A Lesson in Customer Experience

Filed Under (Uncategorized) by Don on 27-06-2007

In our world of low-ball pricing, contracts, bids, RFQ’s and loss leader/low margin catalogs is it even possible that any kind of business can demonstrate success with total disregard to what the end-user or consumer has to pay?  We work our collective tails off to give our customers a unique and pleasurable customer experience while at the same time cutting our margins to levels that keep CEO’s and owners up all through the night wondering why.  Well let me share a story about a restaurant in Colombia.  Have you ever heard of a place called Andrés Carne de Res? You probably haven’t because it’s in a little town called Chía in the outskirts of Colombia’s capital, Bogotá.  Right now you’re probably thinking what in the blazes does some out-of-the-way restaurant in South America have to tell me about business, right?  Well, let’s dig a little deeper, who knows, you may actually find a few pearls of wisdom!

Andrés Carne de Res (“Andrés”) is difficult to translate, but for reference, in Spanish it sounds something like Jake’s Porterhouse Steaks.  This ‘little’ restaurant serves over 7500 people in a weekend alone and his business does over $1.5M per month in sales.  They have 700 servers and customers routinely wait over 30 minutes in line to sit in otherwise very uncomfortable wooden chairs.  The prices are as high as they can make them but the customers never complain.  You see, they come for the experience!  Andrés Jaramillo, the owner, has a very peculiar business philosophy when it comes to a customer experience.  People will drive 30-45 minutes just to get there and are so excited to get in that by not making it easy to get in adds to the anxiety and excitement of what awaits them when they finally get seated. 

The customers are directed down a very long, narrow corridor and are treated with a variety of sensory experiences that add to the anxiety of what is to come.  The owner has created a unique dimension of sight, smell, and sounds that offer such an experience that the customers can’t get enough!  Of course the food is exquisite, the service outstanding and the presentation is impeccable.  Our U.S restaurants work on the premise of quality, food, price and service.  But what has happened to the “experience?”  Isn’t it the experience that keeps you longing to come back?  Isn’t it the experience that you remember and your mind tells you to go back for more no matter what the cost is?

A few years ago my wife and I were on a trip to Las Vegas and visited a restaurant called “The All American Bar & Grill” located inside the Rio Suite Hotel & Casino.  They featured a number of excellent quality prime cuts of aged beef.  We’re talking some serious steak.  Top of the list was a huge 24 ounce filet.  The kitchen was in the middle of the restaurant and enclosed in glass.  They cooked the steaks over an open mesquite grill.  The sights and smell of that place is as vivid in my mind now as it was when I sat there 10 years ago.  The service was outstanding, the steak was perfect and of course I had the best company anyone could ask for, my wonderful wife to whom I have now been blessed with for over 27 years!   It was an ‘experience’ I would gladly pay any price to enjoy again. 

Have you figured it out yet?  You’ve got to be different.  You must change the way you think about doing business.  Be creative and be willing to take a chance on doing something that will create such a unique experience in your customers mind that price won’t be the objection any longer.  Price is just an excuse!  Wow them with your uniqueness, be different, give them something more than the single-dimension experience of internet ordering.  A little-known place like Andrés in the middle of Colombia is driving innovation because they design their service around what’s meaningful to people.   What does it mean to do business with you?

Big Box News Update

Filed Under (The Competition) by Don on 22-06-2007

The latest profit figures show that Staples is still the big dog among the power players showing a healthy 8% growth in sales during the first quarter of 2007.  Office Depot comes in at 3% and Office Max only gained 0.5%.  I think someone needs to put poor Max out of his misery.  They have lost their most valuable sales employees and continue to show unhealthy signs of mismanagement and poor decision  making.

Retailers can’t seem to understand the relationship selling skills required to retain and develop customers.  I guess that’s what you get when your retail stores typically employ people who are only interested in doing what is basically necessary to get their paycheck.  These stores focus on the “shopping experiences” (transactional selling) and don’t take time to know their customers. 

