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Martin Grunstein
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Look after loyal customers

Thursday, March 28, 2019

Example 1.

I have driven the same brand of car for 25 years. In that time I have bought seven or eight vehicles for me and my family. The cars were good, the servicing was very expensive but efficient and I was treated well as a customer.

Then the following happened.

My son, who drives an old car of mine, complained that there was a strange sound when he was driving and the oil warning light wouldn’t go off, even after he topped up with oil, so I told him to take it to the dealer and they would advise us what to do.

He was told by the service manager that the engine was “stuffed” and it would cost over $20K to replace it and the car wasn’t worth that much so we should sell it and buy another one.

I decided to get a second opinion from a mechanic friend of a relative.

He said the engine is fine. The oil had become sludgy and if it was cleaned out and replaced as it should have been at its most recent service, the car had many years left in it. He did exactly that for us. Cost involved – almost negligible.

That mechanic now services all our cars and I have no intention of going back to my previous dealer for service or the purchase of another vehicle.

Example 2.

I had my financial planner for over 20 years. His fees were high but he told me that my plan was working perfectly (even though I had nothing to compare it to). He and his staff were always friendly and we were happy clients.

Then the following happened.

He suggested I should organise estate planning and recommended a firm to do that for me. We met with the people he recommended and they sent us a proposed fee that was astronomical. I got a second opinion and was quoted a fee that was way less than half of the original quote.

It made me think about my relationship with my financial planner. Why would he recommend someone who would massively overcharge me for what was a commodity item? So, on the recommendation of my accountant, I saw another financial adviser and got a second opinion on my financial plan.

I was told that the fees I was being charged were ridiculous for basically managing a superannuation fund and that I was massively overinsured. And, by amazing coincidence, those insurance policies were delivering enormous commissions to the planner.

I changed financial planners.

Here’s the point.

Even though I had probably been ripped off for years by the car dealer and the financial planner, I probably would never have known until they tried to rip me off even further and it made me reconsider my whole relationship with them.

This kind of thing is happening every day in Australian business.

You go to your existing phone company or energy provider and say you have been offered a quote of 30% less by a competitor – and they match price immediately.

What about the 20 years before I complained when I was paying way over the odds for my power or phone bill?

My wife was actually told by our car insurance provider “you should have rung up when you got your bill every year and we would have always matched any competitive quote”.

What the hell is going on here?

Not only is the existing customer not being rewarded for their loyalty, they are actually being told to their face that they are suckers for being loyal and non-complaining!!!!!

I have been told stories like the above in customer service workshops I have been running for years and, in almost 100% of cases, when the customer finds out that they have been ripped off in the past, rather than accepting the price match from their existing provider, they take their business to the competitor even if it inconveniences them to do it.

Why? Because the ego drive is stronger than the money drive!

When I am humiliated by a car dealer or a financial planner or a phone company or an energy provider, no discount is enough to make me loyal again AND I WANT REVENGE.

For some people taking their business elsewhere is not enough revenge, these people will tell their friends (and sometimes anyone who will listen) how they have been treated and go on social media to tell (usually embellished) stories of how badly they were treated.

And in some cases the revenge does more damage to the original business than the money they made by ripping off the customer. I had a lady in a workshop tell me very passionately (and she said she had told the story HUNDREDS of times before) how she changed the venue for her $80,000 wedding reception when one of her friends told her they had a function there and were overcharged $500 for drinks.

Why does this go on happening?

All companies try to maximise their revenue but not all companies consider the repercussions of the ways they get more sales.

By offering better deals to new customers than to existing customers and rewarding disloyalty rather than loyalty, companies must surely know that, eventually, they will have more and more disloyal customers who will leave them when a competitor offers a better deal.

And by gouging their existing customers they know they will do their brand great damage IF THEIR CUSTOMERS FIND OUT.

 Consider an alternative universe and one I am trying to create with my teachings.

 My financial planner says to me. “You have been a client for many years now and we appreciate that. We think you should have your estate planning organised. We’d like you to meet with our preferred legal people and we’ll pick up the tab for the creation of your wills.”

My car dealer says to my son “This may or may not be a serious problem but your dad has bought lots of cars from us so we’ll get you back on the road at our own expense and we don’t care how much it will cost us to do that.”

 Here’s what would happen.

I’d still be with my original financial planner paying his ridiculous fees and being overinsured and telling people what a great bloke he was for organising my wills free of charge. Depending on how long I live, he could have made another couple of hundred thousand dollars from me.

I’d still be buying and servicing my cars at my dealer and depending on how long I live, he could have made another couple of hundred thousand dollars from me.

I think most companies believe that the extra revenue they make from exploiting their loyal, non-complaining customers is greater than the cost of rewarding them for their loyalty.

I beg to differ.

And by rewarding them for their loyalty, I don’t mean offering their existing customers promotional prices on a permanent basis, I mean just doing nice things for them once in a while and seeing them as a source of future revenue for a long time rather than a cash cow they can exploit today.

Let me end with some positive examples, ironically from the financial services and motor vehicle industries, that clients of mine have done.

A financial adviser invites her top 50 clients and their families to a private screening of a new release movie. They get choc tops and popcorn and have a good time and the adviser thanks them for being such wonderful clients. No sell. No strings attached. Just thanks for your loyalty.

A car dealer knows that one of his clients, who has bought many cars from him, is a car racing fanatic so he organises the client to have a racing lap at Eastern Creek with one of his idols. No sell. No strings attached. Just thanks for your loyalty.

A business relationship is like any relationship. If I feel I am taken for granted, I’ll leave.

Martin is contactable on 0414933249 or through his website www.martingrunstein.com.au

 

The idiot theory of life & business

Thursday, March 21, 2019

Everybody has their own theory of life. Mine is called the “idiot” theory. It has become the central focus for all my teachings in customer service.

My idiot theory of life goes like this.

When you’re about 12 or 13 (but at different ages for different people) you’re sitting in your bedroom one day and it dawns on you … that you’re an IDIOT!

This probably happens as a result of making a goose of yourself with the opposite sex and you think to yourself “boy, am I an idiot? I hope nobody’s noticed.” But it’s too late because everybody knows you’re an idiot.

