197 Surefire Customer Service Techniques -- 2 Free Chapters
TABLE OF CONTENTS
About the Author
Part I Developing Strong Client Relationships From the Start
Chapter 1 - Doing Business in the "Age of the Customer"
Chapter 2 - Selectivity: The Key to Longer, Happier Client Relationships
Chapter 3 - How to Satisfy Your Clients by Understanding Their Needs
Part II Keeping Your Clients Happier Longer
Chapter 4 - Giving Clients More than They Pay For
Chapter 5 - Ensuring Satisfaction Through Client Communication
Chapter 6 - Performing Services Above and Beyond the Clients' Request
Part III How to Handle Problems and Complaints
Chapter 7- Handling Price Complaints
Chapter 8 - Handling the Client Who is Dissatisfied With Your Service
Chapter 9 - Coping With Difficult Clients
Chapter 10 - How to Prevent a Dissatisfied Client From Leaving You
Gift 1 - 21 Customer Service Situations ... and One Good Thing to Say to Each Unhappy Customer
Gift 2 - Practical Techniques for Producing Profitable Ideas
Gift 3 - 8 Ways to Improve Your Managerial Skills
Gift 4 - Improving Your Listening Skills
Gift 5 - Improving Your Time Management Skills
Gift 6 - Improving Your Telephone Skills
Gift 7 - Improving Your Interpersonal Skills: How to Handle Difficult People
Gift 8 - 10 Ways to Reduce Stress on the Job
Gift 9 - How to Handle Job Burnout
Gift 10 - How to Give a Successful Presentation
Ch 1 - Doing Business in the "Age of the Customer"
You bought this ebook because it's tougher than ever to succeed in business and you want to gain a competitive edge. And you figured learning new client satisfaction techniques would be valuable to you in your business.
How right you are! In today's marketplace, it is tougher than ever to get and keep new clients. Several factors have contributed to this: a recessed economy, increased competition, more sophisticated technology, less time (and therefore more time pressures), and less money to spend.
Surviving in a Recession
First, the economy. In the early 1990s this country experienced one of its most severe recessions of all time. What effect did that have on business? What was once a seller's market suddenly became a buyer's market. People spent less. Sales were down. Companies put spending programs on indefinite hold. As a result, business became scarce. Instead of having more business than they could handle, many previously busy and successful firms did not have enough business. And it's supply and demand that puts you in a weak or strong position.
For example, when you have more business than you can handle you can be more selective about the jobs you take. You can require clients to conform to your schedule. And if you're really in demand, you can charge pretty much top dollar and get it because you're negotiating with the client from a position of strength. When you know you'll continue eating well even if you lose the job, you can more easily stick by your guns and get what you want. After all, you really don't need the work.
This was the situation during the 1970s and 1980s. Clients had money to spend and were lining up at your door to spend it. Sure, maybe you did some advertising, marketing, and selling, but it was easy: you pretty much knew that running your little ad or sending out your mailing piece or making some sales calls would quickly bring you as much business as you desired.
There is a temptation in such a circumstance to be lax about client service and courtesy. After all, when you are turning down three clients for every one you take it really doesn't matter if a few of them walk. Perhaps you became difficult, stubborn, a prima donna, hard to deal with. Or maybe you were generally good to your customers, but didn't worry about or notice any lapses or infractions committed by your employees.
Clients were thick-skinned and fairly loyal: they tended to stick with their vendors unless the vendor was totally inept. And even then it might take several bad experiences before the client began looking elsewhere.
On the other hand, when you don't have enough business the picture changes drastically -- again, a function of supply and demand. When the demand for your product or service diminishes you're not sitting so pretty. You realize just how difficult it is to make new sales and get new clients, and you also realize what a precious commodity a good client is.
Advertising and promotion are more expensive than ever and don't work half as well as they used to. The phones aren't ringing. Salespeople and telemarketers become demotivated, hit harder by constant rejection and prospects who are shopping around more or are simply not buying.
In the early 1990s, clients began to realize they could go elsewhere -- and rather easily. They saw that they, not you, were now in the driver's seat, so to speak. You need the business; they have money to spend. So they expect to be courted and treated like royalty.
And in essence that's the business attitude that dominated the 1990s and is continuing into the twenty-first century: ultimate customer service. The client is king. They know it. You know it. If you want their business you must treat them accordingly.
This does not mean that subservience or sycophantic behavior is necessary. Far from it. In business, the central transaction is an exchange of value for value: their money for your product or service. For the relationship to work you have to be peers with the client as an equals. However, since the 1990s your clients have been a little more equal than you!
Staying Ahead of the Competition
A second factor contributing to this new era of business in which keeping the client (and keeping them satisfied) is the central focus is the growing competition. Simply put, there are more products and more services out there competing for the consumer's or businessperson's dollar than ever before.
Perhaps you started off with a "mini-monopoly," because your business was unique, or you specialized in such a rare area that you were basically the only person prospects could turn to for your particular expertise or service. Such people are becoming rarer and rarer.
Now, competition abounds everywhere you look. If your business is a commodity product, you see new competition springing up every day.
Here's an example: Three years ago, in my small town of New Milford, New Jersey, there was one video store. Now there are three. Not only that, but you can also rent videos at the stationery store and the A&P.
Now, a video you rent from one store is exactly the same as the video you rent from another store. So what makes the difference? Service to the customer. Each new video store began offering more and more services that the first store didn't offer, including:
A broader selection
More copies of popular movies available
Late-night drop-off of tapes
VCR repair service
Selling of sodas, popcorn, and candy to eat while you watch your movie
Cleaner, nicer store
No initial membership fee
The original video store, sadly, went out of business. It was unable -- or unwilling -- to change its operation and suffered accordingly.
Although commodity product sellers are facing stiffer competition than ever, with superior customer service being the only competitive weapon available, even specialists are feeling the heat of increased competition. People in small niche markets and highly specialized businesses no longer have their comfortable mini-monopoly. Why? Because other entrepreneurs looking to get into business see the niche market or specialty service and copy it.
Why is there so much more competition today? A major contributing factor goes back to the weak economy. With the massive business failures and downsizing of corporate America, more and more people at all levels suddenly found themselves out of a job with dim prospects for being employed elsewhere any time in the near future. According to Drake Beam Morin, the world's largest career transition consulting firm, in 1992 it took the average professional who was fired 7.2 months to find a new job.
Many of these terminated corporate workers saw a lousy job market and decided to go into businesses of their own, either as consultants or running some other small enterprise. This meant a tremendous increase in competition in almost all fields of business. What's more is these beginners tended to charge low fees. That didn't mean they would beat you out for a job, but it did mean your prospective clients had another option. Now they could tell you your price was too high and quote much lower prices from these low-bid sources. And so they gained leverage in negotiation of prices.
Prices for a wide range of services dropped dramatically in the early 1990s. At the same time customers became more demanding than ever. As a result, many businesspeople complained they were working harder but are earning less, and that change may be permanent. You can still make nice money in business today, but you will have to work harder. Instead of fighting it, face it, make peace with it, and push forward.
Keeping Up With New Technology
A third factor that has contributed to this new era and made it the "Age of the Customer" is technology. Modern technology may have its benefits but it has speeded up the pace at which our society moves enormously. Voice mail, modems, online databases, facsimile machines, electronic bulletin boards, and the accessibility of overnight delivery services have created a consumer who wants it now, if not yesterday.
The customer has come to expect instant gratification. The service provider who does not provide it is at a competitive disadvantage. In many aspects, small businesses are at a competitive disadvantage with larger ones because they cannot afford the staff or equipment to render such a high level of service.
But what a smaller company lacks in resources it can make up in customer treatment and customer contact. A big organization, for example, may have inflexible policies the customer service person is not authorized to break, and this inflexibility can infuriate the customer if the policies prevent customers from getting what they want immediately.
