Sacrificing the One-time Sale for the Life-time Customer

I just have to take a moment to relate my recent experiences on the phone and at a hardware store as I think it does have some equivalent in the online retail world.

The problem

I recently bought a new clothes washer which turned out to be a massive undertaking. Turns out the model I purchased only was made with a door that opened to the left. This was opposite to my former (now dead) clothes washer which opened to the right. I wanted to avoid switching the position of the washer and dryer because of the hassle and need to purchase all new water lines, gas line, and dryer vent hose. Calling up the clothes washer manufacturer yielded no less than three different answers from their service representatives as to whether they did or did not sell a model with a door that could be switched. Here I was willing to upgrade the model I did buy, but couldn’t get an answer. My favorite part of the whole exchange was the last service representative telling me they didn’t offer it but people called up all the time asking for this. Gee—I wonder what that should tell them?

Lesson for merchants:

• Listen to your customers and try to solve the problem—you can win extra customers by doing so.
• If you can’t solve the problem, at least explain why you have chosen not to offer a solution—don’t just reinforce the perception that you know about it but are unable or unwilling to do something about it. (Further research indicated switching the doors led to leaky washers; that’s all they would have had to say.)

Solving the problem

So now that I had to buy all new longer connections for the washer and dryer I needed to make a trip to the hardware store. It’s worth noting that I live only a few blocks from a big box hardware store. My experiences getting help there have been less than stellar. Instead of going to the close store, I went to the smaller hardware store somewhat farther away.

I was standing in the aisle only for a moment when an employee approached and asked if I needed help. I explained what I needed and he proceeded to ask some questions to understand what I was trying to accomplish, and also tested the part he selected to be sure it was the right size. So far, nothing really out of the ordinary. I then asked if I needed thread sealer for the gas connections. He said yes and explained where to apply it. I noted that I already had the ends and only needed the middle part. He then said that I didn’t need the thread sealer then. Now this employee obviously doesn’t get commission on sales so what I buy doesn’t matter to him, but the store management may be disappointed they missed out on a larger sale (small difference though it was).

If you focused on the single transaction you may say the order size could have been larger with the extra item. However, by sacrificing the one-time sale, this employee won a lifetime customer. Not only will I make the farther trip to the smaller store every time, I will likely trust employees there the next time if I do need an extra part or two.

Lessons for merchants:

• Better service can provide a competitive advantage over the big impersonal stores.
• Be sure customers can contact you if they have questions. Emails may work for products with longer buying cycles, but a 1-800 number invites customers to call. Chat can also work depending on the type of products you sell. Each contact is a chance to form a relationship with a customer.
• Sometimes not making a sale can earn you a customer. Make sure anybody that speaks with your customers by email or phone or chat focuses on how a product solves the customer’s problem or meets their need first before they focus on getting an extra sale or upselling to a product that may not be right.

Short-term gains will not outperform building lifetime customers in most cases. Think about the customer and they will think about your store next time they need a product you sell.

Paul Boisvert
Yahoo! Small Business

Get Your Customers to Fall in Love with You

With Valentine’s Day just around the corner, it seems appropriate to talk about love. And before the pragmatists and anti-romantics among you click away for fear of encountering a sappy ode or sonnet, let me clarify that I’m talking about love of buyers for retailers and how you can encourage those “warm fuzzies” from your own customers.

But before I jump to that topic, let me first relate a short recent experience that illustrates this point. I recently placed a take-out order at a local chain restaurant. After taking my order, the manager said it would be about 10 minutes and proceeded to offer me a free drink. Now maybe this is commonplace at some local eateries, but this was a reasonably-sized franchise, and something I had yet to experience, or have seen since at other establishments. Turns out after I asked about this practice, the manager said they do this to keep customers happy while waiting. It’s important to note they didn’t miss out on a sale of a drink because I was done placing my order. My reaction though was one of surprise and a feeling of good will (important disclaimer here is I am a bit of a soda hound). So for the reasonably small cost of a cup and syrup and soda water, this merchant has earned some measure of loyalty from me.