Office Depot got burned with the “Stupid” sticker last year when they purchased Allied Office in New Jersey.  Allied was the #2 US dealer with over $350m in sales.  Typical “Stupid” immediately closed the customer service functions and that caused a mass exit of the sales force much to the delight of many regional dealers who gladly took their sales and customer service people into their employ.  Not a brilliant move when these morons let the best part of their purchase walk out the door due to the “Stupid” sticker.  The end result was a net gain of maybe $150m in sales but probably much less.  I wonder who the brainiac was that made that decision?  Then OD closes the Viking brand in the US.  The Viking brand in Europe is a powerful contender.  I’ll bet the “Stupid” sticker will show it’s ugly head again and OD will end Viking in Europe.  Bad moves people.  Short term gain but long term loss.  If it isn’t broke don’t fix it!  You don’t see Staples closing Quill do you?  Nay!  They (Staples) continue to build and enhance the Quill brand.  Quill will continue to be highly successful for Staples although as a competitor it is easy to sell against them when they charge customers $54/carton for copier paper.  Maybe Depot should be courting a purchase of Office Max, that would put a smile on the faces of many Max shareholders.

Will these ‘players’ ever learn that if they would just focus on providing great customer service and build those customer relationships that their shareholders would eventually reap huge rewards?  Duh!  I doubt it.  So the advantage goes to… the Independent Dealer! 

Corporate Express showed only a 3.6% growth in sales.  Rumors persist that CorpEx is looking for a buyer.  Office Depot is said to be looking them over but will have to pay up considerable dollars.  CorpEx last year decided to focus on “operational excellence” which means cut costs, everywhere.  That’s just corporate speak for “let’s BS the shareholders and public some more!”  At the expense of reducing management, yet another internal reorganization and loss of an effective outside sales force they have completely forgotton how to service the customer.  Therein is the biggest looser here, the customer.  This loss of effective customer service resulted in a 7% loss in sales in the fourth quarter of ’06. 

Does your web site stink?

Filed Under (Uncategorized) by Don on 18-06-2007

I try not to rant and I really try not to get an “attitude” about things but after browsing around at some office dealers web sites I’m getting really irritated.  I have to say that some of these sites just plain stink!  I won’t name sites specifically because if I think your site sucks I would be a lot happier about it if I could just call you and tell you that very fact.  Look people, this isn’t rocket science.  Your home page is a direct reflection of your business.  Your site is your company’s personification of it’s ideals, attitude toward its customers, and purpose.  Your site must be more than just a place to buy product.  You have about one or two minutes to get the web site visitor’s attention.  You have to be engaging, informative and creative.  Yes, you have to sell your products but that comes second to your ability to engage and capture their attention.  This same concept can be used for your site also and like I said, it isn’t very difficult. 

If I’m a prospective customer visiting your site and all I see is your company name and a link to place online orders and no more then I have not been engaged.  How am I supposed to know what your delivery policies are or what other types of products and services you offer.  Why should I buy from you?  You don’t have to spend thousands of dollars to create an interesting web presence and it doesn’t take a lot of work to keep it fresh and up to date.  There are some great software programs available such as Dreamweaver and Frontpage plus many others that are loaded with features and valuable tools.  In my experience I prefer the Dreamweaver package but that is just my opinion.  The point is that you take the time to create a web site that serves a purpose beyond just an entry portal to your ordering page. 

Here are some ideas to help you on your way.

  1. Create an easy to use navigation structure
  2. Include an About Us page, use staff photos if possible.  Let people see who you are and who they will be speaking to if they call your office.
  3. Use testimonials whenever possible
  4. Include product information and pictures, especially regarding new products
  5. Tell them why they should do business with you!
  6. Educate them on your products and services
  7. Make it professional, not hokey.  Use humor but don’t be offensive
  8. Present information about your company’s local community involvement
  9. Present products that have positive impact on issues such as identity theft, office organization, creating a earth friendly work space, etc.
  10. Utilize information you get from your direct buy vendors and your wholesalers.  They are a wealth of information and welcome their products to be featured on your site!

