Welcome to the August 2019 edition of ‘Terrific Tips’ delivered to your desktop free each month.
One of the themes running through this month’s edition is the power of simple, easy to relate to and repeat stories to get you and your business noticed, remembered, trusted and preferred. And isn’t that the number one objective for your business?
Even if you are not involved directly in sales or marketing do read the article on Customer Acquisition Cost. It follows on from last month’s article on Lifetime Value of a Customer.
4 Simple tips to motivate and manage people
“If it wasn’t for all the hassles with staff the job would be easy!” …. Ever caught yourself saying that or even thinking it?
If so, you are not alone. It is something I hear from managers all the time. So what are the tools you need to discover (or re-discover) to help you manage and motivate your team .… without feeling totally drained from your efforts?
Here are four simple suggestions:
What is the least spoken language in the world?
Do you know? Scroll down towards the end of this newsletter for the answer.
Is training really the answer?
It’s a bit sad that I found myself nodding in agreement as I read a short article by workplace culture expert Steve Simpson titled Why Training Doesn’t Work.
At Terrific Trading, we are regularly approached about training for workplace teams in customer service, selling skills or dealing with difficult customers. When we ask about the reasons for the request it is not unusual to discover that there is an issue with one employee and the manager doesn't have the skills or confidence to performance manage this. When this happens training is not the answer and we are quick to alert potential clients to this.
Even if training is at least part of the answer, management clarity of purpose and commitment is required prior to the training. By this I mean managers considering training for their team have to be clear about their answers to the following questions:
The lessons from this are:
To achieve the second point, firstly have a discussion with the participants – whether they have requested the training or you have identified the training as a need. This discussion will cover what the training involves, how they and the organisation will benefit from the training and any impediments to applying the lessons learned on their return to work.
Secondly, have a focussed discussion within two or three days of them undertaking the training to discuss what came out of it, how this can be applied and how to share ‘the learnings’ with colleagues who didn’t attend.
Too often managers aren't aware of, and don't see the importance of finding out what the training involves. And are 'too busy' fighting fires or attending meetings to invest a little time with the 'trainees' prior to and after their training to discuss outcomes and application.
As with anything in your business, to be successful, training requires management commitment, not lip service.
The power of story – A tale of two MBAs
This 3-minute bicycle story from Neal Bearsdon wonderfully illustrates the power of story to get you noticed, remembered, trusted and preferred. Listen through to the end to pick up the additional benefits of a well-told, easy-to-grasp story.
What is your story?
Oh, yes you do have one. It may seem insignificant; perhaps as insignificant as a ‘Capo d’astro bar’.
What’s that? I’ll let Vanni Banducci explain. Do read on, it will only take 3 minutes.
Click on finding your Capo d’astro bar.
My thanks to Steve Harris of The Brand Agency for sharing this inspirational case study.
‘Why focus on the customer experience? - part two
It’s made me even more aware of the number of business people struggling with themselves on whether they can afford to put time into identifying and consistently meeting customer expectations. And the many others looking for research and case studies to win over a business partner, boss or management committee about the importance of their organisation investing in the customer experience.
Here’s a customer service statistic that should stop the doubters in their tracks:
47% of customers say they’ll stop buying from a company if they have a below average experience. The same study reveals that 76% of customers now say it’s easier than ever to take their business elsewhere and they’re doing so in increasing numbers.
According to another recent study, 91% of customers who are unhappy with a brand will leave without complaining. This process of ‘quiet abandonment’ is costing many businesses heaps of money every single day.
Read 40 Customer Service Statistics to Move Your Business Forward to identify more statistics, and the sources of the research.
Remember though, that a story, an example that illustrates your point will make any statistics you use seem more real. That’s why I continue to share ideas, anecdotes and examples in your monthly Terrific Tips newsletter.
Customer acquisition cost
Towards the end of last month’s article on the Lifetime Value of a Customer, I mentioned the importance of understanding your ‘customer acquisition cost’ and said I would explain what I meant by that in this month’s edition.
Customer acquisition cost refers to the cost of acquiring a new customer for your business. This is the cost of your marketing, advertising, promotions and direct sales efforts. It can include events, product giveaways and the salaries of sales staff and is averaged out on a ‘per customer’ basis.
For example, let’s say you spend $1,000 per month on these marketing costs and typically acquire 10 new customers per month. This means the acquisition cost is $100 per customer ($1,000 divided by 10). However, if you only attract two new customers per month then the acquisition cost is $500 per customer.
Is this bad?
It depends and will vary considerably according to the type of business. Your decision needs to take into account the Front-End, what you make on the initial customer purchase and the Back-end, what you make on subsequent purchases. The combination of the two gives you the lifetime value of a typical customer for your business.
If you are in the tourism industry providing hot air balloon flights you will need to make your money at the Front-End because you are unlikely to get repeat business.
On the other hand, if you are a hairdresser or an insurance company you can take a longer term view… provided you have an excellent customer nurturing and customer retention policy.
For example, some years ago we worked on improving the customer experience with an insurance company. They explained to us that due to the high Customer Acquisition Cost in their industry it wasn’t until the third year that a new customer became profitable.
They had an unusually high attrition rate of customers at the end of Year One and Year Two, far higher than the industry average. So for them, improving the customer experience to ensure customers felt looked after and appreciated and stayed well beyond Year Two became top priority.
The message from this is, look after the customers you’ve got. You have already invested in acquiring them. Make sure you give them reasons to stay with you. The added benefit is they then become your word-of-mouth ambassadors… reducing your acquisition costs!
Have you ever wondered?
Why ‘abbreviation’ is such a long word?
Could this be why you’re not making money?
One of the big challenges for far too many people in small business is that they are busy, busy, busy generating income and looking after customers but… they aren’t making any money. Not only are they not making a profit, they are not even drawing a reasonable wage.
This is something my colleague Jan Collins and I often talk through with clients to get them focussing on their profitable customer segments. How do you start that process?
Business Performance coach Dawn Russell put’s it clearly and succinctly in an article on why you’re not making money and how that can change.
What is the least spoken language in the world?
A lot of people don’t do well simply because they major in the minor things. Don’t mistake movement for achievement. It’s easy to get faked out by being busy. The question is: busy doing what?” Allan Dib author of ‘The 1-Page Marketing Plan’
“I wish managers had the courage to slow down, know less and learn more. When you get speeded up you lose the willingness (and ability) to listen. When you stop listening, you stop learning. When you stop learning, you stop growing. When you stop growing, you're toast!” Bill Marvin
“We can only begin to tell our story effectively when we understand the story of the person we’re trying to attract and delight. Who exactly is your right customer and why will he choose you?” Bernadette Jiwa
Have a wonderful month.
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