So it becomes your mission as a teenager to hide the fact that YOU know you’re an idiot from everyone you come in contact with. You dress like the crowd and act like the crowd and it’s risky to ask the opposite sex out for fear of rejection, and that’s how we live our adolescent years.

BUT you never grow out of it!

As adults, it intensifies and becomes your mission in life FOREVER to hide the fact that you know you’re an idiot from everyone you come in contact with as long as you live.

Eventually, you meet one person in the world who you fool completely, totally oblivious to your idiocy, so you MARRY that person! You meet another group of people who know you’re an idiot and accept you. We call these people FRIENDS. And the third group of people is the most important for our purposes because they’re the people who know you’re an idiot, but they DON’T let you know that they know you’re an idiot. And these are the people to whom we give our money in business! And I mean that most sincerely.

For example, I had to buy a computer for my business years ago. Now, I am an idiot when it comes to IT but I had to buy it from an IT retailer so I try and hide the fact that I’m an idiot from the person serving me by saying all the things you are meant to say when buying a computer (even though I don’t know what I’m talking about). Two seconds after I open my mouth the salesperson KNOWS I’M AN IDIOT from the way I speak but if that person lets me know they know I’m an idiot, I’ll run a mile because we don’t give our money in business to people who humiliate us in the sales process.

After being humiliated on three separate occasions, I went to a friend of mine who was a trainer in the IT industry and said to him “I’ll give you $500 (plus the cost of the equipment) if you buy me all the things I need for my office and install them for me and be available to answer any dumb questions I have. I just don’t want to come in contact with an IT salesperson. They make me feel like an idiot.” My friend suggested $500 was too much as it would take him less than two hours to do everything I wanted. I said “Keep the money” and to this day I felt it was worth every penny to not have to deal with IT people.

I wonder how many people feel the same.

About 10 years ago I was playing golf with a senior executive who told me he was flying from Sydney to Brisbane to do an expensive IT course for people over 50 because he felt uncomfortable sitting in a room with people 20 or 30 years younger than him who picked up concepts quicker than him.

At a seminar, a lady from rural N.S.W. said she drove over 100 kilometres to another town to buy a car because her local car dealer (for that brand) was patronizing to her as a female and she wasn’t prepared to put up with that despite the massive inconvenience.

I’ve heard on several occasions stories of people giving the business to the only trades person who followed up the quote or the person who turned up on time.

A client of mine was taking several important clients of his to a fancy seafood restaurant at Darling Harbour. While in the middle of entertaining and trying to impress the people at his table, the waiter informed him, loud enough for everybody at the table to hear, that he was eating his entrée with the wrong fork! Not only did that restaurant lose 10 future customers, my client said he’s told the story to hundreds of people naming the restaurant every time and telling people never to go there.

There is an adage in customer service that says THE CUSTOMER IS ALWAYS RIGHT.

That is the greatest load of garbage I’ve ever heard!

The customer is WRONG almost 100% of the time. In fact, most of the time the customer is an IDIOT, just like you and me.

But whether the customer is right or wrong is irrelevant to the success of your business.

The only thing that matters is whether the customer walks away from dealing with you THINKING he/she is right. If you can get that across to your staff there is a good chance you will increase the number of repeat customers.

I was working with a group of hairdressers a few years ago and after discussing this concept in the seminar, one of the hairdressers came up to me privately and told me that after 30 years in the business he’d worked out why he’d never had a very successful salon – it’s because he told people the truth! And he said to me “I realize now that people don’t want to hear the truth”.

YOU BET THEY DON’T WANT TO HEAR THE TRUTH!

Style is an interesting concept. Very few people have it but every person who enters a hairdressing salon thinks THEY are one of the few. When your customer wants to buy a dream, don’t sell them reality or they won’t come back.

Does that mean we have to lie to customers?

Of course not but it doesn’t mean we always have to shove their inadequacies down their throat.

Would it hurt if the waiter didn’t inform the customer he was using the wrong fork? Would it hurt if the regional car salesman didn’t let the female customer know that he didn’t feel women knew much when it came to cars? Would it hurt if the IT salespeople didn’t embarrass me for not appreciating the full capabilities of the computer when all I want to do is word process and get on to the internet?

The world wouldn’t change at all but in those three cases those businesses would have gained customers that they lost by making them feel like idiots.

My goal when I go into a selling situation is to walk away making the person I’ve visited feel clever. If I do that there is a good chance I will have made the sale. If I walk away having displayed my knowledge, pointed out their mistakes and attempted to correct their behaviour, there is just as good a chance that my kids won’t eat.

Martin is contactable by email at martin@martingrunstein.com.au

 

You don’t have to drop your price

Thursday, March 14, 2019

It seems that in the face of competition, the response, in almost all of the 100 industries I’ve spoken to, is to either match the price or lose the sale.

Not only is this bad for your profitability (and there is evidence of this margin erosion in so many industries, for example the retail margin in the IT industry on many products has gone from over 40% to single figures in the last 15 years), it is bad for your future profitability - because all the people who have screwed you on price refer their friends and colleagues who expect, and get, the same cheap prices.

Where does it stop?

Well, in a lot of industries it hasn’t stopped and the results are a lot of people going out of business in the last 10 to 15 years.

But a story I was once told in the hairdressing industry gives the insight into how to turn things around and it applies to any person selling products or services in any industry!

There was a hairdresser in a small US country town charging $25 for haircuts and doing brilliantly because there was no competition in the town.

One day a competitor opened a salon directly across the road with a big sign in its window saying “$6 HAIRCUTS”.

The first hairdresser was rattled. He thought it through and realised that if he kept his price at $25, he’d lose a lot of his customers to his competitor and he may not get them back BUT if he dropped his price to $6, he may eventually drive this guy out of business but he’d go broke himself because he couldn’t afford to take $19 off his margin.

If you disregard the industry and the price difference, I believe most businesses in this country think they would have to either match the price or lose the sale.

RUBBISH!

What the US hairdresser did, that worked outstandingly well, that we can learn from, was this. He kept his price at $25 and put a big sign in his own window that read “WE FIX $6 HAIRCUTS”.

And I tell Australian businesses day after day “that’s what YOU do for a living”!

Isn’t the easiest sale you ever make the person who comes to you complaining about the poor service of your competitor? Just smile and take the money.

