I attended an all day ’seminar’ recently.  A chap I used to work with in a global consultancy left to set up his own business pretty much around the same time I set up on my own.  Over the past 7 years he’s often invited me to get involved with his business activities – however, it wasn’t until last week that I finally took up an invitation to guest at his Annual Conference.  Over 400 enthusiatic delegates – the Sheraton Skyline was bustling with energy.  I was impressed.  

The majority of the seminar related to some very interesting tax strategies – and given that 99% of people attending were accountants – then this was of course, hugely relevant.  Of course, as a marketer traditionally focused on professional services marketing – then many of my clients have been (and still are) firms of accountants – and so it was good to see some familiar faces (from the days when I worked in the consultancy) and generally network with others to find out how business was going for them.

The headline guest speaker was Gill Fielding – of ‘Secret Millionaire’ fame, Apprentice panel (and hinted at possibly being the next Dragon!? – sshhh – you heard it here first!).

Initially, I thought she was going to rave on about property investment (as that’s how she made her millions and it was also one of the themes for the day). However, whilst she provided evidence that there are signs that property is on the move in a positive direction – her main investment opportunity advice was to ‘invest in business’.

Like myself, Gill was very much of the opinion, that the current climate is possibly one of the best opportunities to launch new business, new products and for small businesses to really leverage the current econonic downturn to ‘compete’ against the struggling bigger players.

In recession, the consumer psyche (be it corporate or man on the street) focuses on the ‘basics’.  They don’t want all the ‘packaged’ added value bundles – if they want to buy a sofa they want a sofa – not the chair, the scatter cushions and the table and lamp thrown in at discount rates!  Consumers go ‘back to basics’ – not necessarily because they can’t afford the ‘frills’ – but because that’s the right thing to do in the climate (hold on to their money and purchase only what is necessary).

It’s no surprise then that cobblers, seamstresses and repair businesses that ‘fix’ things (saving the consumer from having to purchase anew) are all doing very well in the current climate.

Supermarkets with their ‘basics’ range – have never been so happy (because of course, they make the biggest margins on their own brands) – and now that ‘consumer pysche’ is such that it’s ok to purchase ‘no frills’ stuff – because ‘hey, it’s a recession’ – then all the better.  Even Waitrose has introduced an ‘essentials’ range (for the struggling middle classes – plleeeeze!)

In the ‘holiday’ sector – camping and caravanning holidays in the UK have sky rocketed – and so if this is your business area – what are you doing to ‘leverage’ the opportunity?

Another impact of ‘recession’ – is that loyalty can often ‘go out the window’.  Large corporates looking to make cost savings are less likely to remain loyal to their ‘premier rate’ agency (even if they have been doing business with them for years) – after all the bottom line is the bottom line and therefore, they are more open to looking around for some ‘bargains’ (I don’t mean inferior service quality – but getting the same level of quality at  much reduced rates).

So what opportunities does the current consumer psyche hold for smaller businesses...?

Well for one, smaller businesses tend to be far more price competitive – they don’t have the massive overheads incurred when employing and housing hundreds of people.  Talking from experience, our Carvill Creative design business provides exemplorary creative services for a fraction of the cost that the very same designers were charged out for when working in large London agencies.  Same people, same design skill – just none of the overheads.  So clients receive excellent creative services for a fraction of the cost.

Of course, what the ‘big players’ have is their ‘brand’ – but build yourself a decent and impressive portfolio, customer testimonials, case studies etc (building trust in your brand) – and add this to the ability to offer significant cost savings- and you have a winning formula.  Brand loyalty alone no longer cuts it (as we’ve seen in consumer buying behaviour in supermarkets with ‘own brand’ purchases recently going through the roof [up 70%! in Sainsburys!] ).

Of course, the other plus of using a small business is the service delivery.  A small business stays close to customers – keeping on top of their needs and going the extra mile.  You’re often directly in touch with the business owners when dealing with a small business – and as owners, keeping the client well serviced has significant consequences.  Client service is a vested interest!

• Small is responsive, fast and nimble
• Small is very price competitive
• Small provides excellent service levels (often direct from the people who own the business)
• Small is willing to tailor services and innovate

Everywhere I turn I am inundated with information about how to ’survive’ in an economic downturn.  Many of the authors focus on ‘improving customer service’ to ’stand out from the crowd’ and ‘help sustain customer retention’.  I totally concur with all this advice – however, this is how I believe all businesses should operate anyway – good times or bad.  So – let’s take a little look at consumer behaviour – and get an understanding of why people buy – and what we can do to ensure they keep coming back for more…

It’s rare for businesses to truly understand the customer decision making process.  Indeed, the majority of business owners would suggest that price is the largest contributing factor as to why people buy from one source instead of another.