At the smaller company, the person serving the customer usually has the authority to break, change, or make new policy on the spot. Not being locked into a rigid way of doing things controlled by a long chain of authority gives you the freedom to do whatever it takes to keep and please the customer.
Accommodating Client's Time Pressures
In addition to the weakened economy, increased competition, and technology, a fourth factor adding to the creation of "Age of the Customer" is time or more specifically, the customer's lack of it.
Everybody seems to be busy today; to have more than he or she can handle. The workweek has not decreased, nor do people have more leisure time today, as was once thought would be the case by now. If anything, corporate employees are working harder than ever before.
The reason is again the economy. With corporations downsizing and terminating employees daily, managers realize they are no longer indispensable, and they cannot count on the corporation to provide them with a lifelong job and financial security. That era has passed and will probably never return.
With high unemployment and fewer jobs, corporations, as employers, have the advantage over their employees. It's supply and demand again: when positions are scarce, employees want to hold on to their jobs, so they complain less, ask for less, and work harder.
The happy 1950s scene of the husband on the commuter train coming home to a martini, pipe, slippers, and a barbecued steak in the backyard is also long gone. Now both spouses are working demanding full-time jobs and are exhausted from doing that and raising a family at the same time.
The upshot is a society of time-pressured consumers demanding a higher level of service than ever before. Clients want you to save them time and they get impatient very quickly if you don't.
The customer is similarly pressured at work. Downsizing means there are fewer staffers to handle the work and increasing competition means there is more work to do. As a result, everyone's too busy and pressed for time.
In business-to-business selling, vendors are finding that clients want the vendor to do -- preferably at no cost -- what should really be the client's job. The client is time-pressured and wants to hire not necessarily the vendor who can do the best quality job, but the vendor who will be a "partner" and help shoulder the load.
To some degree, clients have always wanted their vendors to give them some extras and not see a bill for it. The difference today is the vendors -- at least the ones who want the business -- are doing it. This helps strengthen the client/vendor relationship but again requires the vendor to do more work for less pay. This cuts the profit of all firms and is personally wearing on the small business owner who must work harder to accommodate this new type of customer.
Coping With Clients Who Have Less Money to Spend
The last factor that has resulted in the current “Age of the Customer” is what I call downward mobility. Simply put, although we make more money than our parents, we are actually less well off, because the cost of living has outstripped the increase in salaries.
For instance, about 25 years ago, a three-bedroom house in my county might have sold for $20,000, and the person buying it was earning maybe $15,000 to $25,000 a year. Today, that same house goes for $260,000 -- more than ten times as much -- but the buyer is earning $65,000 to $80,000 -- only four times as much. What this means is that while we make more than our parents, our expenses are proportionally greater, so we're not living as well.
How does this affect you? Disposable income is less. Consumers are still buying, but they are spending more carefully. Interestingly, they are buying some small luxury and expensive items (air-pump sneakers, gourmet ice cream, take-out sushi) to compensate for the fact they can't afford the big-ticket items. They're also buying services that save them time, such as housecleaning and babysitting, but are cutting back in many other areas.
Downward mobility reduces buying power and makes your customer extremely deliberate about purchase decisions.
The Seven Major Changes in the Way Customers and Clients Now Buy Products and Services
As a result of all the factors just discussed, there has been a fundamental shift in the way consumers and businesses acquire products and services; and in their relationships with retailers, service providers, manufacturers, dealers, and others who supply these goods and services.
Understanding these differences and accepting that this is now the way it is will make your life easier in two respects. First, instead of being frustrated by the changes taking place, you'll recognize them and accept them. You'll still have to meet these challenges, but you'll at least learn to accept reality and stop longing for better days that will never return.
Second, the first step in solving a problem is understanding the problem -- not the apparent problem, but the true nature of the challenge you are facing. By recognizing that these seven fundamental shifts in the customer/vendor relationship have taken place, you'll be better able to adjust not only your customer service and product quality to meet these new demands, but also your sales and marketing efforts to sell this new consumer.
Here are the seven key changes I see in today's consumers and business buyers, along with some ideas on how to adapt.
Fundamental Change 1: The Market Has Become More Price Sensitive
As a direct result of the recession of the early 1990s your customers have become more price sensitive. This does not necessarily mean that price is the only concern, or that the low price or low bid will be the one that makes the sale.
But it does mean that business and consumer buyers are more concerned than ever about what things cost. Price is always a factor, to some degree. But its importance has escalated dramatically, and the way you price your service is a major factor determining whether the client is happy with you or whether they will begin to look elsewhere.
Consumers evaluate many purchases more carefully. In the corporate world, the manager is increasingly rewarded for being a good buyer, which translates into getting vendors to do the job for as low a price as he or she can negotiate them down to.
In the 1980s, firms would choose their area of superiority and offer that as the reason to hire them. Basically there were three options: price, quality, and service.
Some vendors got jobs on price because they always bid low and won contracts from prospects who look to get it as cheap as possible. Other vendors stressed quality. They said, "We take our time, you'll have to wait, and we charge a lot. But if you want the best, you have to pay for it." Customers looking for quality responded to the pitch.
A third group of vendors stressed service: they weren't the cheapest, and they weren't the best, but they would do anything the client asked. If the client said "jump," they asked, "How high?" If the client said, "Call me to go over the report at 10:00 at night," they said, "Yes, sir." Customers who valued service above all else gravitated toward this type of vendor, even if the price wasn't low and the quality wasn't absolutely the best.
Now, however, all that is changed. You can no longer "specialize" in price, quality, or service because your customers want all three. They want a top-of-the-line product, but they also want a "good price." They want you at their beck and call, and they want it yesterday. This is a difficult bill to fill, and it's why many service providers long for the golden years of the 1980s. But it's what you learned to live with in the 90s and will continue to live with now.
The market is more price sensitive, but as I've said, this does not mean being the cheapest price is an automatic winning strategy. With some customers, yes; with others, no.
There has always been a segment of your market that buys primarily on price. What has happened is that the size of this segment has increased. Not everyone is a price-buyer, but more people are. Pressured by lack of disposable income or a corporate mandate to control spending, they want you to give them a break on price, price, price.
Coping with "Price-Buyers." To the price-buyer, the winning bid is selected by the bottom-line dollar amount: the job goes to the firm who can do it for the least amount of money. They figure it will be "good enough," and so do not consider higher bids.
You must be able to spot the price-buyer and decide if you are willing to play this game. As a rule of thumb, when a customer calls you and the first thing they ask is what so-and-so will cost -- with no apparent interest in your qualifications, track record, product features, or experience -- you are probably dealing with a price-buyer.
Some industries have been harder hit by an increased emphasis on price-buying than others. In contracting, for example, independent contractors who do home remodeling and building face stiff competition from bigger firms that advertise standard-design family rooms, dormers, or other add-ons at a low-package price.
"These firms generally don't do good work and can rip you off," one independent contractor told me recently, "but that low, low price does sell for them. Prospects ask me, `Why do you charge so much when so-and-so firm advertising in TV Shopper can do it for $10,329?' And it's a problem: many don't understand, don't believe, or don't care when I point out the difference between our work and the bargain-basement contractor's. And we do lose business to them."
So part of this price-consciousness trend is that a portion of the market that were not previously price-buyers have been converted to price-buyers.
Coping with value-conscious buyers. As for those customers for whom price is not the major issue, most of them have changed as well; they have become more value conscious. That is they aren't necessarily going to buy the low price, but they do want to be sure they are getting the most value for their money.
Be aware that the value-conscious buyer is going to be a demanding customer. But there are very few non-demanding customers left, so you've got to adjust. Be prepared to provide more service, to do more, and to act faster, for the same or lower price than you were getting five years ago.