The trouble in this country is that we fix $6 haircuts for $6 when we should be charging $25!

How do you fix “$6 haircuts” in your industry?

How about returning phone calls promptly?; how about telling people about your extensive experience in the industry so you reassure them you’ll be around in the future?; how about guaranteeing your products and services so the customer is never taking a risk in doing business with you?; how about testimonial evidence of past satisfied clients so there is credibility in the promise you make of a good result?; how about offering personal accessibility so that your customer can contact you when they need to even if it’s outside business hours (they will very rarely contact you outside business hours but the value is in the offer, not the delivery)?; how about the range of products and services you offer making your business a “one stop shop” rather than making the customer waste time going to other places; how about profits stay in Australia rather than going overseas?

There are literally dozens of ways you fix $6 haircuts every day of your working life. The trouble is we don’t communicate these to the marketplace and and then we wonder why people come in and screw us on price.

Before your prospective customer threatens to get a “$6 service” instead of doing business with you, tell him all the things he gets for free with his “$25 service” and make the $6 service look like a risky proposition for the customer - which it is because despite the proliferation of discounting in almost every market, most people still believe “you get what you pay for”. Unfortunately, most businesses don’t tell them what they get in the offer that they DON’T pay for to help the more expensive offer compete.

Think about it.

In my business I offer 12 months marketing consulting, FREE OF CHARGE, to all the clients that book me to speak (even for a single presentation). I will write articles for their newsletter; I will be accessible to anyone within the company who needs my advice on implementation of the things we have discussed at their conference; I will critique the work they do at the conference as a result of my session and keep working with them till what they present to the marketplace is excellent. And all of this is free of charge.

Now, like you, I have prospective clients trying to get me to discount my fee by saying things like “how much is the seminar without the consulting?” and my answer is simple and the same every time. “I DON’T SELL the seminar without the consulting because I’m selling a result, not just a presentation”. The consulting is just as integral to my offer as the preparation of my presentation.

This works.

I have a client in the W.A. building industry who gets approximately 8% more than his competitors by offering a home with a fixed price guarantee so that the client never has the price blow out due to unforeseen circumstances (which are pretty common in the building industry) - he is selling RISK MANAGEMENT. I have a client in the real estate industry that has increased his earnings by 16% in one year by implementing a service guarantee with default. That is, if this real estate company doesn’t return your phone calls within two business hours or breaks any of its promises that it makes to you when you give them the listing, they refund $200 from their fees every time they let you down - they are selling STRESS MANAGEMENT; I have a client in the Victorian grocery industry who is more expensive than the major supermarkets but they have a Community Benefit Card which means they advertise that they donate 1% of their total turnover every month to charities and schools of their customers’ choice. Are they doing well? You bet, having donated over $4 million to charity. They are selling COMMUNITY SPIRIT.

Please brainstorm all the things YOUR customers get that are included in the price of your products or services and communicate these BEFORE they make their purchase decision. Why do we have to wait until a customer gets a $6 haircut before we fix it?

Not only is prevention better than cure, it’s more profitable!

Martin Grunstein’s results with over 500 Australian companies across over 100 industries has made him Australia’s most in-demand professional speaker on Outstanding Customer Service. He is contactable by email at martin@martingrunstein.com.au

 

Why commissions are falling and what to do about it!

Thursday, March 07, 2019

There have been few industries that have suffered the erosion of margin suffered by the real estate industry. Agents commission has fallen from around 3% about 15 years ago to around 2% today. That’s a fall in income of a third! The increase in property values has compensated for some of that but it’s a radical decline that shows no sign of stopping. At this rate, agents’ commission may be around 1% in 15 years’ time. “One percenters” have already entered some markets and while many went out of business, they brought the average commission down in those markets as a response.

The answer to why this has happened is very simple but the majority of agents have been blind to it. The industry has been commoditised by the very agents who represent it!

Other industries have been commoditised and suffered similar margin erosion. The motor vehicle industry produced many millionaires in the seventies and eighties. Being a car dealer was a licence to print money back then. Today, the sons of those car dealers struggle to service their mortgages because all the profit has gone out of the industry. I was at a conference of a national car manufacturer where it was revealed that dealer profitability on new cars was half of one percent!

Why did this happen? Purely because of the discounting mentality and lack of sales skills of the industry. Almost every car dealership says “we’ll beat all our competitors on price” to the point where the car is sold at a loss and hopefully some profit is made on service and finance.

It used to be that a Toyota dealer’s major competition was Ford or Holden. Today its major competition is another Toyota dealer offering the identical car at a discount. And the customer goes from one dealer to another until the cheapest price is obtained. The travel industry used to be about romance and excitement and experiences. Today it’s all about cheapest point to point fares on the internet and tripadvisor.com has replaced the travel agent as a source of information.

Back to the real estate industry.

Like the car industry, the real estate agents discount their fees at the drop of a hat and the vendor plays one against another until the cheapest fee is obtained. Like the travel industry, the vendor doesn’t believe the claims of the agent and places more credibility in past vendor experiences with that agent, with those testimonials obtained via word of mouth or social media. How does an intelligent real estate agent make this change?

Simple. Stop doing the crap that doesn’t work and start doing what resonates with the vendor of today. Here’s what doesn’t work.

The following are NOT points of difference

  • “I can get more for your property than other agents”. Almost everyone knows that the market decides what a property is worth, not a real estate agent.
  • “I’ll get more for your property than my competitor” is a lie that people will not tolerate any more.
  • “I have a unique marketing programme that will get more buyers coming to your property than anyone else”. Again, rubbish! If there was a “UNIQUE” marketing programme that attracted more buyers than any other programme, it would have been copied BY EVERYBODY!

And my personal favourite:

  • “I am an expert negotiator and my skills will be invaluable to you throughout the sales process”.

In most cases, under pressure, these “expert negotiators” will discount their fee to get the listing. If these EXPERT NEGOTIATORS can’t get a listing without discounting their own fee, how can they claim expert negotiation on the vendor’s behalf as a reason to hire their services!

These lies and many others told by agents in an attempt to get a listing are the reason that most vendors don’t believe ANYTHING an agent promises and make their decision of who to hire on who gives them the lowest fee.