That is just the beginning but it offers some excellent starting points to consider for your site.  If you’re intimidated and don’t think you can accomplish the look and feel for your site you desire, then email me and let’s talk about your needs and how we can make it happen for you.  It’s easier and less expensive than you think!

The Complacency Factor

Filed Under (Uncategorized) by Don on 13-06-2007

Graham Hill in his very informative blog referenced a paper by Kim & Mauborgne titled Value Innovation.   An interesting point was raised in the paper that I believe is a real issue confronting many dealers and reps today.  That issue is what I refer to as the complacency factor.  I have observed companies and especially reps come to a point where they are very complacent in their surroundings.  Their daily work schedule and earnings have come to a place where they are comfortable.  They can do a minimum amount of work and maintain their earnings without regard to attrition and the stress that prospecting brings.  The end result is they lack growth and therefore the company doesn’t grow either.  This “ho-hum” attitude needs to be recognized early on and dealt with immediately.  I understand how easy it can be to fall into this trap of complacency but I can assure you that the only outcome will be lost margins and revenues that will sneak up on you faster than a sunburn at the beach.  If you are not cautious in this area you will have lost valuable business amounting to tens of thousands of dollars in lost revenues and you will have a panic attack trying to figure out how to replace those lost sales.  Attrition is a reality that you cannot ignore.  It takes time and diligence to bring on new business yet it takes only moments to lose an account. 

I can attest to this factor myself.  Many years ago I had a large account that did over $38K per month with me and I enjoyed a healthy 36% margin.  I spent a lot of time in the account an soon began to ignore my smaller accounts.  My sales still grew but only due to the increased spending of this one large account.  If I had paid attention I would have seen in my reports that I was losing three to five smaller customers every month due to my own negligence.  One day my large account made a surprise announcement that they had been purchased by an out of state competitor.  Guess what happened.  Within two months I lost the account and a very considerable amount of income for myself and my company.  After the shock wore off it didn’t take long for me to see the damage I had done to my customer base.  It took me nearly two years to recover those lost sales and replace that business.  My customers were very honest with me and said they quit buying because they never saw me any longer.  I salvaged a few of them but the better ones never returned because they found someone to fill the void I left when I got complacent. 

You may think that your relationship with your customers will save you from such losses.  Don’t be so arrogant as to think that your competition isn’t in there every week trying to take the business from you!  Those relationships have to be nurtured and you must constantly be introducing new products and services to your customers and educate them on the value of doing business with you and your company.  People still prefer to associate a face with the company they do business with.  We marketers can get caught up in thinking that we can communicate with everyone by e-mail, snail-mail or on the web.  However the most successful businesses know that it is the human touch that stands out in the crowd.  This personal touch is where you find the highest margins and the most satisfied customers.  These are customers that you have educated on the who, what, where, when, how and why to do business with you and your company. 

If you’re that comfortable then go ahead an retire!  What’s your opinion?  Have you gotten so complacent that you have forgotten how to prospect?

Sincerity counts

Filed Under (Uncategorized) by Don on 07-06-2007

My first experience in business was in 1978.  I had just finished high school and I had a long summer break before entering college.  I grew up in a small town so there were not a lot of summer jobs available and “burger flipper” wasn’t an option for me.  :) I owned a cool-looking ’77 Olds Cutlass and I loved to spend time detailing my ride.  So much in fact that I thought, “Hey, I could do this for other people!”  I knew the manager of a local automatic car wash and asked him for the name of his supplies distributor which he gladly gave me.  I contacted them, got prices of the necessary supplies I needed and placed my first order.  Now at this point I didn’t even have my first customer but I was so confident and loved what I was doing so much I didn’t give it a second thought.