Value-conscious buyers will often meet your price but in return want to make sure they are getting the most they can out of you, and everything you do will be scrutinized carefully. Today’s buyers are not shy about complaining when they're not happy, and they'll often complain about small things -- every detail must be to their liking. Get used to it and prepare to accommodate them. This is business in the 21st Century.
An important note: If you are going to give extra service to a customer, do it immediately, pleasantly, openly, and willingly without griping about it. If you give the customer a hard time, and there is some argument, and you give in and do it, customers will not be grateful that you did what they asked because they think that's just part of what they're entitled to.
They will, however, remember that you gave them a hard time. And that's the quickest way to get your valued client flipping through the Yellow Pages and calling your competitors for a bid on the next job.
The best way to respond to the value-buyer who wants more and more from you is to agree immediately and pleasantly, and act as if it's a pleasure for you. As Lou Weiss of Specialty Steel & Forge says, "Having a can-do attitude is what works in today's marketplace."
If a customer's request catches you off-guard when you're in the middle of something else, you need time to think. Say you have another phone call or are in a meeting but will get back to them in five minutes. Then you can think about how you will respond and do so in a calm, polite manner without showing anger or annoyance.
Fundamental Change 2: The Average Purchase Is Smaller in Size
People and businesses will always have to spend money. They need products and services and can never totally do without them. However, today they are spending less, and the average dollar value of their purchase, investment, or contract is likely to be far smaller than it was in previous times.
There are two reasons why the average purchase has shrunk in size. The first is purely economic: people and businesses are on tighter budgets and want to save money and spend less. They might like to buy more but feel they can't afford to.
The second reason is that consumers are fussier and prefer to "test" a vendor, product, or service before making a larger commitment. The small initial purchase is one way of testing you without a large risk or investment. If they like what they get, they'll probably come back for more. If they don't, they figure they haven't lost much.
This buying habit is hard on vendors for one simple reason: in many cases it takes just as much effort to close a sale worth $10,000 as it does to close a sale for $1,000. So you spend just as much time courting the client only to be rewarded minimally for your efforts. It's frustrating and tiring. Again, you're working harder and making less.
Part of coping is simply to acknowledge and accept this fundamental change in buying habits as the way things are now. However, there are a few specific things you can do both to increase your ability to get business from clients as well as to boost your revenue.
Repackage your product or service. First, because the customer wants to spend less initially, you should repackage your product or service to accommodate this desire. What you're doing is lowering initial entry cost for the client to do business with you. This gets your "foot in the door" and paves the way for repeat business, which is the lifeblood of most companies.
For example, I know one software vendor whose product costs $1,999. Because that's a lot of money and people are hesitant to spend that, he offers what he calls a "Small Project" version of the program for only $50. The Small Project does everything the $1,999 "Commercial" version does, except it restricts the user from entering more than a few pieces of data, so that it cannot handle any real-world application. For $50, many more people buy and try the software, and those who like it then move to the next step and upgrade to the $1,999 commercial version.
In another situation, a company was selling a kit of tools and raw materials for building certain products at home. The kit cost $599. The company owner realized that the price was a barrier to many prospects who would prefer to make a smaller initial purchase. So to those who did not take the $599 offer, he offered a "starter kit" for only $99. This proved enormously profitable; when the entry point was lowered, customers bought.
Services can also be repackaged to accommodate this trend of buying in smaller increments. A $1,600 a day consultant, for example, might offer an initial half-day consultation at a reduced rate, say, $600 instead of the usual $800. Many clients who find $1,600 a day hard to swallow see a $600 "starter package" as more affordable.
Offer a wider range of options. You should also think about organizing your product line or service menu so that there are a wide range of options from which the buyer can choose, from a low-priced item to an expensive purchase.
One company selling information on how to be a better public speaker sent me their literature. I was interested in their material, but not sure it was what I wanted or that it would be good, and because of that, I didn't want to subscribe to their newsletter for $100, take their seminar for $250, or buy their audio-cassette album for $180. So I did not buy.
Later, when they mailed me a catalog, I saw they had produced a $10 book that contained some of the basic material in the other items. I ordered immediately and became a customer. I have since bought many other things from them, moving up the price scale with each new purchase as I become more comfortable with them.
Lower or waive your minimum order requirement. If you have a "minimum order," you should think about lowering or eliminating it. What happens when a valued customer picks up the phone to place a small order and is told she can't, because it doesn't meet your minimum order amount? She'll probably remind the order taker that she is a regular customer and request that the order be taken anyway. When the order taker says he can't, she will immediately call your competitors because she's in a hurry and has no time to waste.
The competitor fills the order, and your customer realizes, "Hey, it's the same product, and it's just as easy to order, and they helped me out." And suddenly she has moved all her business to your competitor -- a loss you could have prevented by being more flexible and accommodating.
A key strategy to keeping clients satisfied is to remove all barriers to doing business the way they want to do it and to be totally accommodating and flexible. Waiving the minimum order requirement for existing accounts is one example of doing that.
Today’s average project will be smaller in scope, and the average purchase smaller in size. Accommodate that with a lower-priced starting point so the client can "sample" your wares before making a bigger commitment.
This applies to existing accounts as well as new business. The size of the average order you receive from your customers will probably be substantially less than it has been in the past. Yet they will expect the same level of service, care, and concern they received when they were a bigger account.
Do not let clients know you are annoyed or unhappy at their reduced spending. They care about themselves, not your profits, and remember: they can always go elsewhere. No matter how good you are, you're not indispensable. Keep that in mind.
Fundamental Change 3: Purchase Decisions Are Made by Committees Instead of Individuals -- And They Take Longer to Finalize.
You are going to face enormous frustration serving your clients and customers on an ongoing basis if you do not recognize and accept the fact they're going to take longer to make up their mind, and may require more hand-holding and prodding to get them to act.
With so many households needing two incomes, buying is more and more a shared, joint decision. With money scarcer, major purchases become frightening, and so people use their friends, relatives, and associates as an ad hoc buying committee -- asking twenty different people their opinion and getting twenty different answers.
In business-to-business selling, the buying authority of many managers has been reduced or is lower than it used to be. When I was twenty-four years old and in my second job out of college, I had a junior-level position with an engineering firm, yet I could spend $5,000 or even $10,000 without someone higher up having to sign off or making a presentation to management.
Now as a seller I deal with corporate clients in their 30s, 40s, and 50s who have to consult with many different people and get approval from a management committee before they can authorize a $2,000 or $3,000 expenditure for consulting or training services! The atmosphere is cautious and the buying mode is by committee.
This becomes agonizingly frustrating, not to mention time consuming, for the vendor who has to deal with corporate clients. You might have to prod and push and call fifteen times to get a client to give you the final go-ahead on a project or authorize the next step of an ongoing assignment.
Often this results in total disruption of your schedule. The client, of course, originally wanted everything the day before yesterday, and you moved heaven and earth to accommodate him. You submit the first phase of the project, and they sit on it for weeks before getting back to you.
The temptation is to read the client the "riot act" and say you'll have no more of it. But don't. Remember, the client is looking to you for support and has hired you to make her job easier, not harder. The best strategy for keeping your client satisfied in this situation is to be flexible, accommodating, cheerful, and helpful.
Don't complain about the delays they have caused, and don't say you can't do your end because they're not doing theirs. Instead, just say you are checking into the status of the project and is there anything you can do to help move the process along?
If you must have the client respond to you with a check, contract, or other action before you can proceed, remind the client, but do so nicely -- as a friend, partner, and teammate, and not, as so many do, as an adversary.
Another sticky issue when dealing with clients who are slow moving and do things by committee is: When is a contract really a contract? In the old days, when you had a good relationship with a client, the verbal go-ahead from your contact person at the client company -- to be followed leisurely by a purchase order or letter of agreement -- was taken as a "go."
