Entrepreneurs and new business owners often fail to appreciate the difficulty of attracting new customers. Entrepreneur magazine refers to this as “field of dreams marketing.” It is assumed that unlocking the shop or advertising a service will result in customers coming through the door or ringing the phone. In reality, however, getting new customers is an expensive and lengthy endeavor.
This is why experienced businesspeople will do all they can to hang onto a customer once they have one. It is significantly cheaper and more effective to keep an existing customer than get a new one. That does not mean it is easy to keep them though. What are some best practices for building shopper loyalty?
First, great companies know what their customers want. This does not mean successful entrepreneurs must be telepathic. Nor do they need to give every customer a survey at the cash register (please no more). In retail, most customers are signaling what they expect when they walk into a store. If it is a clothing store, they just might be there for some clothes. If it is a coffee shop, guess what? They want coffee.
Businesses occasionally spend far too much time and money on the assumption customers might want something other than the items already on the shelf. Nobody proves this point better that Google. One of the most successful companies of our time still rolls out their flagship product as a simple search field in the center of a big white space. They know people who go to a search engine just want to search.
Second, great companies give their customers what they want. If a customer enters an electronics store to purchase a phone and the clerk spends 20 minutes trying to sell her a tablet, selfie-stick, or camera, then the customer’s satisfaction level will be low. Perhaps she will purchase the phone, but she will not be eager for a return trip. Had the clerk simply sold a great phone, the customer just might have popped back in sometime for that tablet.
Today’s shoppers value their time, are well informed about products, and typically know what they want when they enter a shop. Major American cable companies are learning this the hard way as customers leave them in droves for smaller, nimbler streaming services that will simply give them what they want without pressing them to pay for many channels they have no interest in.
Third, successful businesses give customers more than they want. This is not the same as selling them more than they want to buy. For example, if you walk into the Asian coffee retailer J.Co and order a cup of coffee they will give you a donut too. Surprise! No one complains about a free donut. Even customers who refuse it for health reasons will be impressed that it was offered. That extra benefit, although small, draws people back. Giving away donuts is much cheaper than advertising for new customers and it eventually increases sales.
How to apply this principle will depend on the particular business. A cleaning company can refill the bathroom soaps, a bakery can include a serving knife, and a dress shop can give away a nice garment bag. To be most effective, these should be unadvertised surprises. They are not a benefit the customer is paying for; rather they are examples of going above a beyond. These little extras increase customer loyalty and will improve sales.
Fourth, the best companies give customers an excellent value on what they want. There are few shoppers in this world with truly unlimited budgets. In reality, most people are motivated by good prices. Walmart climbed to the top of the retail world with its motto, “Always the lowest price. Always.” This does not mean a business should strive to be the cheapest option every time. However, it does mean that customers should never be overcharged and pricing schemes should be clear.
Start-up companies are sometimes tempted to overprice goods and services because they are desperately trying to build good income streams. This is a temptation that must be avoided. Customers who feel they are getting what they want at a reasonable price will likely return for more. If they do, it will not take long for new businesses to grow a healthy income.
Knowing what a customer wants, giving it to them (with a little extra), and at a good price will draw them back again and again. Implementing these ideas is not rocket science. New business people can find inspiration by imagining themselves on the other side of the counter. What would they want if they were doing the shopping?
“Do unto others as you would want them to do unto you” is a great rule for building customer loyalty. The results can be truly golden.
GM’s new $3B commitment to Michigan means thousands of new jobs
(BUSINESS NEWS) GM is stepping up their electric vehicles investment with new factories and cars in the making. They are looking to the future and want to help build it.
On Monday, General Motors announced its $2.2 billion investment into its assembly plant located in Detroit-Hamtramck for the purpose of producing fully-electric SUVs and trucks. Additionally, the investment will go towards G.M.’s subsidiary, Cruise, for the development of a self-driving vehicle. Another invested $800 million will be used towards these future product launches.
The Detroit-Hamtramck assembly plant will the be first fully dedicated to electric vehicle production under G.M., creating over 2,200 job opportunities.
The following day, Cruise backed up its parent company by unveiling Origin, an electric driverless, ridesharing vehicle. Deemed “production ready”, Origin is designed similarly to a train car complete with sliding doors and seats facing each other. Cruise CEO Dan Ammann stressed the importance of low cost and the vehicle’s anticipated operation capacity of 1 million miles. These kinds of production stats show the company’s serious intention to change transportation in our cities.
G.M.’s investment comes on the heels of earlier December promises to fund development for mass production battery cells for electric vehicles with South Korean partner, LG Chem. That venture was also granted $2.3 billion by both companies and its own assembly plant to be constructed near Lordstown, Ohio later this year. 1,100 new jobs are expected to come out of the investment.
One of the largest obstacles to electric vehicle manufacturing is the cost of battery packs, deterring many mainstream consumers from electric vehicles. G.M.’s long-term plan is meeting this challenge head-on by fully creating electric vehicles to compete with cost of their internal combustion counterparts.
In a December press conference, G.M.’s chief executive, Mary T. Barra, acknowledged the company’s huge push into electric vehicle development by aiming to sell one million vehicles worldwide by 2026. The reason? “G.M. believes in the science of global warming,” she said. Perhaps another equally lucrative reason is the future of transportation is shifting towards electric models, and G.M. intends to carve out its own territory in this developing market.