So what does resonate with the consumer of today (in your case, the prospective vendor)?

STRESS MANAGEMENT!

Vendors appreciate that selling a property has hassles associated with it but they want the agent to experience the stress during the process, not them. That’s what they are paying for.

The number one criticism of agents by vendors, and this hasn’t changed in 30 years, is lack of communication during the sales process. Unreturned phone calls, unreturned emails, unreturned texts that cause the vendor to worry at a time that is enormously stressful for them. Some vendors worry irrationally and those are the vendors who NEED instant response to their questions and concerns and reassurance that everything is going to be all right. The good agent needs to be a psychologist as much as he/she needs to be an agent.

How do you sell stress management as a point of difference rather than the lies that vendors don’t believe?

How about this? “Mr. Vendor, while other agents promise to communicate and be accessible during the sales process, I GUARANTEE it. If I fail to return your phone call, text or email within three business hours or fail to turn up to a meeting on time, please deduct $200 from my fees every time I let you down. I will do everything within my power to make this sale as stress free as it can be for you and if I ever let you down, I will suffer, not you.

“Go ask any of my competitors if they will pay you $200 if they don’t return your phone call. And if they won’t put their money where their mouth is, why would you believe anything else they say?”

The key to selling stress management is having strategies and points of difference that show that YOU are taking on the stress for the vendor so THEY don’t have to worry.

Another key way of selling stress management is NOT saying things about yourself that are subjective e.g. I am reliable; I am friendly; I am enthusiastic; I am great with people; I go the extra mile etc.

These motherhood statements traditionally dominate agents’ profiles in their listing kits. And they have ZERO credibility with vendors who have never met you. Guess what? Even the agents who AREN’T reliable, say they are so why should I believe you and not your competitor? Here is where you need to use testimonials rather than your own rhetoric.

Past vendors will tell me whether you go the extra mile, not you. And THEIR words should be the centrepiece of your listing proposal, not your profile which, in most cases, looks like it has been written by your mother and is more applicable to a dating site than a listing proposal.

AGENTS DON’T NEED PROFILES! They need a list of benefits and points of difference that will give the vendor reasons to give them the listing (e.g. return phone calls guarantee).

Anything subjective needs to be communicated through client testimonials OR NOT AT ALL. If a past vendor says you are great with people, I am more likely to believe it than if you say it about yourself. Does that make sense? If it doesn’t make sense, I am making no headway here and welcome to the future world of 1% commissions.

I was playing golf with a client in the real estate industry after speaking at their conference about 20 years ago and in the locker room of the golf course a client of his came up to him and said “Macka, I’ve got another property for you to sell. 5% like always?” Macka said “Fine. Leave it to me.” I asked Macka “Do you get 5% commission on all the properties you sell for that guy?” He said “Yes. And the reason is that he never has to worry about a thing. And guess what? All the people he refers pay 5% too and as long as they never have to worry about a thing, I can charge whatever I like.”

I learned a lot that day. It’s time the real estate industry learned as well.

If this makes sense to you, change your marketing to reflect what resonates with the consumer, not what the industry has always done.

If you want me to present to your team on how to make this happen in your business, call me or email me. And don’t forget to ask for a discount. And if I give you that discount, don’t hire me!

Martin Grunstein is contactable on 0414933249

 

The definition of insanity

Thursday, February 28, 2019

I was once told the definition of insanity was to do the same thing every year and expect different results. If that’s the case, I believe most businesses in this country are insane!

Let’s use the humble Christmas card as an example. Over 90% of businesses in this country send some form of Christmas card or greeting to their clients every year. I say “STOP DOING THAT!”

Don’t get me wrong. I’m the last person to cut back on the generation of goodwill but I believe there is a better way to spend the money.

Let me explain.

If your clients are anything like my clients, they probably receive 200 cards at Christmas and the majority of them go in the bin (trust me, it’s most likely yours is one of them). So I stopped sending Christmas cards years ago. I now send “Happy November 27” cards!

I got a card printed that said on the front “Happy November 27” and when you open it up it says “I bet you get a lot of cards wishing you happy December 25. How many do you receive wishing you happy November 27? Well, happy November 27”. And on the card I write a personal note to my clients and the people I’ve met and want to do business with in the next 12 months.

I follow the card up with a “how’s things” phone call and I found out that all my clients get heaps of cards on December 25 and they don’t remember who sent it to them but my clients all get ONE card on November 27 and every one of them remembers who sends it to them. My best result from the cards was in 1994 when I generated over $20,000 of seminar work from the cards because they were different and helped me stick in my customers’ minds.

Let me give you three good reasons why I choose not to send Christmas cards.

Firstly, it costs the same to send your goodwill cards on November 27 (or any date you choose. If you’re an Australian company, send them on Australia Day) as it does to send them December 25. The only difference is that they are remembered.

Secondly, if you send them at Christmas time, everybody closes down. By sending them on November 27, I can follow up with a “how’s things” phone call in early December and write business for next year.

And thirdly, and most importantly, I never forget my wedding anniversary........ which is November 27!

The point I’m making is do something different. Don’t just do things because you’ve always done them. Challenge yourself to defend why you’re doing it and more importantly, is there a better way to get an improved result?

Sometimes ideas out of left field are our best business generators.

A Sydney petrol station proprietor used a quote of the week on a blackboard outside to generate business. He offered $100 for the motorist who comes up with the funniest quote and the proprietor reckons he did $3,000 a week in incremental petrol sales from motorists buying petrol and giving him suggestions for the next week’s quote. Not only that, he got publicity from a radio station that used to quote what was on the blackboard as part of its breakfast programme. Nothing to do with petrol? True. Clever? I think so.

A Sydney restaurant decided to take the prices off the menu and let customers pay what they thought the meal was worth. Not only was this an attention getter for the restaurant, on average people paid 10-20% more than the prices that would have appeared on the menu.

A Melbourne hairdresser was very upset with the local paper when the photo in their advertisement appeared upside down by mistake. That is, until the ad produced twice as much business as normal (because it was different from the other ads and people noticed it) and now the photo is upside down every week.

You don’t necessarily have to do radical things to make an impact. Just do SOMETHING different. In the competitive world our prospective customers, judge us by our differences, not our similarities.