When I got back home another thought occurred to me.  “I’ll bet the banks repossess cars and want them detailed before they take them to market!”  With that in mind I put on my Sunday shirt and tie, (Dad taught me how to tie a necktie at an early age!) I went back to town and called on five banks and credit unions.  To my surprise I was able to get four of the five firms I called on to do business with me.  Remember now, I’m fresh out of high school and other than driving a school bus I had never worked for anyone outside of working on our family farm.

My new customers provided me with 8 cars to detail my first week.  I had to drive back to town, about 10-15 miles one-way and pick these vehicles up and drive them back to my house and do the work there.  These companies didn’t know me yet they entrusted me to drive their cars and trucks back to my house and do the work and return them safely when finished.  By the second month I was averaging 10-15 cars and trucks each week which was about all I could handle.  It was a lot of work, especially in the hot summer months but I enjoyed what I was doing, I did an excellent job on every vehicle and always made sure my customers were happy.  I even gave the managers a free detail for their personal cars each month to show my gratitude.  When the summer ended they were sad to see me leave for college but wished me well.

What does this have to do with office supplies?  Everything!  You see I made a cold call on a prospect and offered them a service they didn’t realize they needed.  I gave them a fair price and guaranteed my work to their satisfaction.  I was honest and sincere and expressed my gratitude in a personal way by doing something nice for them personally.  This is the framework for any successful person or business.  If you’re in sales you want to be sincere and honest, always.  If you are the business owner you want to be fair and just, always doing what is right for the customer no matter what the cost.  You need to show your appreciation for your customers’ business in a manner that expresses your sincerest gratitude.  More than anything customers want to be appreciated, just like employees.  What a concept!  Sincerity, honesty, gratitude, earnestness and heartfelt emotions to the people that matter most in your life, personally and professionally.  Too bad hugs are not allowed.

When Free Isn’t Always Free

Filed Under (Uncategorized) by Don on 03-06-2007

Get it free, try it free, free seminar, free assessment, free workshop, is all that stuff really free? If it is then why doesn’t everyone take the free stuff? Even though you may think that it’s a great deal, corporate decision makers don’t. They’re not stupid. They know there’s no such thing as a free lunch. Anything that is free usually requires one of two things; an investment in time, or a decision that ultimately requires time.

That’s why free isn’t selling these days. People don’t have extra time to waste. Either something is worth doing or it’s not. Free is entirely irrelevant. It is easy to say “get this widget free if you buy so-and-so” but consumers are smart enough to know that the cost of this so called free product is being paid for by someone, somewhere and somehow. The cost is included either in the cost of goods sold or is added back into the cost of the product(s) they are buying. Your parents were wise when they told you early on that there is no free lunch. They knew without a doubt that nothing comes without a cost and time is the one constant we can not put a price on. If you are purchasing products from a company that makes bold claims about all the free stuff you get just for doing business with them ask yourself, how are they paying for this? Also, what is the true value of the free product? If their prices and service are so great then why should they need to give away free products? Giving away free product samples in order to get you to buy the product is one thing but giving away, let’s say a food item, as a freebie for making a purchase seems a little peculiar. Bottom line is where’s the catch? When you stay at a motel and they advertise free internet access is it really free? Of course not! It is included in the price of your room rate so whether you use the internet or not you are forced to pay for it in the cost of your room.

Consider also the quality of the services and support you get from the company. Great customer service carries a much higher value just like relationships. You should focus on the business value. Decision makers know that unless it will reduce costs, increase productivity, shorten time-to-revenue or such, the product isn’t really free. Experienced business people also know that the free products cost is hidden either in the true value of the free product or in the price they pay for other products. They understand the business value of the relationship they have with companies and how that value supersedes a can of pretzels or some other gimmick.

Great service, knowledgeable staff, extensive product and/or service offerings is what defines the real value of doing business with a company, not the pretzels.