How SmileDirectClub uses NDAs to silence bad reviews
(BUSINESS NEWS) SmileDirectClub wants to tell you, in the land of freedom of expression, how to talk about their service even if a dentist has to fix their mistakes.
Bad reviews can hurt any business, which is why many companies will go out of their way to ensure a customer is pleased. A restaurant might offer to replace a bad meal free of charge, for instance. A business might send customers additional free products to make up for any mistakes. SmileDirectClub, on the other hand, has taken a different approach to handling bad reviews: non-disclosure agreements.
SmileDirectClub is an aligners company that positions itself as a cheaper alternative to braces. It’s also an online company. All of this work is done remotely, with customers getting their aligners mailed to them. So, cheap and convenient. What’s not to love?
Well, turns out there might be trouble in paradise. According to an article by the New York Times, “SmileDirectClub has been the subject of more than 1,670 Better Business Bureau complaints since 2014.” In comparison, Invisalign, SmileDirectClub’s competitors, has only had five complaints over the last twenty years.
Many report that SmileDirectClub’s aligners don’t work and some have even claimed the aligners made things worse. Yeah, that’s right. Some people paid for SmileDirectClub just to turn around and have to pay an actual orthodontist just to get back to normal.
So, naturally, SmileDirectClub is having some customers sign NDAs, which according to the New York Times includes the following: “[customer] will not make, publish, or communicate any statements or opinions that would disparage, create a negative impression of, or in any way be harmful to the business or business reputation of SDC or its affiliates or their respective employees, officers, directors, products, or services.”
Non-disclosure agreements are just one way that big companies will try to silence bad reviews. Another method is to file a lawsuit for copyright infringement. GoPro attempted this method a few years ago. Companies can also claim that bad reviews are slander written in bad faith, which is a method many organizations have abused.
It’s possible for these sorts of lawsuits can backfire, but often, the time and money it takes for an average person to take on a big company aren’t worth it. People opt to simply take down their bad reviews instead.
For a country that values freedom of speech and a robust capitalist market, silencing critics (many of whom have legitimate things to say!) doesn’t seem in line with our beliefs. Not to mention, from a more practical standpoint, I’d sure like to know the potential risks or downsides of a product.
Especially when said product is supposed to replace dental work.
Asking the wrong questions can ruin your job opportunity
(BUSINESS NEWS) An HR expert discusses the best (and worst) questions she’s experienced during candidate interviews. it’s best to learn from others mistakes.
When talking to hiring managers outside of an interview setting, I always find myself asking about their horror stories as they’re usually good for a laugh (and a crash course in what not to do in an interview). A good friend of mine has worked in HR for the last decade and has sat in on her fair share of interviews, so naturally I asked her what some of her most notable experiences were with candidates – the good and the bad, in her own words…
“Let’s see, I think the worst questions I’ve ever had are typically related to benefits or vacation as it demonstrates that their priorities are not focused on the actual job they will be performing. I’ve had candidates ask how much vacation time they’ll receive during an initial phone screen (as their only question!). I’ve also had them ask about benefits and make comparisons to me over the phone about how our benefits compare to their current employer.
I once had a candidate ask me about the age demographics of our office, which was very uncomfortable and inappropriate! They were trying to determine if the attorneys at our law firm were older than the ones they were currently supporting. It was quite strange!
I also once had a candidate ask me about the work environment, which was fine, but they then launched into a story about how they are in a terrible environment and are planning on suing their company. While I understand that candidates may have faced challenges in their previous roles or worked for companies that had toxic working environments, it is important that you do not disparage them.
In all honesty, the worst is when they do not have any questions at all. In my opinion, it shows that they are not really invested in the position or have not put enough thought into their decision to change jobs. Moving to a new company is not a decision that should be made lightly and it’s important for me as an employer to make sure I am hiring employees who are genuinely interesting in the work they will be doing.
The best questions that I’ve been asked typically demonstrate that they’re interested in the position and have a strong understanding of the work they would be doing if they were hired. My personal favorite question that I’ve been asked is if there are any hesitations or concerns that I may have based on the information they’ve provided that they can address on the spot. To me, this demonstrates that they care about the impression that they’ve made. I’ve asked this question in interviews and been able to clarify information that I did not properly explain when answering a question. It was really important to me that I was able to correct the misinformation as it may have stopped me from moving forward in the process!
Also, questions that demonstrate their knowledge base about the role in which they’re applying for is always a good sign. I particularly like when candidates reference items that I’ve touched on and weave them into a question.
A few other good questions:
• Asking about what it takes to succeed in the position
• Asking about what areas or issues may need to be addressed when first joining the company
• Asking about challenges that may be faced if you were to be hired
• Asking the employer what they enjoy most about the company
• I am also self-centered, so I always like when candidates ask about my background and how my current company compares to previous employers that I’ve worked for. Bonus points if they’ve actually looked me up on LinkedIn and reference specifics :)”
Think about the best and worst experiences you’ve had during an interview – and talk to others about the same topic – and see how that can help you with future interviews.
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