I challenge you to take a long, hard look at the way you do your business and if you’re not doing anything different from one year to the next and you’re expecting different results..............YOU’RE INSANE!

Martin Grunstein contactable on (02) 96623322 or via email at martin@martingrunstein.com.au.

 

Promise + deliver

Thursday, February 14, 2019

I’m a pretty good talker but there’s one situation I can’t talk my way out of! “You lied to me last time so why should I believe you this time?” So I make sure I never get into that situation.

And it’s not that difficult.

Yet the above situation is the most common cause of lost customers, even customers of long standing, and in the majority of cases they have no complaints with the company’s products or prices.

Despite all the time and money we put into product development, quality control, advertising, merchandising and other business activities, the major cause of customers deserting us comes down to little things like unreturned phone calls, missed deadlines and basically not keeping our promises.

And quite interestingly, this is almost always totally avoidable.

If you make a promise, you create an expectation in a client’s mind. If you create that expectation, you must meet or exceed it to maintain the relationship. If you fail to live up to it, you have no right to do business with them.

But most businesses put unnecessary pressure on themselves by creating unrealistically high expectations in their clients’ minds - then disappointing them.

Let me give you a relevant personal example.

It took me seven travel agents to organise my honeymoon a few years back.

The first six travel agents let me down so I refused to give them my business. The seventh travel agent had an easy job. I gave them the money, they gave me the tickets.

In February, we were planning a three week trip to the U.S. for November.

I went into a travel agent and, after chatting, asked him to put together an itinerary for the trip. I had every intention of doing business with this travel agent. I told him I was in no hurry but the travel agent promised the itinerary would be ready the next Monday.

When I hadn’t heard from him by the next Wednesday, I rang him and he promised it would be in my hands by Friday. The next Tuesday I still hadn’t received it and that’s why I decided not to do business with travel agent number one.

He broke his promise to me twice and I didn’t trust his future promises when it came to looking after my travel plans. And that’s what we buy from people we do business with - TRUST!

But the crazy thing was that he put all the deadline pressure on himself. I even told him I was in no hurry. However, once he made a commitment to have the itinerary to me by a certain date, he created an expectation and when he failed to live up to it (twice, mind you), it all came down to “You lied to me last time, why should I believe you this time?”

Believe it or not, this happened on five separate occasions with five different travel agents. All made promises, put deadline pressures on themselves and failed to keep their promises.

The sixth travel agent abused me for suggesting a change in the itinerary after all the trouble she had gone to and the seventh travel agent got the money, did very little work and benefited from the ineptitude of the previous six travel agents.

May I offer some simple solutions?

Please ask questions as to the urgency of a task and, most importantly, if you take on the task, commit 100% to having it completed on or before the agreed deadline.

If the first travel agent, after asking questions, would have promised me the itinerary in three weeks, and delivered, I would have been totally satisfied.

I believe a lot of the problem comes from “Boy Who Cried Wolf” syndrome.

Sadly, we are so used to being let down that we often give artificially urgent deadlines so that if the task is completed “late”, we still haven’t missed our real deadline.

This doesn’t just happen in business either. Haven’t we all told certain people who traditionally turn up late to social events to be there at 7.30pm. if we want them there by 8pm.

But in business, it happens with internal as well as external customers.

For example, a boss needs a report typed for a meeting with his superior at 4pm. He tells his secretary he needs it by 1pm because he knows she often fails to respect his deadlines but if he tells her 1pm she should have it done by 4pm.

But what does the secretary think? “He always gives me fake deadlines. If he says he needs it by 1pm, he probably only needs it at 4 or 5pm. I’ll have it done by then”.
You know, a lot of internal and external customer relationships work that way. Who suffers? Everybody! It leads to fighting internally, usually with everybody blaming everybody else, and lost customers externally.

The solution is a few questions upfront and a respect for your word.

If the boss and secretary agree to stop playing games and that the boss will never give the secretary artificially urgent deadlines and the secretary will deliver on time as long as the boss appreciates their situation and doesn’t expect everything at once. Perhaps the boss and secretary may work together in prioritising the urgency of the work given to the secretary, who is then freed her from the responsibility of hitting unrealistic deadlines and being a mind reader with respect to which piece of work is the most important. With a little mutual respect, harmony should be the end result.

In the external customer situation, let’s ask a few questions to establish the real deadline for the task and find out whether we can deliver before we commit to the activity.

I would rather deal with a company that said I can’t do it by Monday but I promise I can have it done by Thursday than one that promised completion on Monday just so I wouldn’t go elsewhere and then failed to deliver on time.

I know where I wouldn’t go next time!

This same principle should apply to everything from a multi-million dollar order to returning a phone call.

Keeping your promises is not just good manners, it is the foundation for a business that wants to grow based on repeat customers. And all it takes is a simple understanding of the impact of time management on your customer service.

I challenge you to do two things.

Firstly, ask questions to establish realistic deadlines so you don’t put unnecessary pressure on yourself and secondly, commit 100% to any promise you make.

A business that does these two things will have enough positive word of mouth, internally and externally, to be a leader in its field.

Martin Grunstein’s work with over 500 Australian companies across over 100 industries has made him the country’s most in-demand speaker on Outstanding Customer Service. He can be contacted by email at martin@martingrunstein.com.au.

 

What’s your first impression like: mean or keen?

Thursday, February 07, 2019

There is much written and spoken about the importance of first impressions. Lines like “There is no second chance to make a good first impression” and “People judge you in the first five seconds after they meet you”.

If it is acknowledged that first impressions are so important, then why do so many “professional” businesses make such a poor first impression.

What’s the first thing they ask you for when you check in to a five star hotel? A credit card imprint. Why? Because you’re a thief! And that IS the real reason.

How many businesses can you think of that get a credit card imprint before they’ve even served you? Would you put up with it in a restaurant? I don’t think so. Would you accept it if a retailer took a credit card imprint when you entered the store in case you did a runner with some stock? I don’t think so. But in the industry reputed to have the best service in the world, they create a terrible first impression.

And what’s much, much worse is that you can stay at the same hotel 10 times and pay your bill every time and they STILL ask for a credit card imprint when you check in the eleventh time.

