What can marketers learn from local business owners about marketing?
As a consultant, I am often asked by small business owners for marketing ideas to help their company grow. I love these requests because I learn more about marketing from these small business owners than I do from my Fortune 500 clients.
Don’t get me wrong, I realize how difficult owning a small business can be. Cash flow, staffing, supplier management and essentially every other detail is the responsibility of the owner. But local business owners are some of the most creative and innovative marketers out there.
That got me thinking – what can we learn from local business owners?
Local Owners Have to Build Their Customer Base One Customer at a Time
All businesses must build their client base, but at large marketing firms there is a tendency to look at volume and forget the individual customers making unique purchase decisions. A marketer has to compete for each purchase decision.
A local business owner looks at each person that comes in the door and wonders how to serve them best. That means sometimes ending up with a lower total transaction but with a much happier customer. Satisfied customers are much more likely to be repeat customers, repeat customers are much more likely to be loyal customers, and loyal customers are the foundation of success.
I am reminded of my recent purchase at a local bike shop. I went in looking for a specific model. The owner was happy to show me the model I was looking for, but made sure to ask me about what type of riding I did and how often I was in the saddle. He ended up recommending a different model, which I ended up loving and purchasing. Turns out the model he recommended was a bit less expensive than the one I had requested. While he reduced the overall basket size he increased the customer satisfaction.
A national marketer may look at that transaction and decide that the owner missed out on several hundred dollars of additional sales. The owner knows that selling a customer a product that better fits his or her needs means a much more satisfied and loyal customer. The bike owner’s commitment to my satisfaction paid off in this example, as I have since spent way more on accessories than I saved on the initial purchase.
OWNERS REMEMBER CUSTOMERS
When I walk in that bike shop they always ask me about the model I just bought and whether I am liking it. They also ask me about my riding and whether I have any rides coming up. They continue to engage me when I come in the store, but they also engage me via email and text message when they have new offerings or spinning classes at the shop. They use their knowledge of their customers to suggest new products that I might find interesting.
I am amazed at brands that treat me like they’ve never interacted with me. I ran a program for a large pharmaceutical brand that spent millions on mass advertising driving consumers to sign up for offers on a website and call an 800 number. We had a large number of trials, which is what we were paid to do, but the company did not follow up with the consumers after the program. Instead they marketed to the same consumers the same way the next drive period. I tried to sell in an onboarding/conversion program but the marketer in charge was judged solely on number of trials.
LOCAL OWNERS VALUE INTERACTION WITH CUSTOMERS
Knowing a lot about a product or service is half the job. The other half is knowing the consumers. The key is listening. Owners look for people who know the products well and know the consumers as well. By viewing interactions as listening & learning opportunities, owners are better able to know and serve their customers.
My favorite local Greek restaurant is a classic example. This happened just yesterday. A gentleman in my party was describing what he wanted and the employee recommended a slightly cheaper item because it was similar to what he described. She added that she could add chicken to the order since he usually orders that with his meal. Our interaction was terrific because:
- She knew the products inside and out and could easily compare items
- She listened to what the customer wanted and found the best item on the menu
- She added knowledge she had from prior interactions to ensure the patron got a satisfying meal
Large organizations typically put their lowest skilled employees in the contact center even though these people are the “voice” of the company when consumers call in. Organizations also limit their effectiveness when they don’t take advantage of the interaction to collect additional information from the consumers. What better time to get an understanding of your customer and find a way to make them a more satisfied consumer?
I am also astonished at the number of companies that ask for consumer information on their website and then do nothing to follow up with that consumer. It is not difficult to put together a simple thank you program that lets the consumer know that they received the consumer’s information and provide a coupon or gift certificate as a thank you, along with a list of places they can find the product.
LOCAL OWNERS CONTINUOUSLY INNOVATE BASED ON CONSUMER NEEDS
When McDonald’s wants to add a new menu item, they hold focus groups, test markets, regional rollouts and then finally make the product available nationally (I am very curious about the crab cakes they are testing in the Bay Area).
Local owners don’t have to have such a formal new product introduction process and have much faster innovation cycles than large corporations. First, they listen with great interest to what consumers think of new products (and how they can be modified to make them better). Second, if the new product fails to meet consumer expectations they can make it right for the consumer immediately.
A recent trip to my local butcher was a good example. My butcher knows I cook with lamb (that list is short in my area). He started carrying a new lamb sausage product and made sure to let me know about it. I tried it and it was not as good as I had hoped. Next trip he asked me about it and when I shared my less than enthusiastic response he gave me some lamb chops for free. Business owners are empowered to make those decisions and results in possible negative experiences turning into positive ones.
Interestingly, the value of processes and tools is just as great for large marketers as it is for small business owners.
ONE CONSUMER ONLY EXERCISE
For large organizations it is difficult to change the volume mindset and switch to the consumer mindset. An exercise we use with clients is the One Consumer Only Exercise. We isolate one consumer and then find all the information we know about that consumer. Where do they live, what is their age, what products have they purchased, what is their gender, what did they buy in the past that they are not buying now? This often points out gaps in our data collection. What aren’t we asking? What should we know that we don’t? What is the life time value of this consumer?
We then decide, based on the information we know, what is the best offer we can make to that consumer. Perhaps it’s an offer on a product they purchased in the past but haven’t recently. Perhaps they are a very loyal customer and we just want to thank them for their loyalty. We focus on not just one offer but what is the flow of communication that would be best for this consumer. Also important would be what questions would we want to ask these consumers. We call this the consumer contact plan.
We then repeat the exercise for another consumer. You can even have multiple teams do the same exercise and develop many consumer contact plans.
After you’ve compiled twenty or so of these consumer contact plans you can then compare the plans to each other. Pretty soon you will be able to discern the patterns. There is no magic to twenty, some organizations have limited data which makes ten plans the optimum number of consumer contact plans.
The challenges of owning a small business are daunting. But small business owners typically benefit from having direct contact with their consumers. The best small business owners have outstanding products or services but also are experts at listening to their consumers.
The key for large organizations is to never forget that behind the volume numbers they see on spreadsheets are individual consumers making unique purchase decisions. With this perspective, marketers should next focus on building an organization that values listening and learning about individual consumers.