No one likes to sacrifice. Yet, most businesses ask their customers to make sacrifices every day. Consider this overheard conversation between “Boomer,” a counter salesperson at Average Electric Supply, and Jack, a journeyman electrician for Leviathan Contracting.
“We don't take that card,” Boomer says.
Jack replies, “No problem,” but mentally he deducts twenty points off of his internal customer service scale. You know the scale. It ranges from, “Wow, that's extreme service” to, “I'll never set foot in that place again!” Average Electric Supply falls somewhere in the middle and really can't afford to lose any points.
At least Boomer is aware enough to sense Jack's irritation, so he offers an explanation. “You see, that credit card charges a higher merchant rate, so by not taking that card we can keep our prices lower.”
“Z'at right?,” Jack replies while sliding his cash across the counter. “That's funny. Your competitors take that card and their prices aren't any higher than yours.”
In this case, if Jack wants to shop at Average Electric, he has to sacrifice using his preferred credit card. Big deal… a “cash customer” makes a sacrifice. How much impact will that really have on the bottom line? Well, if it were limited to that one transaction, not much. But Jack is more than a cash-and-carry weekend warrior. He's the lead electrician for the largest contractor in town. Jack can influence buying decisions that the business owner makes in a big way. Suddenly, that one little sacrifice you're asking a customer to make turns exponential.
The Cost of Sacrifice
Sacrifices negatively impact a customer's time, money or convenience. Almost all businesses demand some degree of sacrifice from their customers, and most businesses have perfectly sound reasons for doing so. I'm not saying they aren't reasonable. I'm saying that customers don't care.
Business owners try to justify the sacrifice, as in the case of Boomer trying to explain why his company doesn't take Jack's credit card of choice. And as Jack replied in so many words, “That's your problem, not mine.” Besides, it's not Jack's job as the customer to guarantee the size of the distributor's profit margin.
Most businesses don't recognize the sacrifices they ask their customers to make, because they see them as minor inconveniences. Perhaps they are, but accumulate enough of them and soon you'll be sacrificing customers.
Recognizing the symptoms
What sacrifices do your customers make to do business with you? To identify a customer sacrifice, there's a way to do a quick audit of your sales counter and showroom. Look at the three “Ps” — people, products and performance.
For five years the salesmen at a small supply house where I used to work complained about J.B., the sole counter salesperson. He was taciturn, surly and unhelpful toward our customers. The manager would simply brush off our complaints by saying, “J.B. is okay once customers get used to him.” Here's the first clue: Customers shouldn't have to get used to someone who is surly, unknowledgeable and inattentive. That's a sacrifice.
So how did J.B. get the job in the first place? The same way a lot of people in the electrical industry get promoted — longevity. He had worked in the warehouse until a new warehouse person was hired. The natural progression is “warehouse-to-counter.” No test required. The only flaw with that system is that sometimes the employee isn't suited for the job. J.B. was a deep introvert and didn't really enjoy being around people. He didn't know how to talk to the electricians who came into the store and certainly wasn't able to cope with their sardonic banter. It wasn't until a new manager came on board that J.B. was removed from the counter and found a job in a completely different industry where his contact with people was minimal.
Not only is it important to have personable, savvy sales counter sales people, it's equally essential to evaluate and educate the back-up crew — those folks that help out on the counter whenever it gets busy. Cross-training should be standard procedure for ensuring that everyone can properly serve a customer at the sales counter, thus reducing customer sacrifice and the inconvenience of long waits.
Most distributors quickly learn the brand preferences of their customers, especially when it comes to hand tools. Yet, some still insist on carrying other brands based on rebates, dating or pricing. And that's fine if you carry the preferred brand as well. But if you don't give customers a choice, someone else will. Besides, if the tools don't sell, that “good deal” doesn't really matter.
Inconveniently displayed merchandise leads to another form of customer sacrifice. If you keep your test instruments and power tools under lock and key, not only is it inconvenient for you and your customer, it also sends the message, “We don't trust our customers.” Trust is the most powerful tool in building loyalty. Yes, theft is a real issue, but I've yet to see a significant shrinkage percentage that wasn't substantially offset by the extra profits that result from an open sales counter.
This is about your processes, procedures and policies. It's about how quickly you can serve a customer entering your door to walking out with a complete order. It's about having the will-call order ready when the customer arrives to pick it up. It's about every counter salesperson being empowered to handle returns, pricing and other incidentals so no one ever has to say, “Sorry. You'll have to talk to the manager about that.” It's about not hiding behind company policy when rules need to be bent and exceptions need to be made. It's about each company representative being able to discern the right thing to do to take care of the customer.
What's the difference? There are other aspects to the issue besides those mentioned above. Strategic Horizons, a consulting group, has identified 55 dimensions so far. Basically, customer sacrifice is the difference between what a customer wants and what he or she is willing to accept. It's the by-product of delivering average service rather than an exceptional customer experience. Customers are increasingly becoming more selective about where they spend their money, and they're certainly not expecting to make sacrifices.
You know it's less expensive to sell more to the customers you have than it is to get customers to replace them. Learn to ask the question, “What sacrifices, known or unknown are we asking our customers to make when they do business with us?” The better you understand what your customers expect, the more steps you can take to meet their needs for your products and services. Decrease sacrifice and you'll increase loyalty. That may seem like a small step but it's a giant leap over the average electric supply house.
The author is the founder of High Voltage Performance, a consulting firm that specializes in designing customer experiences for the industrial marketplace. Dandridge has 25 years experience in electrical wholesale distribution. He is also authored the book, Business Turnaround. Mike is available for speaking engagements and can be contacted by phone at 254-624-6299 or by email at [email protected]. Read more about his idea for Customer Experience Architecture at www.highvoltageperformance.com and check out his blog at www.businessturnaround.blogs.com.
Do You Ask Customers to Make Any of These Sacrifices?
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