Tag Archives: business

O Customer, Where Art Thou?

KolejkaI really really REALLY don’t think there will be only one post about customers. Really. But I had to start somewhere, so here goes.

The way this laser hair removal place started acquiring customers was rather funny. The owner worked on the fifth floor of the same building in the similar laser hair removal place (only smaller and less clean) when suddenly the owner decided to call it a day. His customers were left out in the cold, many of them in the middle of their voucher deals or packages. The guy pretty much just packed and went home. Given that technicians (there were two) were in charge of their schedules, it was only natural that most of the customers had their personal cell phone numbers. So when the business closed they started ringing up the technicians. Instead of brushing off they decided to explain the situation and offer these customers an option to wait until this new business is up. Since all of this was happening during summer – not the best time for laser skin treatments – a lot of customers agreed to wait it out. There were some misunderstandings and a lot of angry words exchanged, but at the end of the day most of it got resolved.

Once the place was up and running the owner got on the phone again reaching out to old customers. Of course, it wasn’t overly smart to offer them to complete the treatment for which they paid someone else. However, the thinking was that a couple of sessions wouldn’t be that big of a price if the owner would be able to sell them a package of her own. It didn’t always work, but the place got their schedule up and running pretty quick and people were coming in every day.

customer_queueWe started ringing up deal sites. It was a bit unexpected (although understandable) when some of the sites refused to deal with a new business because it was new business. Other sites couldn’t care less. Groupon was the first to take us on, their only focus was pricing – they low balled us to something almost totally outrageous. We haven’t had much experience with any deal sites from the merchant perspective, so it was sort of a revelation to find out how these sites treat both merchants and customers. Words like “customer loyalty” and “quality customer base” started making a whole new world of sense.

One of the sites (I think it was LivingSocial) flat out told us to go and buy likes on Facebook (either through FB’s own ad campaign or otherwise), because they will only deal with us if we have at least 100 or so likes on Facebook. Not a big deal, but if you had your company opened a week ago a hundred likes might seem like a problem. Amazon Local demanded a certain rating on Yelp in order to run our deal. When I flat out asked “So you’re Yelp’s bitch now?” they really had nothing to say except “effectively – yes”. One of the largest deal sites on the market being subject to restrictions of another company, well known for their shady practices of falsifying a businesses’ ratings and reviews – that was just too funny.

Still we managed to get some of our deals up on Groupon, Lifebooker, KGB Deals and, eventually, Amazon and LivingSocial – some time later. That’s when the “customer quality”, “customer loyalty” (or “customer retention”) started making all kinds of different sense.

Let me get this out of the way. 90% of coupon customers aren’t worth the time you spend with them on the phone to schedule an appointment. It’s the other 10% that are the reason for doing the coupon site deals. Each category, obviously, deserves a separate post – which I will probably have to do, eventually.

customer_serviceStrange as it seems there actually is a difference between clients coming different coupon sites. The deep dive probably deserve a separate post altogether, but in a nutshell – we’ve seen the worst coming from Groupon and Lifebooker, the rest are marginally better. One thing where you may regret having loyal coupon customers is when they like you so much they keep buying vouchers all over the place – whatever it takes as long as they keep getting treatments at your place at coupon price. They will never convert and they keep bringing more loyal coupon users, so we decided to force “New customers only” rule on most of our deal contracts after the first wave. It may not sound nice to customers, but it’s a way to cut losses. If they like our services so much they should definitely try to negotiate a deal (and it’s always a possibility with the business like this), instead of trying to cheat your way through.

Here’s a little story to explain.

We had one customer who absolutely loved our service. At least that’s what she said during first five sessions of her coupon treatment. She went and bought four more vouchers (from the same deal site – we didn’t have any other deals running at that moment) – using friends’ credit card with option to “gift” a voucher to someone else. When we pointed out she was effectively cheating the coupon site and gaming the system and that we refuse to honor more than two vouchers out of all five she owned (a perfectly legal move based on our contract with coupon site which stated “one voucher per client plus one as a gift” – or something like that) she decided that we have the worst place ever. She complained to deal site – and they confirmed we did the right thing and warned to ban her AND her friends from the site for cheating. She demanded that we provide her with free session for this occurrence of horrible customer service. She promised she will write a negative review on Yelp – which she did, calling us liars for not honoring a single voucher. Not that we care much about Yelp (we’re not paying them to remove bad reviews, so there’s that), but we took note and responded to review, of course, explaining what exactly happened and how the customer was in the wrong. Given that you can’t really inject any brains or conscience into such customers we decided to implement “new customers only” rule. At least it saves us from drama at the office.