So the obvious way you can apply this tactic is by slipping a “freebie” into your customer’s orders. Maybe you only do it the first time someone orders with you. Maybe you do it for the especially frequent shoppers. The exact process you will follow is up to you based on your knowledge of your typical customer profile (one-time shoppers vs. repeat buyers, etc . . .). You can view this freebie as analogous to a sample you may get in a real store—a chance to try a product with no obligation.

Obviously this notion of a sample only works for certain types of stores (drop me a line when you find the jewelry store with samples). For those stores, there are other things you can do to spread the love:

• Process and ship orders with lightening speed; imagine your customer’s surprise when they get a timely shipment notification. This is an area where smaller merchants have a distinct advantage over larger merchants.
• Hand-sign your packing slips with a thank you note. This tip comes from merchant/developer Rob Snell and he claims buyers have been delighted. A simple “thanks for your business” or “Happy to be your supplier for widgets” can go a long way.
• If a customer adds comments to an order, send an email to them if you have any questions or simply confirming any special request. Buyers will appreciate the feedback.
• Insert your idea here.

So submit your best customer love idea in the comment area below so all Yahoo! merchants can spread the love.

Paul Boisvert
Yahoo! Small Business

[Edit–02/09/07] Check the comments section for some more details around how to determine 1st time or repeat customer status.–PB

12 Posts of Christmas: Tip 11–Don’t Pass on Service in the Holiday Rush

Today’s Y!Store blog is a guest column by retailer/developer Rob Snell of Snell Brothers. Rob posts somewhat regularly in his blog about Yahoo! Store stuff, is the author of Starting a Yahoo! Business For Dummies, and is conducting some more free Yahoo! Store marketing and SEO webinars beginning in early 2007 (or as soon as he gets done with his holiday shopping).

You’ve almost made it! The mad rush of the online holiday shopping and shipping season is almost over. Here are a few last minute tips to keep your spirits bright so you can cross that year-end finish line with your own holiday joy still intact!

Remember, anything you can do that the Big Boys can’t do is a critical advantage that may make the difference between making it and not making it! While customer service is probably the biggest intangible in retail, that warm, fuzzy feeling your customer gets from your outstanding customer service is a big, big deal to most small businesses.

These days seems like almost everything is impersonal, or some pre-recorded operator is paying lip service to how “your business is important to us!” It really means a lot to many shoppers to know that their order puts food on your table, puts shoes on your kids’ feet, and makes the mortgage payment.

I know you know this, and I’m just reminding you, but taking extra special care of your customers isn’t just good manners, it’s good for your bottom line, too! Cultivating repeat business is the cheapest way to get more sales, and you know how much it costs you in pay-per-click advertising to get a sale in the first place. Happy customers are repeat customers, and those repeat orders trickle in throughout the year when it’s so much easier to ship them!

Want to know one of the most popular things we’ve ever done to make our own customers feel more appreciated? Simply writing “Thanks for your order!” on the customer’s ship ticket / invoice and then signing the note has been a smash hit! We get more comments about hand written notes than anything! How many times have you gotten a hand-written note from anyone who shipped you anything? How easy would it be to add a note to every order?

And I know that you’re in a hurry, but when a customer emails you a question or a comment, a little social lubrication goes a long way, especially in these last stressful shopping days of December. I’m amazed at how many goof-ups I’ve personally gotten out of by being nice or by simply apologizing when I make a mistake. “Thanks for your question about our returns policy…” or “Sorry I screwed up the apartment number on your order, but I’m glad the UPS driver caught it,” or “Sorry I sent you the wrong size collar, just keep it. The replacement shipped out today…”.

Also, make sure your staff knows how important your customers are! Set a good example talking to customers, and not only on the phone and via email, but also talking to your own staff! I’ve always thought how you treat your employees is how your employees end up treating your customers when you’re not around, so be careful not to chew too hard on staff these last shipping days! I know it’s not easy!

OK. You’re all done after you ship those last minute express orders! Now all you have to do is finish your own holiday shopping, and then look forward to dealing with product returns, mis-shipped orders, and do all that end of year inventory and tax stuff. No wonder Christmas is stressful for so many merchants. Y’all have a holly, jolly one!

Rob Snell
guest blogger for Yahoo! Small Business