Somebody asked this in another forum I'm involved in-
>Can someone tell me why these 98% of small
>business provide better services but still
>struggle to survive?
The whole answer to this question would require more space than is available in this forum.
My short answer to his question is-
The best product/service, even ancillary customer service is unprofitable unless it's properly marketed.
Some small business owners say they rely on Word Of Mouth. So, of course, they're struggling.
Referral marketing (please don't call 'Word Of Mouth' a form of marketing unless it's managed) is good but not effective if the business's customers aren't articulate or motivated enough to refer their relatives and friends to the business.
Some businesses use customer testimonials that are just generalities like-
"It was terrific." JM St. Paul MN
This is how some people talk about good experiences with businesses. That's why referral marketing doesn't always work.
When you talk to customers, ask them for specific examples of what pleased them. That will give you better feedback that you can take action on (implement on a wider scale) and also may help them bring you referrals because they'll have something specific to say.
You may have to softly coach them by saying something like-
"So, what you're saying is- We took the time to find out what you needed instead of trying to sell what would bring us the most profit. Is that what you mean?" Then when they talk to others they'll have a clearer statement to make.
Wal-Mart goes into its stores and makes commercials that seem like real testimonials from customers and employees. W-M spends big bucks on airing them. (They should, however, be required to post the notice "Your actual experience may vary." Or "WILL vary.")
Small businesses don't have enough money to match that. But small business owners have a better chance (than big businesses) of tracking who refers others to them. By tracking it, business owners can thank and maybe reward their vocal customers.
Remember that whichever behaviors you praise a person for will probably be repeated.
People want positive strokes!
I recently read an article in Zig Ziglar's e-zine. I'll quote part of it then I'll write my view.
Keeping More Of Your Customers By John P. Hayes, Ph.D.
Why does your business lose customers?
Studies of customer defection tell us that 3% of customers move away or die;
5%, friends lead them to shop elsewhere;
9%, competitors provide a better offer;
14%, product dissatisfaction causes them to shop elsewhere; and 68%, indifference
makes them feel no one cares about them, so they spend their money elsewhere.
Notice: More than two-thirds of customers defect because of indifference!
There's not much you can do about the 3% of customers who move away or die. Nor can
you do much about the 5% of customers who are persuaded by friends to shop elsewhere.
I disagree. I know there are things business owners can do to prevent defections. Below is one of my
proposed solutions.
Institute A "Defector Detector Program" Post a message (send it if you have a mailing list) that "We're Looking For Defectors."
Let customers know that you're interested in knowing why they buy from your competitors.
Ask what it would take to keep them as a customer.
Yes, I realize that some may just say that they're leaving you to get some kind of concession, but wouldn't it be worth it to stop as many defectors as you can. Whatever it takes to keep a customer, it's apt to cost more to replace a lost customer. How else will you easily find out what your competitors are offering AND what is interesting to your customers? By doing this, you may not only keep a customer, but gain the vocal, evangelical person who (almost) persuaded your customer to switch sides. This "evangelist" would be a valuable member of your team, right? How many people might s/he convert to you?
This will also show the 9% who may think that you're indifferent, that you really care. I know that spending levels vary from customer to customer, but can you afford to lose 14% (5% + 9%) or more of your profits? This program may cut into your profit margin, but losing and replacing customers will definitely cut into your profit margin.
If you invest 10% of your profits to keep customers (you would otherwise lose), you'd still probably save four or more percent. This is besides what you'd gain in referrals.
Thank you for using my blog. Please let me know if I should clarify anything.
Copyright 2016 Dennis S. Vogel All rights reserved.
When you compete against big businesses with big budgets you need powerful marketing strategies & tactics. You'll find them here-
https://thriving-small-businesses.blogspot.com/
http://www.voy.com/31049/
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