One of the oldest truisms in life is that people act the way you treat them and that is why so many people steal things from hotels. They treat you like a thief, so you act like one. In fact, I was once told the rule at hotels is quite simple - If it’s not nailed down, it’s complimentary! Someone else even suggested that if you can pry it loose, it’s not nailed down but I think that’s taking it a bit far.

Ironically, I was running a seminar in Ulverstone, Tasmania and a lady told me she had run a bed and breakfast for 22 years and never asked for a credit card imprint because that’s rude. And in the whole 22 years she never had one bad debt! I guess people do act like you treat them.

Why do the big hotel chains treat you like thieves? Because all their competitors do. If Hyatt stopped asking for credit card imprints from customers (or even just stopped taking credit card imprints from people who had stayed there before and paid their bill) so would Hilton, Sheraton and all the others. At the moment, it’s not costing them any more because their competitors are making no better first impression.

But you might not be so lucky.

A lady told me she was browsing in a newsagency and one of the staff came up to her and said “This is not a library, either buy the magazine or put it back”. She did buy it - AT THE SUPERMARKET ACROSS THE ROAD and continued to buy three magazines every week from that supermarket for the next FIVE YEARS!

A businessman told me that having moved to a new area he rang up a local printer and asked about starting an account there. The printer growled back at him “You have to do a minimum of $70 a month to start an account”. The businessman hung up the phone and went to another printer where he did approximately $4,000 a month in business for the next 11 years.

Am I saying the printer shouldn’t have minimum transaction level for account customers? No! Am I saying that the newsagent has to watch someone read but not buy magazines every day for months without saying anything? No! I am saying that we should give people the benefit of the doubt and not yell at everybody because of the sins of those who went before them.

In the printer’s case, set up the account and if the transaction level is seen to be low after a few months, have a quiet word with the customer and explain that it is not profitable to run an account for the low level of business.

In the newsagency, watch your customers and let them browse but if you see the same person reading magazines day after day without buying any, have a quiet word with them.

It’s hard enough to get people to do business with us without treating them like criminals before we’ve built a relationship with them. And it’s potentially very costly as in the above cases.

Have a look at the first impression your business creates. Are your customers welcomed or treated with suspicion?

You think bad first impressions are not common? How many of the following situations have happened to you? You are waiting to be served in a department store while two staff members are having a personal conversation ; you ring a business that takes 10 or more rings to answer the phone; you are put on hold by a receptionist and not returned to for what seems like an eternity; a tradesperson says they’ll quote on a job and you never hear from them again; a salesperson says they’ll return your phone call and you never hear from them.

I have had ALL those things happen to me and I wouldn’t be surprised if ALL of them haven’t happened to you too.

Newsagents of this world: let me browse for a little while and I’ll be happy and the odds are I’ll buy that magazine from you rather than the supermarket across the road.

And if you ever have some time on your hands and want to have some fun, check into a hotel and when they ask for a credit card imprint, act surprised and ask them why. After a lot of sidestepping with lines like “it’s the policy of the hotel” to which you reply “why would that be the policy of the hotel?” they’ll eventually tell you it’s in case you run off without paying your bill. It’s nice to watch the reception staff squirm before they have to eventually tell you the truth!

 

How to compete with the internet

Wednesday, January 30, 2019

For many years at conferences one of the questions I often get asked is “how do we compete with the prices people can get on the internet?”

My answer is always the same.

I tell people that the internet helps people make bad decisions quicker!

If a business provides nothing more than a basic product at a price, I may as well get that product cheaper on the internet – but I hope YOUR business doesn’t provide a basic product at a price because the only businesses that can survive with that strategy are the huge mass merchandisers who make their profit from high volume, low margin transactions.

If you are competing with the internet or any high volume, low margin competitor, you need to sell what they are NOT selling and that is things like peace of mind; service; stress management; added value etc.

Let me give you a classic example from the travel industry which is an industry that really competes with the internet because more and more people are booking their flights on line.

A customer was organising a trip from Melbourne to London and a few other places in Europe with their travel agent. When the travel agent organised the itinerary and did the quote the client came back and said “I’ve been doing some investigation on the internet and I can get a flight home from London to Melbourne $500 cheaper if I book on line.”

The travel agent, who has access to the same internet sites, said that there was no way she could match that price and left the customer to organise the travel herself.

Everything proceeded smoothly until the customer came to the airport to board her cheap flight home. It turned out the flight was going to Melbourne, FLORIDA in the United States rather than Melbourne, Australia. It took the customer time, money and huge amounts of stress to get back to Australia and she never questioned her travel agent again when it came to booking airfares. And the travel agent has a story to tell all her customers who suggest that they can get something cheaper on the internet.

Now, the travel agent sells stress management rather than cheap airfares and this is a much less price sensitive product to sell.

This applies to all industries.

A golfer turned up to his regular Saturday game proudly showing his mates his new driver. He proudly told them that this driver normally costs $700 but he got it on e-Bay for $499. Four hours later after hitting every drive badly he told his mates sadly that he was putting it back on e-Bay and was hoping to get $100 for the club. If only his local golf pro or retailer would have told him that he can have a free trial of any club he chooses to make sure it suits his game before he makes the purchase, maybe that would have saved him a lot of money and even more embarrassment.

That’s how to compete with the internet. Sell risk management and peace of mind, not a commodity product. The travel agent shouldn’t have been selling a point to point airfare, she should have been selling “I’ll take the worry out of everything for you, you just enjoy your holiday”. If you’ve seen me speak, you will have heard my story about six dollar haircuts. Well, there are lots of “six dollar haircuts” to be found on the internet.

Of course there are lots of genuinely good deals for genuinely good products and services on the internet but what you’ll never get from an online transaction is a relationship with an individual you can trust and accessibility to someone who can reassure you about your decisions if you are feeling nervous. Now, that may not be tremendously important in ordering a home delivered pizza but I think it has to count for something when I am planning my financial future; or going on a world trip for the first time; or even investing a significant amount of money in a golf club.

One of the key points I make in seminars is “you don’t fight fire with fire, you fight fire with water”. Don’t do what your competitor does, do exactly the opposite! If he discounts his price, you reinforce the value added services you provide to show that your offer has more value.