Whilst the importance of price cannot be underestimated – (and indeed in certain industries price competitiveness is indeed the key determining factor) – there’s usually far more to it than simply price.

What do customers value?

Studies have repeatedly shown that the top 5 issues shoppers buy on are:

1. Convenience (ease of shopping)
2. Relationship with seller
3. Product / Price / Time (specifications, price or availability)
4. Perceived indifference
5. Misc

The real one to watch from the above list is – Perceived Indifference

We can all understand the importance of building relationships with our customers – and indeed we are all probably culprits of convenience shopping.  Yet Perceived Indifference is often ignored by many business owners. 

Given that studies about buying behaviour report consumers as placing as much as 5 times more importance on Perceived Indifference than they do on Price, it’s vital that all business owners focus on this key decision making element. 

To grasp an understanding of Perceived Indifference (from the customer’s perspective), think about how often you feel some of the following, having made a purchase;

1. A feeling that they don’t care about you or your individual needs – it’s a numbers game!
2. They act as if they don’t want your custom (in my experience the telecoms industry smacks of this)
3. They are not prepared to differentiate themselves from the competition – (strangled by process and not empowered to make a difference)
4. The vendor is not prepared to fight for my business, to work just that bit harder to deliver the service I want (again no flexibility)

These feelings unfortunately occur all too frequently when dealing with businesses.  Frequent examples include; a blasé sales assistant who clearly can’t be bothered to put themselves out for you or being held on the phone for 50 minutes to then be cut off!  (Telecoms again…!!!)
 

So before your strategy to boost more business is to ’cut prices’ – think a bit more creatively about delighting your customers in ways that matter….

• Boost sales – most businesses cut their prices (and usually their margins) with a ‘Sale’.  This can generate strong short-term benefits, such as clearing old product and building brand / market strength.  However, problems start to occur when price becomes the key deciding factor – selling on price is a very dangerous thing.  This is because there is almost always someone else willing and able to sell cheaper.  And the consumer will always remember the cut price – so it’s often difficult to reverse the price cut.
• Customers like a good deal – however, research has clearly identified that what customers really want is to feel valued throughout the whole purchasing experience.  The minute they feel that ‘perceived indifference’ is creeping in – and they and their purchase is not valued – they switch off.  And it’s very difficult to switch them back on again!

So – how can you overcome perceived indifference

Clearly, the key to overcoming the problem of perceived indifference is making the customer feel that they are important to you.  If the customer thinks that you want and value their business, they are much more likely to make both initial and repeat purchases – and share positive word of mouth with others.

Think about whether or not you instil measures within your business to ensure that your customers don’t feel the powerful punch of Perceived Indifference – and be sure to implement simple measures that show your customers you are attentive, eager and importantly, that you value their business.

Here’s a quick ‘anti-perceived indifference’ check list:

1. Do you answer the phone on the second ring every time?
2. Do people have an on-hold message to listen to? (And does is provide useful upsell info?)
3. Do you thank your customers or potential customers for calling?
4. Do you thank your customers or potential customers for visiting your business/or website?
5. Do you thank your customers for buying from you?
6. Do you and your team always arrive on time for meetings with customers?
7. Do you deliver products or services when you say you will every time?
8. Do you always let your customers know beforehand if there’s a problem?
9. Do you always return phone calls the same day you get the message?
10. Does each team member take responsibility for helping customers or do they hand around customer problems from one to another or from department to department?
11. Are team members empowered to provide compensation / service recover following a complaint?
12. Do you stay in touch with customers regularly?
13. Do you keep your customers informed about new things happening in your business?
14. Do you thank your customers when they pay on time – every time?
15. Do you have a policity to turn your mobile phone OFF/silent when in meetings with customers or potential customers?  (I have to throw this one is as it’s a particular bug bear of mine which I find totally ‘rude’ and is a strong example of ‘perceived indifference’).

Again, it’s not just in times of economic difficulty that businesses should be focusing on upping their service levels – it should be the ethos behind any well run business.   So stamp out Perceived Indifference – and make an effort to communicate openly and regularly with your customers.  Get your team members involved – and run a brainstorming session to pull together some ideas as to how you can ensure you rid your business of any ‘Perceived Indifference’.

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