for that client, and use those funds to send them gifts, special packages, and in some circumstances, send them on Cruises and vacations (if they spend enough).
The client perceives it as "free." Even those clients who are quick enough to understand that they did, end the end, pay for it perceive it as a good thing because no one else treats them as well as I do.
Subsequently, the lifetime value of this client skyrockets with very few and infrequent "maintenance fees."
After you've voted this article as helpful, read mark_wills excellent article The Importance of Value in Business
to get an even better, more in depth, understanding on winning the price war with value.
7. Recurring revenue is the secret to stability
There were only two companies that survived the great recession without taking any kind of hits to their profit centers. The completely focused on price competitors, and the recurring revenue competitors. Both have their advantages; however, the latter is the king of cash and profits.
When you're entirely focused on price, you're setting yourself up to lose because of two factors:
1. There can only be one cheapest, and sorry to say that it's probably not you. (Nor should it be).
2. There is always someone else out there willing to give it away cheaper... or for free. (See point #6 above).
So your focus must return to recurring revenue. Smaller amounts of money that REALLY pile up over time. It gives you ample opportunity to add value. A year ago, I coached a client with an IT firm to change his payment model to contract based, recurring revenue. This year, he made a $10,000+ plus sale in addition to the recurring revenue BECAUSE of the recurring revenue. Here's how we did it:
Using point #1, we catered to the client like they were the only one.
Using point #2, we pro-actively took care of issues for the client because...well... we had a contract with them, and we made sure they were receiving value for it.
Using point #3, we found out that they had concerns regarding their version of the OS (Windows XP) and their version of Office (2003).
Using point #4, we told them in January of 2010 that come summer of 2010, they were going to need to do an upgrade to stay current with Windows 7 and Windows 2010. They had, after all, skipped Office 2007 and Vista.
Using point #5, we showed no signs of weakness, never complained about them, but rather only spoke of opportunities that were arising in the new economy, which gave the customer themselves a breath of fresh air and increased our credibility.
Using point #6, we did free lunch and learns for the staff to train them for the upgrade, and get the staff used to the idea of the upgrade. We provided lunch, which really scored points.
and all along, because we've been using point #7, they had been "buying" more hours than they had been "using" so when it came time to say "The system is going to run you $10,000+" the client's only had one question: "How much in labor?"
Because they had been paying for more time than they were using, they had hours banked, and we were able to tell them: "Nothing. It's included."
To which they said: "Where do I sign and when do you need the check by?"
When, in the last 18 months, have you been able to walk into a client's office, ask for $10,000, answer only ONE question, and walk out with the check for the $10,000?
My coaching client did it 5 times last month. That's $50,000 for 5 visits each lasting about 15 minutes.
Simple. Methodical. Diabolical. Profitable. Everybody wins, and everybody's happy. You just can't beat that.