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What’s the Difference? Pt. 2 June 19, 2008

Posted by Amanda in Business Tails, Mouse Clicks.
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BizMouse Sporting GoodsOn Monday I wrote about differentiation strategies to help your small business stand out from the crowd. 

(Read Part 1 Here

The strategies I mentioned focus on the big picture.   But what if there is more than one business in your area.  For example, two sporting goods stores that are both focused on having the best service possible.  How do you make your customer service be a homerun?  Well, you need to look at your business at every step of the customer relationship.

Peter Griffin over at Flyingsolo wrote a great article about how to break down your busines process in what he called the “Seven Step Customer Care System”. His focus is on high service businesses such as Finance and Banking, but we can break it down for our Sporting Goods store.

1. How is the service delivered?

Do your customer service representatives smile when they are talking with the customer?  Is it easy to find a customer rep?  If they have to go into the storeroom to look for a product, do they return quickly?  This is the most visible part of customer service and an absolute must if you want to compete in service.  Your customers should enjoy visiting the store. 

2. Does your service enhance the experience?

Are your employees knowledable about the products?  Can they inform the customer about the products features and usage?  Now, this won’t be needed for every baseball, but if a customer is buying an automatic baseball pitcher, they might have a few questions about it that can’t be answered by the box.  Encourage your employees to use your products at home, or even have field days where you show them how to use more complicated products.

3. How do you communicate throughout the buying process?

Even if you have great floor representatives, make sure your Point of Sale staff is up to speed as well.  They should be knowledgeable about the current promotions and able to answer any questions the customer may have (or know who to ask to quickly get the answer).  They should be able to explain to the customer how discounts are applied and what their final total will be.

4. How do you complete and mark a transaction as completed?

What types of payment does your store accept?  Is it what the customer wants to use to pay for his/her large purchase?  Are they given all warranty information and is it explained?  Does a customer rep help them load the product into their vehicle if it is large (and please, don’t make them stand there for an hour waiting for someone to come help)?

5. How do you thank the customer for their business?

Do you reward customers for shopping with your Sporting Goods store?  Coupons for steady customers?  Or maybe just a thank you  and followup letter if they have made a large purchase.

6. How do you treat the customer after their product or service is delivered?

If a customer has a problem, can they bring the product back with minimal hassle?  If they have a question, can they call and ask?  What are you doing to make sure they are happy with their purchase.

7. How do you stay in touch with the customer?

The whole point of good customer service is to keep the customer returning to shop with you.  How are you encouraging them to come back?  Do you call and follow up to see if their automatic baseball launcher is working great?  Do you ask for feedback from them on their experience?

 

 

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What’s the Difference? June 16, 2008

Posted by Amanda in A Better Mouse Trap, Business Tails.
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What makes a small business grow into a big business?  Is it how much money you spend on advertising?  Or maybe it’s how hard you work at growing it…  What really makes a small business take off and become “big business” is simple.  Differentiation.  Your business has to be unique (and that means unique in a good way).  You have to be doing something that others aren’t, filling a need that others do not.

Jack Trout wrote about this recently at Forbes.com (read the article here).  He talked about why so many CMO’s “move on” after only a short period on the job.  They are not successful because they fail to focus on differentiation  The same can be applied to small business that is trying to grow.  If you do not seperate yourself in the mind of the consumer, you are disposable.

Now, how CAN you differentiate yourself?

You could be the lowest priced.  Price differentiation is a common strategy and it’s how Walmart and Amazon have grown to be so large. BUT: Can you compete with the Walmart of your industry?  Companies like Walmart use Economies of Scale to push prices low; they can get lower prices on what they buy because they are already so large.  That allows them to pass that savings on to the consumer and still make a healthy profit.  Also, it is very easy to duplicate a price differentiation strategy. 

You could have the best service.  Zappos is known for its service.  They have seperated themselves from other online shoe retailers in the mind of their consumers.  If you are unhappy with your Zappos shoes, they don’t fit, just return them!  You can call and chat with their friendly customer service representatives for an hour if you wish.  BUT: Providing great service often means hiring great people.  Maintaining a top workforce is an expensive proposition, but your customers will reward you with loyalty.  Again, this is a strategy that is reproduceable by others.

You could make a product no one else does.  I’d like to call this the ‘Next Big Thing’ strategy.  This is one of the easiest and fastest ways to stand out in the mind of the consumer, but it can also be the most difficult.  This differentiation strategy relies on your product being significantly different from anything else on the market.  Whether that means your product is more durable, easier to use, has better features or serves a need that no one else does yet.  This is a highly sucessful technique BUT: You have to come up with the idea and the customer has to believe that your product is different.

You could serve a need that no one else does.  This is known as Niche marketing, as I mentioned in my previous post about M&D Innovations.  This is also called Focus Differentiation.  It has so many names because it is such a great strategy.  BUT: You have to listen to your customers. 

What’s the best strategy for you?  Well, that depends on your business but it is normally a combination of these four strategies.