Now, that's not the case. Remember, your corporate client is no longer the decision maker in authority: they have to run everything by the committee. So be aware that when he approves your estimate or tells you to schedule the first meeting for the twenty-third, it's not firm yet.
More and more clients, both business and consumer, are having second thoughts and great anxiety over purchase decisions. So what's firm in your mind may not be firm in theirs. Make sure your paperwork is signed, sealed, and delivered before you count the job as yours. Even then, cancellation is possible. (We'll deal with what to do when the client cancels after the contract is signed in Chapter 8 on coping with problems.)
Today's client moves slowly but expects lightning-fast response from you when they're finally ready to roll. They can operate at a snail's pace, but they won't allow you the same luxury. It doesn't matter that you're busy and have scheduled other work because they delayed the contract -- they want you now and the meeting is tomorrow morning. Expect to jump through more hoops to keep clients satisfied in the decades to come. The client expects you to be there instantly when he needs you, and if you aren't, your competitors will be.
Fundamental Change 4: Customers Are Buying Products and Services in Small Increments Rather Than All At Once
Even if the client has a big need, today's customer is more likely to buy incrementally rather than all at once. Even your "regulars" aren't going to give you the big orders you once got; instead of buying everything on the menu, they just want item 3 from column B.
The trend will be for clients to give you authorization for smaller pieces and parts of what they need rather than the full package. Even if they eventually purchase the full package, it is not going to be bought all at once.
As a result, you are less likely to walk away with that big eight-part project; rather, the client will assign the work to you one piece a time and then wait and see what their needs and finances are in the weeks or months ahead before going forward with the next phase or step.
Don't fight the client on this or push too hard for a bigger order; this piecemeal buying is pervasive among customers today, and they are looking for you to accommodate it rather than fight it. In fact, you will score points with your customers by showing them how to do things less expensively and spend less rather than more.
In this era of reducing spending, clients often get the feeling that their suppliers and vendors are always pushing for them to buy more product or use more services, not in the best interests of the client, but because it means a bigger sale -- and more profit -- for the vendor.
To a degree, they're right. If you're a contractor specializing in adding family rooms to houses, and you get paid by the square foot, aren't you going to push the prospect to get a bigger family room rather than a smaller one? Your rationale on the surface is that they'll enjoy the bigger room, and even though it's tough for them to swing it now, they'll thank you later.
This may be true, but at the same time you know there's a little voice in the back of your head saying, "And also, I'll make more money on the bigger project." So the client's mistrust of vendors and belief that they are out to "get" the client is partially valid.
While the bigger job brings you bigger bucks, losing the client because they think you're only looking after your own interests means no bucks at all. So let me suggest an alternate strategy:
Every once in a while, recommend to the client that they not buy your product or use your service, or at least that they buy less of it.
This instantly raises the client's trust and opinion of you by an order of magnitude. It comes as a shock because it's directly the opposite of what they expect from you. They expect you to try to sell them; when you show you are trying to help them instead -- especially if that help involves spending less money rather than more -- it gets their attention. And it strengthens the client/vendor relationship substantially: You are the one who's recommendations they can trust; why bother to go elsewhere?
An effective strategy for dealing with the customer trend of buying in small increments is to offer the customer a menu of products, services, or options from which they can select what they want, rather than bundle everything together and force them to take the "whole package." Make the identity and cost of individual elements clear rather than try to hide them.
If you offer customers a high-priced "take-it-or-leave-it" all-encompassing package, they're more likely to leave it than take it, which means they will soon be dealing with another vendor instead of you.
On the other hand, if you let your customers buy a little now, and then go back for more later, they'll be more likely to do business with you on a basis that accommodates their limited budget and more "timid" buying habits. Obviously your profit on the sale is smaller, but the idea is to maintain a good relationship so that you make it up on many future sales.
Fundamental Change 5: Less Important Jobs and Projects Are Now Being Done by the Clients Themselves
Consumers have always been into "do-it-yourself' to some degree, and business clients have always done some of the type of work you do for them in-house. But now the trend is, because of economic necessity, to save money by doing more in-house-especially "low-end" projects that do not warrant the expense of costly outside help.
You may immediately be thinking that I am in error. "The trend is downsizing," you say, "so actually, businesses are cutting staff, which means more work for outside vendors." This is true, but only to a degree, and here's what's really happening: Although businesses are cutting back on staff, they are investing in in-house systems and technology that make them less dependent on costly outside services.
As an example, consider graphic arts. Corporations have scaled back communications departments so companies that once had five or six graphic artists on staff now have none. You would think that would mean lots more business for independent graphic design studios. And it did, for a while.
But what are these companies doing now? They are acquiring desktop publishing systems and training support staff to use them to produce newsletters, bulletins, reports, fliers, and other materials that were once farmed out to the graphic design studios. Secretaries are now producing materials that professional typesetters and designers once charged clients a pretty penny for.
Yes, the clients still use the freelance graphic artists for the "important stuff": annual reports, color product brochures, posters. But the trend is for clients to do more of the easier, less important, or nonessential tasks in-house themselves.
Consumers, despite lack of time, are the same way. People who would once have called a professional to paint a room or put up wallpaper are buying do-it-yourself Time-Life books and videos, and are watching Bob Vila, the home improvement spokesperson for Sears Roebuck. People who once spent freely in the 1980s continue to be concerned about what things cost and how they can save their money.
What does this mean for you as a vendor or supplier? Much of the low-end of the market for your service or product will shrink or vanish altogether. As a result, you will be competing with more firms for a smaller number of projects or sales. Again, this makes the environment more competitive and puts the customer, not you, in the driver's seat.
How to cope? One strategy is to redesign your business so that you can handle the smaller jobs and nonessential projects so efficiently and cost-effectively that clients give them back to you instead of doing it themselves.
For instance, in the 1980s, when desktop publishing began to get noticed, ad agencies and graphic design studios laughed it off as fad: after all, the client was not a graphic artist, so just having a computer instead of a ruler or paintbrush wouldn't allow them to replace the agency or studio, they reasoned.
The graphic arts industry, therefore, was slow to implement the new desktop technology. But their corporate clients embraced it and were suddenly turning out reams of material and telling the agency, "We don't need you for this."
Many agencies and studios responded by acquiring their own desktop capability and offering it as a faster, less costly graphic service, making it once again attractive for clients to go to the agency or studio instead of doing it all themselves. In this way, the agencies and studios regained some of the work they had previously lost.
Or you may decide the low-end stuff isn't worth having and allow the businessperson or consumer to do it themselves, concentrating your own efforts on services the customer is not going to perform in-house. The choice is yours, but you must be aware of the do-it-yourself trend and have some strategy for responding to it.
The do-it-yourself trend has also created a new source of competition for you: lower-priced service alternatives designed specifically to handle these low-end tasks at low cost. To continue with our graphics example, the rise of desktop publishing resulted in numerous people starting "desktop publishing services": people bought Macintosh computers with page layout software and told corporations, "We'll do your newsletters and bulletins for you, and we'll charge one-third of what your ad agency is charging."
Ad agencies looked down on such services or laughed them off initially, but they aren't now. The desktop publishing service has created a permanent low-priced alternative source to the more sophisticated ad agency or graphic design studio solutions. Ad agencies and design studios must respond to the challenge by offering similar service when needed or more effectively bonding themselves to the client as the number one vendor for design services through some other means. But the options of "do-it-yourself' or do it through a low-priced alternative are here to stay.
Fundamental Change 6: Customer Loyalty is a Thing of the Past
When you have been dealing with a customer for a while, you develop a zone of comfort with that customer that causes you to relax in your dealings with them. This follows from the principle of "familiarity breeds contempt." I'm not saying you have contempt for your customers. Far from it. You probably like them, and maybe even consider some friends.
