Some Common Sense About Customers and Profits

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Author John Towler, Ph.D.

How to be more successful in an increasingly competitive marketplace.

I’m tired of the books and experts that offer the ten best-kept secrets for making money, increasing profits, selling or anything else. None of the information is new, none of it is secret and it is ludicrous to think that there are only seven, ten or any other number of ideas that will solve your problems. It’s time for some common sense.

Success in business depends on customers buying what you have to sell. This assumes that you have a product or service that is priced right, that you can produce it for less than you sell it for and that you have an organization that is even moderately efficient. It all comes down to attracting and keeping customers. Earnings come from customers and the best way to increase your profits is to attract and retain profitable customers. There is nothing new about this. The only thing that has changed is that there is increasing competition and customers are more demanding. There is very little you can do about the competition, but you can do a lot about customers, once you understand what is happening in the marketplace.

Today’s customers are more demanding, more informed and less loyal. They know what they want, how to find someone who will give it to them and they will buy from them regardless of who they have been dealing with up to now. Customers compelled the music industry to change how they did business. The effect of Napster and iTunes was to force every major music company to offer digital distribution. There are dozens of cases in which customers are calling the shots and it is just as pronounced when it comes to shopping competitively. People know where and how to look for the best bargains. Armed with the right hand held technology, a shopper can scan the bar code of an item in any store and immediately go on-line to find who has it for less. Most businesses have an advantage that offsets these factors. They already have customers; all they need to do is keep them. However, this isn’t as simple as it sounds.

Companies that want to survive and thrive in the new economy must develop a different attitude about customers and a process that meets their demands. This is more than being “customer driven” or “customer centered” or paying lip service to some other platitude. Firms have been doing that for years. A few major things stand out: companies that want to succeed will have to find out what their customers want; they will have to find a way to give it to them and must have employees capable of dealing with customers in a new way. None of this is hard to do. There are no secrets of success here; just getting organized to do it.

How do you find out what customers want? It’s so simple that I don’t know how to make it sound difficult. You ask them! You cannot assume that you know what they want and what is best for them. Find out from them. Don’t rely on some expert to tell you. Unless you are listening to your customers, you are talking to the wrong people. If you aren’t doing this on an organized, regular basis, you aren’t doing it right. There are several ways to do it and some are better than others. Focus groups can be effective. However, they are costly, involve only small samples of your customers and take a great deal of time. Telephone or on site interviews are better, but there is a limit to how many people you can contact, and you run the risk of annoying customers if you stop them at your location or telephone them at work or at home. Surveys are another option. They are less expensive and you can contact every one of your customers, your most important ones or a specific sample of them. Paper and pencil surveys can be effective, but they are old hat. Electronic surveys offered over the Internet are cheaper, faster, and customers can take them any time. Some companies have the software and expertise to design and administer surveys in-house; others outsource their needs.

Once you have discovered what your customers want, it’s up to you to figure out how to give it to them. Most firms find that their own people have the answers and will be pleased to work on the problem once you empower them to do so. After all, who knows the business better than the people working in it? A task force or special committee is often the best approach. But don’t forget to ask your customers whether the new process or approach is satisfactory.

Finding people with the right attitudes or skills to deal with your customers comes down to two things; hire only those who have the qualifications and re-train or replace your current employees who don’t match up. Getting rid of people can be a major problem. Re-training them may take time, but there are some excellent training programs available. However, don’t make the mistake of thinking that a two-day course will turn a miserable sourpuss into a charming delight. Hiring people who come with the right skills and attitudes is the most effective approach. Fortunately, there are some very good tests that will enable you to screen new hires and measure the quality of the people you have now.

Any business can attract more customers, retain them and prosper in the days to come. It simply depends on knowing what to do, how to do it and having the will and determination to get organized to make it happen. There is no magic solution, no undiscovered secrets, just common sense. Think it through for yourself and don’t waste your time and money looking for a quick fix.

John Towler is a Psychologist and the founder of Creative Organizational Design. Please send comments about this article to jtowler@creativeorgdesign.com. For more information, please contact us.

Re-printable with permission.