The Only Good Time For Optimization Was Yesterday

As a part of my responsibilities in managing things the word “optimization” doesn’t come up often enough. Not a single business is against growth. Almost every one of them has a fear of optimization. Optimization is disrupting, hard and rarely bring shiny new stuff into the house. Instead, it’s like refitting your Ford Pinto with 2012 Mustang’s engine. Still looks like Pinto, only doesn’t go BOOM anymore.

The word itself has got a bit of a bad rap to it, usually meaning drastic cost cutting measures, layoffs and other ugly things introduced by “effective managers” (or “effing managers” for short). The real optimization rarely has that ugliness to it- going back to the previous example it is like putting s new engine in an older car.

The truth is, of course, that optimization is necessary – what got you to your current level isn’t necessary good enough to get you to the next. You realize that you hit the ceiling, reached the threshold, filled to the capacity. You need to break out of the box, shift the paradigm or in other words – you’re gonna need a bigger boat.

That’s where the real optimization come in. And – it’s late to the party. Optimizing when you already are stranded, short on time and resources is like trying to load up on already overloaded truck hoping that once you make that one critical trip everything is going to get easier. History and experience shows that it won’t. That’s why you need to start optimizing before the need arises. If you think you need it today – you’re late already.

A lot of companies decide to start small – it is a matter of startup capital, of course. But when planning their growth they often put unrealistic goals in order to account for it, while in the real life by the time they reach the threshold they optimize and they do it in the time that is least suitable for it. Instead of concentrating on growing the business they go back to the drawing board.

Your optimization should start before you need it. Ideally, you can start a process of ongoing optimization, an iterative process that runs in parallel with everything you do. As an example – every month you review your sales revisit your processes (at least some of them) and see how they can be improved to free up resources – get more sales, serve more customers, ship product earlier.

It should start yesterday.

Three Web Site Decisions – The Good, The Bad and The Ugly

Having not posted for quite awhile I have accumulated a number of stories to tell. Today is one of them – or rather three similar stories about some decisions that web site owners are making and how it affects their business.

Three Web Site Decisions - The Good, The Bad and The Ugly - Small Business BlogThe Good
Imagine an online store that doesn’t sell anything. Yep, there are certain niches that – no matter how hard you try – will not sell as good as you think. This business owner is in one of them, provided he has a show room full of merchandise. The web site is a mere catalog with pricing. However, if you just take out the online checkout option – you suddenly don’t seem credible enough. It reads like “I’ve got all this great stuff from all over the web, but in real life I’ve got one dusty shelf“. So you have to make it look like you’ve got stuff ready to go – only to lure customers to the show room.

The good decision – figuring this stuff out and presenting the customers with the choice to buy stuff online, even though almost no one is really buying.

The Bad
Three Web Site Decisions - The Good, The Bad and The Ugly - Small Business BlogThis is a diverse category because you can drop pretty much every single major issue with your web site – from non-working contact form to eye-scratching design from 1980s to web sites that never finish to load because your friend’s son who put it together didn’t realize that cute kitten picture on a front page is 15MB BMP file. But rather than talk about these, easily addressable issues, I’d point to a really major one – not having any kind of web site. Imagine – there are businesses out there who decidedly go without web site at all. There are usually two main justifications – “we don’t need one” and “we don’t have money for it”. It’s almost like wishing for a win in a lotto without buying a single ticket. Aside from the fact that people prefer to shop from the convenience of their homes (less clients for you), there are more choices online that you will ever have in your inventory (again – less clients for you), you are also limiting yourself by not pitching to those who actually are interested in what you want to sell to them. With the average rent on any decent store around tens of thousands of dollars per month a budget web site would cost you a lot less than that. And, of course, there is the rationale that you can only save as much as the web site costs, but your earnings are really not limited.

The bad decision – not having a web site for your business. In fact – its the worst decision you can ever make.

The Ugly
Three Web Site Decisions - The Good, The Bad and The Ugly - Small Business BlogOne of the worst things you can do to your web site is keep relaunching it every few months on a new domain names. It’s not a secret anymore that your domain name equals your brand – twice true for small businesses. Of course, you can launch a new web site on a new domain name if you used to be GreatWidgetsOnline.com and you have just bought GreatWidgets.com – it’s not a major major change, but rather a welcome convenience. However, if you keep relaunching the site from GreatWidgetsWeSellHere.com to ThingamabobsOnlineRightHere.com to WhatchamacallitSalesForYou.com – it’s not really clear how you are going to attract the customers and keep them around. Even if there were some issues associated with your domain before – it’s easier to fix them than rebuild the whole thing from the scratch. Besides, even if there was some bad press – you can always use it to your advantage.

The ugly decision – keep relaunching business web site on different domain names in order to avoid issues associated with previous domain.