But the way you treat your old, steady clients is not the way you treat your new customers or the hot prospects you are pursuing. It's not even close to the way you treated the old, steady client when they were a new account.
When you're pursuing a prospect, you put your best foot forward. You tell the prospect all the good things about your firm, none of the potential negatives or weaknesses.
When you first get the customer you do everything in your power to ensure that the first order is fulfilled quickly, efficiently, and without difficulties or delays. You realize that the new client is not yet really "yours" -- and that if you don't deliver the superior service you promised in your sales pitch, you won't have them as a client for long.
As time goes on, and the customer continues to buy from you, your attitude becomes, "Well, they've become a regular for us. The pressure is off." You assume that the customer is happy with you and always thinks of you when they need the types of products or services you sell.
This may have been true at one time, but it isn't anymore. Your competitors are pursuing your best accounts and doing everything in their power to take them away from you -- almost on a daily basis. Worse, your key accounts do not have the loyalty to you that they did in the 1980s and early 1990s -- even though you may think they do. This means that, unless you're at your competitive best at all times, in every dealing with the client, you're at risk of losing that client at almost any time.
Therefore, the habit of relaxing and taking it easy when the account becomes "yours" is a pattern that must be eliminated from your behavior and the behavior of your employees. Every day, every interaction with the customer, every product shipped, every service rendered, every problem handled, all must be done with the same excellence you would show as if this were your first order from the client and he was testing you on a "trial" basis to see if you'll work out as a vendor.
Loyalty to a specific service, product, vendor, or supplier has not vanished completely, but it has significantly diminished. Your customers want it their way. They want it cheap. They want it great. They want it fast. If they can't get that from you today, tomorrow, or the next day, they're not going to stick with you because you "have a relationship." Instead, they are going to search for alternative sources and be extremely receptive to your competitors' sales pitches.
You cannot relax today when servicing an account or nurturing a relationship with a customer. Customers are quick to "see red" and become annoyed when things are not done exactly their way.
You are, in essence, never really through "selling" the client. The "sale" is not something that happens once and ends when you get the contract, check, or purchase order. "Selling" is something that takes place before, during, and after the service is rendered or the product is delivered: it's an ongoing process that lasts for as long as that person or company is your customer.
This also affects how you price your product or service to existing accounts. Again, in the past, you might have developed a comfort zone that said to you, "Well, they're in love with our product, they love our service, and we're fulfilling all their orders within 48 hours. Where else can they get such great service? They can't, and they know it. So they're not looking around, and I can charge them a little extra because they won't mind paying us a bit more than we've been charging. They probably won't notice and, after all, we're worth it."
In today’s "Age of the Customer," that thinking doesn't hold. The account you think you have a "lock" on is much less attached to you as a vendor than you would like to believe. In fact, you'd be surprised to learn how many of your clients are now closely scrutinizing price quotes and cost estimates on orders they once would have approved automatically.
Customers are reviewing your pricing much more carefully than ever before, and they are seeking other bids on many jobs you thought were "yours"-and doing it without your knowledge. So don't get too comfortable in the way you charge your best customers because you think you can "get away with it." You can't. Half the time, it's a competitive bid situation, and you, as the "incumbent" vendor, don't even know about it until it's too late and you've lost the job.
The key strategy here is to treat every client as if they were your most important client and every job as if it's a highly competitive bid situation. Avoid complacency in customer service; it can cost you business.
Fundamental Change 7: Customers Want More Services Without Paying More
Today's customers want as much as they can get for as little as they can pay for it; they want "extras" and "freebies" and discounts.
The higher-priced supplier or vendor used to be able to combat this type of buyer with the argument, "I know we cost more, but if you want a Rolls Royce you have to pay for it." Now the customer expects a Rolls Royce for the price of a Mercedes or even a Cadillac -- and in many instances there is competition out there offering it to win the customer away from you. In fact, many of them are offering quality comparable to yours.
Negotiation in all aspects of business is becoming the norm rather than the exception. Many vendors will tell you their pricing is firm, but when you don't buy, and they call back, suddenly there's a reason why they can offer it lower if you act now.
Many authorities on selling will tell you always to stick by your price and never back down. I gave such advice myself in the books I wrote and published in the 1980s and 1990s.
But today you need all the competitive weapons you can get to win the business war, and you need me to be completely honest with you. So let me tell you: almost everyone today negotiates or bargains at least part of the time. Anyone who says he doesn't is a megastar in his field, has a virtual monopoly, or is a liar.
Does this mean you have to "give away the store" to make the sale? Fortunately, not. Customers are reasonable and understand, to some degree, that you have to make a profit; they don't expect a $25,000 home improvement job for $10,000. However, today’s buyer is likely to get you to throw in some extras with the job-extras you'd normally charge for -- and then get the whole package for $24,000 or $23,000.
What do you do? Chapter 4 goes into great detail about how to accommodate the buyer who wants a little extra, a little something for nothing. You'll see that meeting this request halfway is easy, inexpensive, and can make you a hero with your customer. Being totally inflexible and rigid about your pricing or policies is likely to cost you a lot of business this year and next.
Why Customer Service is the Number One Priority in Running a Successful Business Today
If you look at these seven fundamental shifts in customer behavior, you'll see one common theme to them: the customer wants and demands more service from you.
Increasingly, customers see the services and products they buy as looking more and more alike. What differentiates one source from another in the customer's mind is how you treated them. Did you deliver on time? Was your advice good? Did you answer all questions promptly? Did you bill the amount you said it would cost? Did you save them money or improve their operations in a a way they didn't expect? Excellent customer service -- not product design or service methodology -- is increasingly the differentiating factor that determines whether you keep or lose clients.
How to Keep Your Clients Happier Longer
This book will show you how to render excellent customer service, resolve problems so they do not harm the vendor/customer relationship, and keep your clients happier longer.
An important, but often overlooked element in ensuring a long list of satisfied customers is to start the relationship on the right foot in the first place. This means accurately determining what the customer really wants and matching your product or service to satisfy those wants.
More important, it means choosing the right customers -- customers you know you can satisfy and will enjoy dealing with -- and not taking on customers who don't fit that bill.
Let's talk about how to do that in Chapter 2.
Ch 2 - Selectivity: The Key to Longer, Happier Client Relationships
If you don't enjoy dealing with your customers any more, and if your client relationships are fraught with problems, difficulties, and stress, maybe you aren't the cause of these problems. Instead, maybe you need new customers. That's a need that can be met, but how much better off you'd be if only you would choose the right customers in the first place! This chapter is written to help you find, get, and keep the right customers for your business.
Selectivity is the Key to Better Client Relationships
There are many factors affecting your relationships with your customers. Your service, product quality, courtesy, prices -- all these can cause customers either to be happy with you or dissatisfied with you. We all know this: it's obvious.
But another "obvious" fact that most businesspeople ignore is that one of the most powerful strategies for assuring good customer relationships -- that is, customer relationships that last a long time and are profitable -- is to choose the right customers in the first place.
Choosing the right customers can eliminate 80 percent of problems before they occur and make your life a lot more pleasant and stress-free. Choosing the wrong customers can give you headaches, ulcers, stress, worry, and a sour disposition from continually fixing problems, mending fences, and being at odds with people you depend on for business but with whom you can't seem to get along.
Many of the problems you have keeping clients satisfied can be avoided if you stop taking on clients whose requirements you know in advance will be difficult if not impossible for your particular product or service to satisfy. And many of the collection problems you have chasing deadbeats would not exist if you enforced your credit policies and avoided doing business with people who are obvious credit risks in the first place. In short, many of the problems you experience coping with difficult customers will be alleviated if you choose to do business with people whom are easy to get along with.
