Make it easy

In a seminar I did about a year ago I used the term “barriers to buying”. It struck a chord with many in the audience, and I received a lot of feedback about how it had opened the eyes of many of the attendees.

I was referring to how we as business owners consciously or subconsciously put obstacles in front of our customers.  We have random rules, strange hours, no real online information and indifferent staff.  Sometimes I’m amazed that we have customers at all.

What we should be doing is making it as easy as possible for people to do business with us.  Law #8 – Make it Easy – is a marketing tool you can implement today with little to no cost.

Look at your buisness from the outside in. Why do you have the hours you do? Are they convienent for you or your customers?  What about your return policy, your credit policy or your delivery service?

Remove as many barriers as you can and you will find that this can become a competitive advantage. If your products and services are primarily the same as your competitors, making it easy to buy from you may be the edge you need.

Be consistent

Being consistent is law #7 in recession proofing your business.

There are three main areas you need to be consistent:
1. Your service
2. Your advertising
3. Your quality

Service
There is nothing worse for a customer than to receive mixed experiences. One day they receive great service the next visit it’s bad. This causes the customer to rethink their decision to buy from you and to start looking for alternatives. Now you’ve opened the customer up to receiving messages from your competitors.

Advertising
In my post “The 5 Stages of Buying“, I showed how customers and prospects go through stages when making a purchase. You need to keep your message in the marketplace on an ongoing basis so when someone is ready to buy, your message will get through.

Quality
You can’t market a bad product or service. Quality is critical in securing repeat customers. If your product or service continually under performs, your customers will look for other options.  Buying from China to save a few bucks could cost you substantially more in lost customers.

Know your moments of truth

Law #6 – Moments of Truth.

This originated with the former president of Scandinavian Airlines Jan Carlzon, where he discovered that every time a customer interacts with a business there is an opportunity to grow the relationship or to destroy it. He called these moments of truth.

So take a minute and look at your business. How many touch points are there?  How many do you have control of?

There is a simple exercise you can do to look at your business through your customers eyes. Moments of Truth tend to fall into six main categories (see below).

1. Draw a circle on a piece of paper, but leave a small gap at the top of the circle.

2. Starting on the right side and going clockwise – start to list all of the touch points for each of the steps below

a. Start with – Initial contact – how do customers find you or find out about you?

b. Next – Problem Solving – what is the process you put customers through to understand their needs?

c. First Use – what does the customer go through? Is there assembly required – how easy is it to understand?

d. Further Purchases – how easy is it to reorder?

e. Ongoing Support – what happens when something goes wrong?

f. Recommendations to others – How do you nurture referrals?

After you have listed all of the touch points, go back over each one and determine the level of service you want to deliver every time.

This is a great exercise to work on with your staff.

Compete on more than just price

When the economy slows the easiest thing to do is to lower your prices.

This is a big mistake, and one you may never recover from.

Price cutting is a bad idea.  Many industries have created a very difficult situation for them selves by always having sales and price cutting.

Most of the people that don’t buy because they say your price is too high, are really not buying because you haven’t sufficiently demonstrated value.

Cutting price almost never leads to new sales. Unless someone was already planning on buying in the first place, price cutting doesn’t work.  Not only doesn’t it work, it’s also very destructive to your profits.

Example

Product is priced at $100.
Your cost is $70 (this is a 30% margin).Because sales are slow you put the product on sale for 20% off so you now sell the product for $80. Your profit is now $10.
So a 20% price reduction = a 66% cut in profits.

Now that’s bad enough, but here’s the really bad part, once you lower the price, you’ll find that you need to keep it priced lower to maintain future sales. So your $100 sale is now $80.

Cut the price again for the next sale and guess what, your profit is zero.

Believe it or not it gets worse.

The next step is that your competitors now decide to lower their prices. Can you survive a price war? Unless you are the lowest price in a price war, you’re helping your competitor sell more.

So here is the scenario you’re facing:

1. The economy slows, so customers become more price sensitive and are slower to make buying decisions

2. As you start to feel the sales crunch you decide to offer a price discount

3. Customers that were already going to buy take advantage of the price discount

4. Your profit margins begin to sink, and now you have less money to invest in marketing or in training your people or in improving your products and your overall business

5. Your competitors also lower their price and you have to continue cutting your price until your profits are at zero

6. Unless you are the lowest price you’re actually helping your competitor sell more

Not the greatest situation is it?  Price cutting has always been seen as the lazy way out.  Management Guru Michael Porter says “cutting prices is usually insane if the competition can go as low as you can.”

So what do you do?  Here are three suggestions:

1. Better explain the value of your offering – find out exactly what your customers want and then work to deliver on that.

2. Bundle or package products and services to maintain higher prices

3. Do something special – go to your best customers and create an added value offering to solidify their loyalty

The bottom line is if your business exists strictly as a me-too, you have no choice but to compete on price. Price is only an issue in the absence of value. If you haven’t taken the time to truly understand the wants and needs of your customers and to properly demonstrate that you can deliver, then price cutting may be your only option.

It’s a lot of work to compete on value, but especially in times of economic uncertainty, it’s more important than ever.  Remember it’s not the product or service and the associated features people are buying; it is the solution to their problem or the satisfaction of a need or want.  Focus on that before cutting your price.

Be relevant

Today we’ll look at the fourth law of recession proofing your business: being relevant.  This might be the most important law.

Each of us are exposed to hundreds and hundreds of messages a day, some people estimate it to be up to 2,000, and our brains block most of them out.  So when you create your print ad, radio spot or direct mail piece, know this; most people will ignore it.

I discussed briefly how the brain processes information in an earlier post.

One of the biggest mistakes you can make is thinking you’re reaching everyone with your advertising. You’re not. Only those individuals that have a specific pain issue that you can solve may consider your advertising.

Your job is to create a message that means something to that small group that has pain now.

When crafting your message, speak in the customers language.

Talk to your customers and listen to how they describe the problem they are trying to solve.  They probably don’t use industry terms or jargon. Also talk to your customers to find out what the number one pain issue is. You might be surprised.

Show the customer proof that you can and have solved this problem before.  Make it easy to contact you and make it easy to buy.  Be consistent with your message and frequency (law #7) and please don’t be boring – make it interesting and surprising.