A classic case where this was successful was in the steel industry. I was working with BHP in the mid nineties when steel imported from Asia started to have a significant effect on the Australian company’s sales and profits. We developed a great sales strategy against the imported product. “Is it worth saving a few dollars a tonne on steel if there is a union dispute and you can’t get the imported steel into your construction causing your whole project to be delayed? That will never happen with Australian made BHP steel.”

The nineties was not a time of turbulent industrial relations and most imports got into the country on time. BUT WE SOLD FEAR and some of the companies didn’t want to take the RISK that their whole project would be held up so they paid a little more for the local product. Peace of mind was a value added that was worth the price difference in the minds of some of their customers.

I think you have to do the same to compete with the internet.

If we use the golf club example, the retailer should sell the following value added: Try my whole range of products so you can choose what suits you best; Take a trial club for a round or two to make sure you can get results with it on your course before you buy it; I can even have a look at your swing and give you a few tips that will help your game as well as getting you better results with the club. You can also ring me any time to ask any questions you may have about the club or golf in general; And I’ll remember you when you come back for another purchase and we can work together to help you get the most enjoyment you can from your golf.

Where are all the above value added when I pick up a “cheap” club overseas or on the internet? They are just not there.

But the timing is the key issue. We need to communicate the value added BEFORE the customer makes the purchase.

If you are losing business to the internet, the chances are you are not communicating effectively to the marketplace what they get from you apart from the basic product at a price. The solution is to stop selling the product, sell risk management; sell convenience; sell your human relationship; SELL FEAR!

Martin Grunstein’s results with over 500 Australian companies across over 100 industries has made him an in-demand professional speaker on Outstanding Customer Service. He is contactable on martin@martingrunstein.com.au.

 

 

 

How much ineptitude do you tolerate?

Thursday, January 24, 2019

I have just had a frustrating experience with a bank! I understand this does not make me a unique individual. But due to the ineptitude of the bank’s lending officer, I almost lost a property that my family had their hearts set on!

Again, being on the receiving end of a BIG stuff up by a bank doesn’t create a ripple of surprise when you tell your story to friends or anyone who’ll listen. In fact, you often hear more and bigger stories back from the people you’re trying to astound with the level of ineptitude you’ve been a victim of!

But what IS interesting is that people telling the stories, like myself, continue to deal with that bank. And why is that? Surprisingly, the answer has nothing to do with marketing and much more to do with human nature (which in my opinion is what marketing is all about anyway) reflected in a simple adage: “It’s better the devil you know than the devil you don’t know”. No matter how inept your contact is at your bank, there is no guarantee the contact at a different bank is going to be any less inept. So we stay with the inept person we know.

Is that strange in the context of human behaviour? Actually, it’s not. For example, when people go to conferences, they sit with people they know rather than people they don’t know. Now, I don’t specifically mean friends they know, just people they know. In fact, most people would rather sit next to someone that they know but don’t particularly like rather than sit next to someone they don’t know (better the devil you know....). Can you relate to that?

Let’s now apply this concept of human behaviour to the real world marketplace.

How much ineptitude will the consumer tolerate? The amount of ineptitude that makes the competitor a perceived credible alternative. And that is different for each consumer.

If you just read the above statement once, it sounds very basic and not very insightful. But, if you read it the context of the rest of this article, I assure you it will impact the way you view your competitive situation.

When I’m angry with a bank, I look at alternatives. Apart from a couple of lateral alternatives, if I have a business and a private account to run, the competition is another major bank and the general perception is that they are all just about as good or bad as each other, therefore, better the devil you know...

However, let’s look at what happens when circumstances change.

I was doing some work in the telecommunications industry around the time that Optus launched on to the market. Telecom (as they were called at the time) lost 15% of its business in NSW. to Optus. Despite the proliferation of price advertising at the time, the overwhelming majority of people who went to Optus left because they had a grudge against Telecom and would have gone to Optus even if they were more expensive. There was finally a perceived credible alternative.

Monopolies are rare but in all sized businesses, the skill of the game as a new entrant or growing business is to provide this perceived credible alternative. And the key here is the word PERCEIVED.

I have heard people at seminars tell me amazing stories of the lengths to which they have gone to punish businesses who treated them poorly. One man said he drove over 150 kilometres rather than buy a car from his arrogant local dealer; a lady told me she walks an extra half a kilometre to get her lunch every day so she doesn’t have to give her money to the rude person in the sandwich shop next to her office; a lady told me she goes to a hairdresser a suburb away from where she lives because one of the juniors at her local salon told her that her hairstyle looked terrible and she should try something different (she’d had the same hairstyle for 20 years); a couple said they’d not buy the home they’d fallen in love with rather than give commission to the sleazy real estate agent listing the property. Stories like these are common and I’m sure you have a couple of your own. I know I do.

The important thing to learn from this is that what is a substitute (or a perceived credible alternative as I referred to it previously) is subjective. One person will drive 150 kilometres to punish a car dealer, another won’t; one person will walk half a kilometre to punish a rude sandwich bar manager, another won’t. The key from a marketer’s point of view for a growing business is to provide as credible an alternative as possible to the market leader and keep attacking the leader’s weaknesses.

A perfect example I heard at a conference was that Dick Smith in building his electronics empire (which was one of the fastest growing businesses in Australian history) had a strategy. He always opened a new Dick Smith Electronics store as close as possible to an existing electronics store that was providing poor service. That way he had a natural flow of new customers from day one.

Of course, sometimes you have to create the discontent in the existing customers’ minds. A new launderer had an opening offer of 20% less than the existing provider. The existing provider’s response was to match price to wipe the new guy out. The new launderer found a way to create discontent. He told the customers who rejected him because the incumbent had matched price - “If he’s dropped his price after all these years just because I came into the market, he must have been ripping you off in the past. Why don’t you ask him to refund you the 20% he’s been overcharging you for the last 10 years?” And do you know what? A number of those customers thought about it and gave the new launderer the business because he had created the discontent that made him a credible alternative.