Clients Choose You, But You Also Choose Clients
For many businesspeople, especially during an economic downturn, the concept of "choosing" clients is alien. "What do you mean 'choosing clients'?" you object. "In today's economy, we take all the business we can get."
That may seem a sensible strategy when things are slow, but it will get you into trouble almost every time. There are better ways to cope with a business downturn, as we will see.
Clients choose vendors, no doubt about it. Every order you get, every sale you make, every contract you sign is the result of some sort of review process on the part of the prospect. They are the client, the customer, the buyer; they are the ones spending money, and they have the power to hire you or not hire you.
But to ensure maximum client satisfaction down the road, this selection process should not be a one-way street: just as clients choose you, you choose clients. You should look at each potential customer carefully; analyze their needs, wants, personality, and buying power; and make a yes/no decision about whether to accept them as a customer.
This screening process is done silently by you and should not be made obvious. Although the customer is making clear that you are one of several vendors under consideration, you shouldn't let them know they are one of many clients you are considering working with or not. You just smile and say you're glad they're interested in your services, but unseen by them, you are holding a magnifying glass as close to them as they are to you.
The First Step to Screening a Client: Use Your "Mental Radar"
Whether you know it or not, you're screening potential customers every time you see, talk with, or meet a first-time prospect.
Let's say someone calls you on the phone in response to your Yellow Pages ad and begins inquiring about your service. If they are well-mannered, articulate, pleasant, and seem intelligent, you probably form an instant positive impression. Within a few seconds, the prospect has passed your first-stage screen: you've made the decision that, if all other factors work out, this is someone you'd like to have as a customer.
Now a second prospect calls. This person is loutish and ill-mannered. He immediately begins questioning your credentials in a challenging tone, frequently telling you how he hired this competitor of yours and that competitor and no one could please him. Within seconds, this prospect begins to grate on your nerves; you take an instant dislike to him. You run this data through a subconscious screening process, and your mind gives you the result: this is a customer you don't want. You quickly make some excuse about being busy or not having any product in stock and get off the phone.
Actually, what is happening is that you are running the input you receive from each prospect -- appearance, demeanor, personality, budget, requirements -- through a checklist of what you do and do not like in a customer. Only you are doing this subconsciously: you have never deliberately created such a checklist or set of guidelines, but your subconscious has: Based on years of dealing with good and bad customers, your mind has compiled a list of likes and dislikes and do's and don'ts it goes through when evaluating a new prospect.
Is this a bad thing? On the contrary, it’s a good thing: you're already doing, to some degree, what I've been advocating -- being selective about the kinds of customers you do and do not work with.
However, the problem with relying solely on your "mental checklist" is that it's easy to skip one or more items in your hurry to make a decision about a particular prospect. That's why I recommend creating a Desirable Client Profile as a tool to help you select those customers with whom you are most likely to build a good long-term relationship with and screen out those who are likely to become "problem" accounts.
Building the Desirable Client Profile: Monitoring Client Characteristics
The Desirable Client Profile is a checklist you use to evaluate prospects and decide whether they're a good "fit" for your product or service. There is no particular form I use or special format I can give you as an example, because the profile isn't that formal. All it is, is a list of points or questions against which you measure each potential customer.
Ideally the list should be typed or written neatly on one side of a single sheet of 8 1/2 x 11-inch paper and posted or kept in a place where you have easy access to it when potential customers contact you. If you have a notebook you use to track sales leads, tape or clip the profile to the inside front cover. If you do a lot of telephone selling, keep the list posted on the wall in front of your desk.
Okay. Let's say you want to build a Desirable Client Profile. What are the key points that should be covered?
The Seven Characteristics of the Desirable Client
There are probably dozens of criteria by which you can measure whether a prospect is a good potential customer for your business. But the most important qualifying characteristics fall into the following seven categories:
Level of client need
Type of client need
Type of client
Match between your product or service and the client's requirement
Let's build your Desirable Client Profile by looking at each of the screening factors in more detail.
Compatibility Criterion 1: Level of Client Need
Level of need means how seriously or urgently your prospective client needs what you are selling. A prospect's initial inquiry may be extremely casual -- perhaps nothing more than requesting a brochure out of idle curiosity -- or it may be highly specific: the firm needs a certain type of service and wants to evaluate whether you can fill that need.
Which type of prospect you feel is the best fit for you depends on the nature of your business. Most businesspeople would probably say they are primarily interested in dealing with customers who have a real and immediate requirement for their product or service. This leads to a faster sale and an opportunity to please the customer and establish a relationship.
Some businesspeople, on the other hand, are in fields where a longer "courtship" between seller and buyer is typical, and anyone "needing it tomorrow" is looked upon with suspicion and not taken as a serious prospect. An example would be the world of professional speaking. Most associations plan their annual conferences six to twelve months in advance or more. So if a speaker got a call from someone claiming to be an association executive, who said he was looking for a speaker to be on a program to be held in four weeks, the speaker might suspect something not quite right was going on.
Maybe the caller was someone who did not have the authority to hire speakers but was just curious to see what types of brochures professional speakers use. Or perhaps it wasn't really an association executive, but a competitor trying to get his hands on the speaker's media kit.
Most businesses, however, consider the best prospect to be a "serious player" -- someone who seems to have a genuine requirement for the seller's product or service and will need it now or in the near future.
Compatibility Criterion 2: Type of Client Need
What the prospective client needs quickly identifies her either as a hot prospect or a not-so-hot prospect. For instance, the other day I received a call from a corporate training director who said he was looking for a consultant to do an in-house training program. Great! I was excited because that's what I do, and it was an immediate requirement.
I asked what the topic would be, expecting it to be in my specialty areas of sales, marketing, and client satisfaction -- after all, why else would they call me? But my happiness vanished when the training director said he needed a training session on presentation skills. Unfortunately, I don't have a seminar on that topic.
When I explained that, the training director said, "Oh, well don't worry. Send me literature on what you do offer. I'm sure we'll have a need in the future." But this lead had gone from a 10 to a 1 on a scale of 1 to 10 -- from a hot prospect with an immediate need for my specific product to someone who had called the wrong vendor and now just wanted to collect a brochure so as not to make me feel disappointed.
The type of need the prospect has, therefore, is a major factor determining whether they will be a good or bad client for you. If they need a product or service you normally provide, then they would score highly on this portion of your Desirable Client Profile.
On the other hand, if they need a product or service you could provide but don't normally, they may not rank so high. You could make the decision to pursue the customer, take on their job, and then create a customized product or service to satisfy them. But do you really want to? Taking on such a customer will probably be a pain in the neck and may not be worth your while. So a customer who needs something other than your "standard" offering is not so desirable as the customer who is buying exactly what you're selling.
Compatibility Criterion 3: Type of Client
Some clients are good prospects for you. Others are not. So the type of person or company is a major factor in determining whether you want to work on or pass up the contract being offered.
Many companies that sell to consumers, for example, have established certain demographic and psychographic criteria against which they screen prospective customers and select which are likely candidates. For example, Club Med used to advertise primarily to singles, while Perillo Tours seemed to target the over-50 crowd.
For whatever reason, you may know that a person of a certain age, economic status, social background, political beliefs, or whatever wouldn't enjoy and benefit from what you are selling. So they are listed low on your Desirable Client Profile in this category. On the other hand, people who are of the age, income bracket, habits, social background, or whatever that would make them likely to enjoy and benefit from your product or service would rank high as desirable clients here.
It is the same with business prospects. In my consulting business, for example, I know that I do best when working with clients in industries where I have a lot of experience -- banking, computers, electronics, software, and so on. So when I get an inquiry from such a prospect, they rate high on my Desirable Client Profile: I'm really going to pull out all the stops to get them to hire me.
