Category Archives: Consulting

October 30, 2019 · 12:42 pm

Something For Nothing

I went to one of the warehouse club stores yesterday to make some bulk purchases. If you’ve ever been in one of them – Costco, BJ’s, Sam’s Club, etc. – you know that one feature of walking around the place is that there are usually free samples. You can taste the latest and greatest in meats, cheeses, and frozen things to cook while you’re too busy to make something yourself. That got me thinking about the fact that you really don’t see a lot of sampling elsewhere.

I’m a fan of the free trial. It gets customers walking through your door and using your product. What I don’t particularly like are those “free” trials that require you to fork over your credit card. Free means without strings, right? In particular, if you’re a business that is built around what I think is the gold standard – recurring revenues – you ought to be spending a good chunk of your marketing dollars on free trials.

It’s relatively simple math, right? What’s the lifetime value of a customer? What does it cost you to offer up a free trial – a visit, a free month, whatever? What is the conversion rate of those freebies – how many of the trials become regular customers? Recurring revenues are predictable and generally pretty stable. I bet you’ve signed up for subscriptions of some sort and forgotten you’ve done so or don’t use them as often as you thought you would. For a business, that’s a customer without costs, and that’s a nice margin!

When I talk to people who are looking at franchise opportunities and who don’t have a particular brand or industry in mind, I usually talk to them about the businesses with recurring revenue models. Things like cleaning services. Not a sexy business, but very profitable and that, in part, is because of the recurring revenues. Same thing with spa businesses or some hair salons that feature memberships. Are those businesses that can offer a free trial? Maybe if you’re an out-of-the-box thinker. Giving a converted customer the ability to give away a free trial to a friend is another great way to expand your base at very little cost.

Here is the thing about free trials leading to recurring revenues. As with any business, you have to maintain a high level of customer service. After all, when someone’s credit card is getting dinged each month and your business appears on their statement, it’s an opportunity for them to reconsider.  If they walk away, no amount of free sampling will get them back most of the time. Everyone loves something for nothing. The opposite – nothing for something – is very much NOT true!

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October 23, 2019 · 11:18 am

Learning From Leads

Like many businesses, I purchase leads to drive revenue. Leads are everything in the business I’m in now and without them, you starve. When I went to our consultants’ convention last July, nearly every conversation I had with one of my peers eventually turned to the subject of where we were sourcing leads and how productive those sources were. As an aside I’m having Glengarry Glen Ross flashbacks as I’m writing this:

These are the new leads. These are the Glengarry leads. To you, these are gold; you do not get these. Because to give them to you would be throwing them away.

In any event, following the convention, I tried out a couple of new lead sources and one of them has proven to be quite good. The reason I’m writing about them today, however, isn’t so much the quality of their leads as it is the quality of their customer experience. They do some things that are instructive for any business that has customers (and find me one that doesn’t!). If you don’t think it’s important, remember that Oracle found that 86 percent of consumers will pay more for a better customer experience.

First, although they sell packages of a fixed number of leads, they let me put together my own package as a test case. They were flexible and focused on my needs rather than on “this is how we do things.”

Second, they are generous with “freebies.” Sometimes the leads are actually not real people – the phone number is bad and the email bounces. Sometimes someone is playing a prank on someone else by sending their information in without their knowledge. Not only have I never had an issue getting the company to refund a lead because of that but they will sometimes throw me an extra couple of leads because I had a less than optimal experience. Let’s face it – who doesn’t love something for nothing?

Third, they follow-up. I get asked regularly if I’m happy with what I’m getting and if they can improve my experience in any way. That’s big because I know they’re listening and that they care. Of course, it’s imperative that if the customer does come up with a suggestion that you communicate back to that customer how you’ve handled it (and just tossing it in a drawer isn’t acceptible!).

That leads to another thought. We should always go overboard when correcting mistakes. Yes, they happen, but if you’re transparent about it and more than makeup for the error, people can be quite forgiving and what was a negative can become a positive.

It’s really about being customer-centric and showing those customers some love, isn’t it?

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October 3, 2019 · 3:16 pm

Don’t Waste My Time

I wasn’t going to write this week until Foodie Friday but I got aggravated and this seems to be one of my saner outlets to express my frustrations. As I’ve mentioned before in this space, I moved into a new home last February. In the new home, since it is newly constructed, are brand-new appliances. So far, they’ve been wonderful.

I especially like the ice-maker feature built into the fridge. That’s why, when it wouldn’t dispense ice last evening, I was horrified to find that the ice maker seems to have ingested itself. Somehow the little plastic tray that forms the ice and dumps it into the bin got tangled in the worm screw that pushes the ice to the dispenser. To paraphrase the Soup Nazi, no ice for me.

This morning I called the folks at Sears bright and early (7:30 eastern) to get a repair person out here and this is where the business angle comes in. If you’ve been following Sears at all in the business press (or even in this space), you know that they are in all kinds of financial trouble. Without getting into why that is, it’s safe to say that the last thing they want to do at this point is to alienate a customer. You with me so far?

Back to the phone call. Obviously, the fridge is still under warranty – it’s not even a year old. I called the number on their website that gets you to service for products under warranty and was greeted by an AI bot. I’m not a fan of these things – I think they aren’t that great yet and I’ve been frustrated more than once by a bot that couldn’t get what it was I wanted. Without a lot of gory details, I got this one to send me to a human. Except the humans weren’t in yet. “Please call back during business hours.” I spent 4 minutes getting to that point. They didn’t even bother to say what “business hours” were and in which time zone.

Let’s not alienate a customer, right? What would I have done differently? First, maybe they shouldn’t answer the phone with anything other than “our business hours are…” and ask you to call back. Even better – ask for my phone number so you can call me back when you get in. Don’t tie me up for several minutes and waste my time.

Sears isn’t the only company I’ve had a negative experience today. Two members of my family ordered new phones from ATT. Neither wanted insurance, told the salesperson so, and yet both were going to be billed $8.99/month without their permission. I know only because I got the “welcome to your new insurance” email since I’m the main account holder. That means more time out of my day to fix a problem that neither I nor my family members made.

If you run a business, especially a business that’s in financial distress or a business that is in an insanely competitive area, spend more time hugging your customers. Find ways to reduce their pain. Don’t waste their time or connive ways to take their money. Make sense?

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