This concept applies to many areas. For example, a lot of people were surprised that, after the “cash for comments” scandal of the late nineties when both John Laws and Alan Jones were found guilty of duping their audiences by giving their sponsors’ preferred opinions as their own, amazingly their ratings were almost unaffected. I believe their continued ratings success was not so much a function of their audiences being blindly loyal or very stupid, it was a function of the fact that in breakfast and morning radio there was no perceived credible alternative. Their listeners had to listen to SOMEONE on the radio and even though they might have been peeved at the announcers’ behaviour, there was nobody else offering a similar, acceptable alternative in the minds of those listeners. Again, better the devil you know...

We’ve talked about how growing businesses can attack existing arrogant business. What about the existing business? How does it stay strong in the face of competition?

Firstly, don’t rest on your laurels. A solid market share today doesn’t guarantee a solid market share tomorrow. A technological advantage can be duplicated; a location advantage can be wiped out by a competitor moving into the area; a people advantage can be lost by an employee going to work for the competition.

The intelligent strategy is to keep your levels of service and recognition high, even if there is no immediate threat. The more goodwill you create by recognising your customers now, the less likely they are to consider your competition tomorrow. Things like thank you cards; remembering customers’ names; recognition functions for top customers; “how’s things?” phone calls to talk to them when you’re not selling them something all add to the goodwill of the relationship and build your buffer zone to the existing or potential competitor who will try to position themselves as a credible alternative.

I don’t care if you do it for the right reason - because you genuinely care about your customers - or for the wrong reason - because you are scared someone is going to steal your customers - the important thing is to JUST DO IT.

Martin Grunstein’s results with over 500 companies across 100 industries have made him an in-demand speaker on Outstanding Customer Service. He is contactable on (02) 96623322 or email martin@martingrunstein.com.au.

 

Get off my back

Thursday, December 20, 2018

Those who’ve been in business a while will appreciate that in the last five to 10 years more people are putting their “two cents worth” into buying decisions than ever before. And many of them have no expertise in the area in which they are asserting their influence.

For example, CFOs are telling people in all departments to cut costs; husbands and wives are telling each other to trim their budget on “non-essential” items (and what one person calls non-essential is very different from what the other calls non-essential); employees are having to justify to management why they are making purchases that used to be automatic – these could be everything from the type of motor car they receive as part of their package to chocolate biscuits in the coffee room.

So, as a salesperson, in many cases the greatest obstacle to making sales at satisfactory margin is a person you don’t even get to see!

So what do you do?

Most businesses have dropped price as a strategy and claimed it’s just a part of the “tough times” mentality and that skinnier margins are a fact of modern business life.

I beg to differ!

I believe the correct strategy is to give the customer reasons to get the other person off their back even if they don’t tell you they have someone else to get off their back (and in most cases they won’t tell you).

Let me relate to you a story from my own consumer experience that illustrates the point.

Several years ago I was walking through a Sydney shopping centre with my wife and I came across a franchise called the Muffin Break. Now, Muffin Break sells muffins that are full of fat and sweet stuff and other rotten things………and I wanted one! But I had a problem in that my wife wasn't going to let me have one.

I was resigned to missing out on this wonderful taste sensation when I noticed a sign that said “NO CHOLESTEROL, HIGH FIBRE, LOW SALT” (none of which matter to me but those things are important to my wife, she’s a health professional) so I said to my wife in my most timid voice “Look darling, no cholesterol, high fibre, low salt. I think those muffins are good for me”. And after a short pause, my wife said “in that case, dear, you may have one”. And I felt terrific because not only did I get to enjoy the muffin but I out argued my wife (a rare occurrence which I savoured more than the muffin itself).

I reckon that sign is the difference between whether the franchise owner takes home $20,000 a year or $120,000 a year because it gives me the reasons to get the other person off my back without me having to ask for them. It’s not just my wife and myself, it could be the young person on a diet saying to themselves (another person we have to get off our backs is our own self!) “high fibre, low salt, I can justify it”. Or the elderly couple who’ve just come from the doctor after finding out they have sky high cholesterol so they see the low cholesterol sign and they buy the muffins. Now, you and I and the franchise owner knows the fat in those muffins will kill them in a fortnight but making the sale is all about giving people reasons to justify to themselves and others at point of purchase.

Now, let me turn this around and tell you how I use this concept in my business experience to sell my services.

Since the mid-nineties I have been offering 12 months marketing consulting, FREE OF CHARGE, to all clients who book me to speak, even if it’s just one presentation at a conference. I write articles for their newsletters; I critique the “reasons why” they brainstorm after the session I run with them; I am even happy to critique their copy for their print advertising. I promise to reply to every email I receive (or faxes in the olden days) and do all I can to contribute to their bottom line even when I’m not speaking.

Why do I do this?

Simple. I get much of my business, in fact, most of it, from someone in a seminar audience who goes back to their boss and says very enthusiastically “we should get Martin to speak at our conference”. When they find out how much it’s going to cost the boss says something like “we’re not paying that much money for an hour”.

The person from the audience can then say “we don’t just get Martin for an hour, we get him for a year!” They then explain the free consulting and in many cases the boss can justify my fee over a year but he/she can’t justify it over an hour.

Two factors come into play that work in my favour.

Firstly, I get paid up front so I don’t have to wait a year for my cheque and, secondly, most of my clients NEVER take up the offer of the consulting – it is just a reason to justify the expenditure. Ironically, the ones who do take up the consulting are my best clients and I get more business and referrals from them so I win either way. But giving people reasons to get their bosses off their backs has been instrumental in winning me some terrific jobs that I don’t think I would have otherwise have won.

Another very important thing from a marketing point of view is the fact that after doing this automatically for so many years I have worked out that the marketing consulting is only critical in the purchase decision to about 25% of prospective clients BUT I DON’T KNOW WHICH 25%, SO I TELL EVERYBODY.

I can’t emphasis enough the importance of giving everybody all the “reasons why” even if they tell you they don’t have anybody they have to get off their back because sometimes their ego prevents them from telling you the truth. I say in seminars that some of the people who tell you that they make all the decisions are the same people who have to go home and ask their wives if they can come out and play with you!

These days we have to give people 10, 15, 20 “reasons why” because two are going to matter to me and a different two will matter to my boss and if you don’t get the two that matter to my boss into the equation, you may miss out on the sale or have to discount your price significantly to get it.

Martin Grunstein works with over 500 Australasian companies across over 100 industries in the area of customer service. He is contactable at martin@martingrunstein.com.au

 

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