On the other hand, I know that prospects from industries that demand specialists and in which I am not a specialist -- fashion, cosmetics, packaged goods -- would not make good clients. First, it's unlikely they'll hire me in the first place, so the lead is not worth pursuing. Second, even if they hire me, I won't have the track record and experience they're looking for, and this will only cause problems later on. So when I get an inquiry from someone selling perfume or fashions, for example, I rank them low on my Desirable Client Profile and tend to shy away from them.
Compatibility Criterion 4: Buying Power
Buying power is a major factor determining whether a prospect would make a good client for you. The rule of thumb is simple: if they have the resources and budget to afford you comfortably, they'll probably become a happy and satisfied customer, all else being equal. That's because they're accustomed to paying the kind of money you charge for the level of service you provide, and your invoices will not represent serious financial hardship or strain for them.
On the other hand, the prospect who can barely afford your asking price, or for whom paying your fee is a hardship or a stretch, is more likely to be difficult and become dissatisfied. There are a couple of reasons for this. First, because paying your fee is a strain, he's going to become unhappy when he sees your bill. Yes, you told him the price in advance, but the client who wants you but really can't afford you has a way of "forgetting" money discussions until the invoice comes due. Then he asks why you have to charge so much, complains that he can't afford it or that you overcharged him, or begins to nitpick over your invoices item by item. This gets you frustrated; soon you're angry with the client and the client is angry with you -- a good sign that the relationship will not last much longer.
Another reason why prospects who can barely afford your product or service are not desirable customers is that they are more demanding than are those for whom the purchase is not a hardship. If you've been in business for any length of time, you've discovered this amazing but true fact: the client who readily agrees to your fee and pays your price is usually the most pleasant and least demanding. Conversely, the client who nickels and dimes you, pays your bills grudgingly, and feels the pinch of every penny is the one who's most demanding.
In a way, that's understandable: the "poor" client can less afford not to get the most out of every dollar than the cash-rich client. Be that as it may, however, this doesn't make the poor client a good client to work with. So another major factor that makes a client "desirable" is having the money to afford what you are selling.
Compatibility Criterion 5: Buying Authority
Just because someone appears to have the money to afford you doesn't mean they have the authority to spend it. For this reason, a key measure of the desirability of a customer is buying authority: Do they have the authority to go ahead and authorize the purchase of your product or service themselves? Or must they consult with a co-signer, partner, or corporate buying committee, or even a spouse or parent before they can sign on the dotted line? Here is an informal hierarchy of customer desirability:
The ideal, or most desirable, customer is the one who has ultimate buying authority and can sign your contract or cut you a check today if he or she decides to buy what you are selling.
The second most desirable prospect is the one who essentially makes the decision but may have to check with one or two people before you can get the purchase order or signed paperwork.
Less desirable as a customer is the person who has responsibility for buying your type of product or service but no real buying authority or clout, and must go through a long chain of approvals even for rather minor expenditures.
The least desirable customer is the assistant or go-between whose job is to act as liaison with vendors, collecting information, communicating instructions, and passing messages back and forth but who has no authority to buy, specify, or even recommend products or services.
The lower down your potential customer is in this hierarchy, the less desirable they are. Dealing with go-betweens can be frustrating and wasteful, because you can spend hours selling the person only to discover that your "real" customer has no interest in your product and never had.
This criterion of client desirability can also be applied to dealing with consumers. If you're a contractor, for example, and you are selling to a single person, you know that if you convince that person, you've got the job.
On the other hand, if you're dealing with a customer where the partner is the real decision maker, but your primary contact is with the other partner, you may never get to overcome the decision maker's objections or present the benefits of your offering to that partner, and your efforts may be wasted.
The higher up on the decision-making hierarchy the prospect is, the higher they should rate on your Desirable Client Profile.
Compatibility Criterion 6: Personal Chemistry
Personal chemistry is difficult to define, explain, or measure quantitatively. Yet you can judge it fairly accurately within the first three minutes of meeting the prospect in person or during your initial telephone call.
What it boils down to is this: Some people you take an instant liking to and know you can get along with: these people rate high on your Desirable Client Profile. Other people you take an instant dislike to: either they rub you the wrong way, or you just decide, based largely on instinct, that you're better off staying away from them. These prospects rate low on your Desirable Client Profile.
Other people you are neutral about: no strong feeling one way or the other. These prospects get a medium rating on your profile.
Personal chemistry is probably more important for someone rendering services to clients than for someone selling a product. But if there is to be an ongoing relationship necessitating frequent contact between you and the customer, then personal chemistry is definitely a factor, and you should not ignore it when selecting which clients to work with and which not to.
Compatibility Criterion 7: Match or Fit With Product or Service
This has to do with the prospect's particular application or situation. It is probably the least important of the seven criteria, but it still should be considered when evaluating any new potential client.
"Fit" refers to how well your product or service can satisfy the specific requirement or application of a given customer. Sometimes you find your product or service is a "natural" fit to the client's requirement. Great! That client rates high on the Desirable Client Profile scale.
For instance, one of my colleagues, a successful consultant, has a gruff, almost abrasive manner when dealing with clients. This is because, unlike many of his peers who try to be diplomatic or avoid offending clients, my colleague feels the only way to be effective is to be totally honest and blunt: no pussyfooting around. Some clients appreciate his candor and value him for it. Others are turned off by it and won't put up with it.
His service, then, is a good fit for clients like owners and entrepreneurs who want the truth and are concerned only with making money from his excellent advice. His service is not a good fit for middle-level corporate managers who risk being embarrassed by his abrasive manner and having him insult their colleagues and superiors when he must present his recommendations in a workplace meeting.
Rather than fight this, the consultant recognizes this, and has written his marketing brochure to make the fact clear up front. He is open and candid about his to-the-point way of dealing with people and suggests that those who don't like it or have to be concerned with "pleasing a boss" not hire him.
That may sound arrogant, but in fact, it's sound business practice. He is ensuring a much higher client satisfaction rate than he would otherwise get. He accomplishes this by selecting, in advance, only those prospects who are an excellent fit for the way he renders his service and conducts his business.
Were he to take on non-ideal clients, he would end up in a lot of fights, offending a lot of people and having to chase after them to get his invoice paid. Instead, he deals only with like-minded individuals and, as a result, has excellent relationships with clients who are willing and happy to put up with his idiosyncrasies in exchange for his superior level of advice.
Screening Potential Clients Using the Desirable Client Profile
In its most basic form, the Desirable Client Profile consists of these seven questions:
Does the prospect have a genuine need and, if so, how urgent is that need?
Does the prospect have a requirement for the specific types of products and services we sell?
Is this the type of person or firm we like to do business with?
Can they afford us?
Does this person have the authority to make the purchase?
Is there good personal chemistry between our people and the prospect?
Is our service or product a natural "fit" with the prospect's unique requirements, or would they be better off getting it elsewhere?
With each prospect you are considering taking on as a customer, ask yourself these seven questions. If most of the answers are positive, the prospect is desirable as a customer and should be taken on, if you can get the contract. The positive answers point to a good, long, happy working relationship.
On the other hand, if most of the answers are negative, think long and hard before taking a down payment from this buyer. You may want the money now, but it may not be worth the aggravation and heartache later on.
For a slightly more precise rating method using the Desirable Client Profile, follow the instructions in Exhibit 2-1.
Exhibit 2-1. Desirable Client Profile
INSTRUCTIONS: Rate the prospect according to these seven criteria using the following scale:
5 = Agree strongly
4 = Agree somewhat
3 = No strong opinion either way
2 = Disagree somewhat
1 = Disagree strongly
1. The prospect has a definite and urgent requirement.
5 4 3 2 1
2. The prospect is a candidate for using one or more of the specific products or services we sell.
5 4 3 2 1
3. The prospect fits the profile of the type of individual or company we like to deal with in terms of demographics, psychographics, job title, job function, industry, geographic location, and so on.
