Thursday, April 23, 2009

Adding On...

An HP LaserJet 4200 dtns printerImage via Wikipedia

Are you adding on to the services you are providing?


If you are a fan of Jeff Foxworthy you probably think of his number about McDonalds and their attempt to add the Hot Apple pies to people coming through the drive thru. Adding on to products and services can also have a negative cogitation because of the way some companies push extended warranties.


So why would companies push an add on even though it might be considered pushy by the customer?


Let’s take an electronics store for example. It may surprise some people that there is little to no mark up in electronics. A store selling a business laser printer may make anywhere from 2 to 10% of the sale of that machine. It is a big sale but it is not making a lot of money. Now if an extended warranty is added to the transaction that could be anywhere from 50% mark up or more, you can see why some companies can get really pushy about getting those warranties.


However, you as a small business owner is trying to build customer loyalty, so pushing products that the customer may not think is necessary will only alienate them and cause them to shop elsewhere.


So how do you get additional items added to the sale without upsetting the customer?


First of all, you need to use proper salesmanship. I have gone over sales presentations in the past and will refresh that information in the near future. You need to ask your customers questions and listen to their answers and they will tell you what they need.


Let’s use the example of selling a printer. Most printers do not come with USB cables because the manufacturer doesn’t make any more money building the printer than the electronics store makes selling it (the manufacturers make their money selling the ink).


One of the questions you can ask your customer is if they already have a USB cable and is it long enough. Another example is that they may tell you during the conversation that they will be printing brochures so a natural add on would be to ask them if they will need any brochure paper.


So how does this build customer loyalty? You are finding out exactly what the customer needs to insure that they do not have to turn around and come back to your store or more likely go to another store to get needed supplies. I cannot tell you how many times people came into my store and said they bought a printer and the salesperson never mentioned that they would need a USB cable so the had to come to our store to purchase one. Do you think they were happy with the salesperson at the other store?


There is other ways to get additional sales.


Service businesses can also benefit from this and since I have several friends who are professional photographers, I will use them as an example.


During my wedding, our wedding photographer mentioned to several families that he also takes family portraits. He ended up doing some shots of families at the wedding in addition to the pictures of us. Since he was already at the wedding, this extra business only cost him a couple of rolls of film.


If the photographer did one wedding per week, think about how much additional revenue he could make by just getting one family per wedding to do a portrait session.


Getting an add on to a sale not only can help your revenue but it can also help you build customer loyalty by ensuring your customer leaves your store with everything they are going to need in order for the product to solve the customers problems.


Also, be on the look out for additional ways to increase your revenue stream to make your business more profitable and successful.

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Tuesday, April 21, 2009

Building Customer Loyalty

Small Businesses 1Image by Angela Radulescu via Flickr

How loyal are your customers to you?

The answer to the question could be what stands between success and failure of your small business. Today you see many major retailers trying to build customer loyalty through their so called rewards cards. It is the latest attempt to keep customers coming to their stores as opposed to their competitors.

But what can you do to create customer loyalty?

The Freelance Folder blog has several ideas to build your customer loyalty.

The first idea they mention is to add a human touch to your service. When is the last time your tried to call a company on a 800-number and have been totally frustrated with the results? Make sure that your customers are able to reach someone that can answer their questions.

While I have said it is OK to outsource some projects, you should never outsource anything that will affect the service that your customer receives. These days too many companies are outsourcing their customer service functions which in the long run will only harm the experience the customer has when they call.

An outsourcer can provide the same level of customer service that you can because it is your business and to them it is just another account.

Another important way to build customer loyalty is to take care of the customer no matter what. To often small businesses have return policies that are too restrictive and cause them to loose customers in the long run. While a return always hurt, a customer that is able to return a product without problems is more likely to come back and buy more than a customer that cannot return a product.

The best way to deal with returns is to set aside a certain percentage of your sales to compensate for returns. This way you are not being caught by surprise with a really big return that you are not expecting.

Building customer loyalty should be one of your biggest priorities. It will mean the difference in the long term future of your company.


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