5 4 3 2 1
4. The prospect can readily afford the fees we charge for our product or service.
[J5 [J4 3 2 1
5. The person to whom I am speaking has the authority (or can easily get the authorization) to purchase our product or service.
5 4 3 2 1
6. I have a good feeling about this prospect. I like him or her and feel we would work well together.
5 4 3 2 1
7. Our product or service is a good match with the prospect's requirement and can serve them much better than other products or services on the market can.
5 4 3 2 1
Write your total score here:______________________________
The prospect is highly desirable and would make a good customer. The relationship would probably work out well, be mutually beneficial, and be relatively free of problems and conflict.
The prospect would make a decent client, and the sale should be pursued. But, keep on the lookout for signs that would indicate more potential future difficulties than the initial profile indicates. If no such signs show up, the relationship will probably work out.
You have doubts; many signs indicate that this prospect is not a great match for your business. Proceed with caution. If you can work out or ignore the differences, pursue the sale. If things go from bad to worse, get out.
This prospect would not make a good client, and you should consider passing on the business, possibly referring it to a colleague who is more suited to handling this type of prospect.
What if You Can't Be As Selective in Choosing Clients as You Would Like?
As previously stated, you may be thinking, "This idea of being selective and choosy about your customers is fine and good for those who have more business than they can handle. But our industry is in a downturn right now, and we need all the business we can get. So does the Desirable Client Profile really apply?"
Yes, but with a slight modification. You should still establish a Desirable Client Profile checklist so you have rational guidelines for selecting customers and clients whom you are likely to be able to satisfy both over the short and long term. After all, client satisfaction is the name of the game.
At the same time, during an industry slump, recession, slow economy, or personal business downturn, you obviously can't be as choosy as you like. Rather than throw out or ignore your Desirable Client Profile, use this strategy: You slightly downgrade your Desirable Client Profile until business improves, then reactivate your original Desirable Client Profile when things get busy again.
This means you don't throw out your standards in a soft economy, but you do relax them to a degree. How much you relax them depends on how slow things are and how much business you need.
For instance, if you downgrade your Desirable Client Profile slightly, and the slight lowering of standards allows you to reach enough prospects you wouldn't ordinarily deal with to get you busy and profitable again, then that slight downgrade is all that's needed.
If you downgrade your Client Profile slightly and the new business it opens up to you is still not enough to make up for lost sales, then you downgrade it even further, gradually until it's at a level that works for you.
For instance, if you have a house cleaning service and you normally charge a minimum fee of $60 and clean no house smaller than three bedrooms, and the recession has caused many of your customers to cut back on using your service from weekly to monthly, you need more business. So you might lower your minimum to $50 and agree to do smaller houses, but you probably wouldn't lower your minimum to $20 and agree to do studio apartments: it's just not worth making the trip out to the customer's home. So you lower your standards slightly, but don't throw them out all together.
During a soft economy you want to be flexible and accommodating, not rigid and unyielding. Treat the Desirable Client Profile as a set of helpful guidelines for choosing clients, to be modified as circumstances dictate, not as a set of commandments etched in stone.
Using Sales and Marketing to Upgrade Clients Along the Desirable Client Profile
When you use the Desirable Client Profile (Exhibit 2-1) to rate clients, you will find a portion of your clients falling into the top category -- let's call them A clients. These are your top clients, the best you have, the ones you want more of.
Another segment of your client list will fall in the second category; label them the B clients. As the grade implies, B clients are good clients but not great clients. Still, they are worth having.
A third segment, the less desirable clients, are the C clients. This is the third category on the rating scale in Exhibit 2-1.
And finally, a small portion of your clients will fall into the fourth category of least desirable. Let's call them D clients. These are the ones you tolerate because you've had them a long time, or they're good references, or you need the money, but often you dream about getting rid of them, if only you had more A and B clients.
Ideally, your goal would be to get rid of D clients, convert C to B clients, convert B to A clients, and get more new A clients. The result of this would be a roster of mostly A and B clients. And with better clients, you'd have fewer problems and a much higher overall rate of client satisfaction.
How do you do this? By marketing and selling your product or service aggressively on a daily basis. Many people mistakenly think marketing and selling are something you do only when you don't have business and need more of it. But while marketing can give you more business, it can also give you something just as important: freedom of choice.
Remember the supply and demand equation. When you need business, the clients are in the driver's seat. But when you have more business than you can handle, you can be more selective and choosy in who you take on as a client -- and who you do not.
An ongoing sales and marketing campaign, applied rigorously and on a daily basis, can fuel demand for your product or service, giving you more sales leads than you can handle. With more leads than you can handle, you can afford to be choosier about which leads you pursue -- and which you don't.
As you convert more of those leads to sales, you gain new customers -- so many that you can't handle them all. At that point, you begin to say to yourself, "Hey, with all this business, I'm not sure I want to continue working for Joe Shmoe Company any more. They've always been difficult, lousy, bossy, and demanding, and they want everything as cheap as possible. I needed them when things were slow, but now, business is booming, so perhaps I should resign the Joe Shmoe Company account."
Whether you do or not is not the issue. The point is that when you have more business than you can handle, you can begin to improve your mix of clients as represented on the Desirable Client Profile. When you can literally afford to turn away one, two, or more prospects or even current clients, you can get rid of some of the C and D clients in favor of new A and B clients.
People in business often ask me, "When is it okay to confront a lousy client and tell them you can't put up with them any more?"
My answer is: When you are willing to risk not having their business anymore and feel you can do so comfortably, both financially and psychologically. An aggressive sales and marketing campaign can make the demand for your services exceed the supply, giving you the freedom to pick and choose the clients you want to do business with. It's a wonderful feeling -- and one of the primary benefits of active, ongoing self-promotion.
Your goal concerning client satisfaction should be always to upgrade your client mix so you have more A and B clients and fewer C and D clients. Remember, the key to having more satisfied clients is choosing the right clients in the first place.
How to Say "No" to Customers You Are Turning Away
Being selective about the customers you choose to do business with naturally means there will be some customers you will be turning away. It's important that you do this as politely as possible without making the person feel inferior or rejected in any way. The reason is that some day this person or company may be in a position to hire you, may become an A or B prospect, and they will remember how you treated them. It never pays to treat people shabbily. It never pays to burn bridges.
So how do you say no to a customer without letting them know outright that you consider them not worth doing business with? Don't tell them about your client profiles and whether they rated a B, C, D, or whatever. Instead, make an excuse based on your not being available or able to help them.
For instance, if a client wants to hire you and you don't want the business, say, "I'm sorry, but we just took on a big project for IBM, and so we would not be able to handle your assignment. But do think of us again in the future." Or if they are ordering a product, say, "I'm sorry, but we are short of stock on that item and have reserved it for a big shipment to AT&T. After that, we may not be carrying it. So you may want to check another supplier."
An alternative is to take the business but at a price or on terms that make it worth dealing with a less than ideally desirable customer. For example, you could quote a higher than normal fee, and if they accept, then the extra money compensates you for the trouble of dealing with them. Or if you think they are likely to give you a hard time over paying your invoice, you can simply say your policy is payment up front. This eliminates billing complaints and collection problems later on.
Some C and D customers, even after being turned down, will still try to keep you on the phone, pump you for information, and pick your brains for free. If you render services and get paid by the hour, it's perfectly all right to say, "I normally charge X dollars an hour to give such advice; however, I'll give you five minutes free starting now." Answer their questions for the five minutes and then explain you're busy and must go on to other projects.
Similarly, if a client who is not a desirable prospect and with whom you do not want to do business keeps . . .
. . . end of free sample chapters
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