No matter what you may be doing wrong, getting these five things right guarantees both repeat customers and new business.
Customers. Without them, a business will die. (With them, a business may still die – just more slowly!)
All joking aside, if profitability is the ultimate objective of doing business, customers are the primary component. You can’t be profitable if you’re not selling anything, and you can’t sell anything without customers. So how do you get them?
In past columns we’ve looked at specific approaches to selling custom work. We’ve detailed a step-by-step system for getting even the most sales-shy greenhorn comfortable with prospecting for, meeting with, and telling his company’s story to prospective customers.
But these are mere tools and trappings of the customer-development process.
There’s a bigger picture, composed of five behaviors. They impact successful customer development to a far greater degree than the use of any particular approach or system. I call them “The Big Five.” Memorize them. Practice them. Make them second nature. If you do, you’ll never lack repeat business or new customers.
Volumes have been written and countless words said about the importance of listening. All of it is true, even more so for anyone trying to sell a custom anything.
Think about it. Producers of gadgets for the masses do market research, which is just another way of saying “they listen.” They identify a need and produce something that you and I can purchase in order to fill that need.
These gadgets offer varying degrees of performance. They may be just right for 99 percent of people. But there’s that other 1 percent who prefer to customize a solution, trick or tool that they like better. These, Custom Woodworking Person, are your customers. And if you’re not paying close attention to exactly what they’re asking for, you won’t get their business.
Another benefit of careful listening is the clues you’ll get for potential future work. “We’re planning to upgrade our conference room after this project is done.” That’s your invitation to nudge this customer toward additional commissions, but you’ll never get the invitation if you’re only half-listening.
#2: Speak Up
Beyond the questions you’ll ask after listening closely to prospective customers, you need also to bring your experience and expertise to the conversation.
People call custom woodworkers because they can’t find something that meets their requirements. Whether those requirements involve function or form, you need to let your prospects know what is realistic and what is fantastic. Or, more to the point, fantastically expensive. This doesn’t mean you should discourage them from doing it. Au contraire!
But part of being a true resource to customers is being frank. Doing so not only enables you to further clarify their needs and wants, but demonstrates your value – reinforcing that they are working with someone who is both trustworthy and is seeking to develop an ongoing business relationship. So put your know-how to work and don’t be shy about sharing your opinions. Just do it respectfully and in a manner that shows you’ve got your customer’s best interests in mind.
#3: Be Accessible
Few things are more perturbing than giving someone thousands of dollars – or thinking of doing so – and then having difficulty reaching them. If you’re doing custom work and consider customers’ questions or phone calls a nuisance, you’re in the wrong business. That’s true whether you’re working with architects, interior designers, general contractors or private individuals.
You expect others to call you back quickly when you have a question. Why should they expect any less of you?
So, answer your phone, and when you can’t, return messages promptly. If no message is left but you know the caller, call back anyway, just to be sure. The more accessible you make yourself, the more people will turn to you. And that’s exactly what you want.
#4: Mind the Details
When you’re dealing with the fractional portion of the population that knows exactly what it wants, listening, as already mentioned, is the first step in providing it. The second step is getting approval on details about which you are unsure.
We were just talking about the pitfalls of viewing customers as a nuisance. Your goal should be to fall somewhere just short of that yourself, in finalizing the details on your customer’s projects. Trust me, there is no feeling worse than hearing your customer say, “This doesn’t work [or look] like you said it would.”
Nobody’s holding you at gunpoint, forcing you to do custom work. It’s a choice you’ve made. With that choice comes the responsibility for ensuring your customer’s satisfaction. Unless and until a customer says, “Surprise me,” assume you do not have the freedom to do so. When in doubt, check it out.
#5: Follow Through
The most-overlooked practice in building a customer base is also the most obvious: Staying in touch with customers. There are a number of ways to do this: newsletters, e-mail, phone calls and personal visits.
The easiest way may not always be the most appropriate; try to make your contacts with customers as personal and direct as possible. Contact former customers at least twice a year. Ask how their projects are performing for them and be sure to thank them – again – for the opportunity to work with them.
Ask if they have friends or neighbors who might need your services and whether they’ve got anything in the planning stages themselves. Tell them about any exciting changes in your business – more employees, new equipment and the like. Make them feel like they’ve had a role in your success. After all, they have.
By now you’ve likely noticed something: The Big Five are really not about selling at all. Each is about service.
The reason they matter is that, when all other things are equal – price, quality, delivery – customers tend to work with people they feel are the most professional and responsive. In short, the people who serve them best.
The Big Five is a list of professional behaviors which build customer confidence and loyalty. Make them your primary objective with every customer and you’ll be on your way to realizing your ultimate objective: Profitability.
A Question About Hiring
I own a busy tool-sharpening business serving the cabinet industry. Besides me, we have five employees: two outside sales/route drivers, two full-time grinders in the shop and one front-counter/office employee. I split my time among inside sales (30%), purchasing (25%), grinding (20%) and the miscellaneous “other stuff” that owners do (25%).
This wearing of so many hats has left me overextended. What I like most is working in the shop and I’d really like to focus on that part of the operation. My wife has suggested that I hire a general manager to handle day-to-day sales management and to oversee the administrative side of things.
I am accustomed to my income (who isn’t?), and can’t take a big hit in it to hire a manager. I am thinking of taking maybe a $60K loan on my home line of credit to fund one year of a manager in hopes that he or she can increase profit enough in a year or two to cover him/herself. Then I would have a steady income with less stress, more time off, a better chance for continued growth and a better business model to sell at retirement.
What I am concerned about is finding the right person, and whether or not a company of six people and a little under $1M in revenue can support an idea/position like this. What are your thoughts?
— Name and locale withheld
Thanks for writing.
Your company is in one of the growth stages that many small business owners find the most difficult, between four and six employees. This is when change is no longer an option but a necessity – both for the good of the company and, as you’ve discovered, your personal sanity.
It’s good that you wonder about whether current revenues can support this position. The answer, in a word, is no – and the key word is “current.” In order to grow a business effectively, you need always to be charging enough for your product or service, based on current operating costs.
Resist your urge to go into hock to fund this position. That smacks of throwing money at the problem, and as soon as you do that, you’ve given yourself permission to become disconnected. For this strategy to succeed, you need to be intimately involved – not just in finding your new manager, but in getting him up to speed, managing his efforts and holding him accountable to objectives you set.
The best possible scenario for your bottom line is for this person to earn his or her keep from the start, not in a year or two. But how do you make that happen?
Start by running some numbers. Based on current (there’s that word again) sales, how much would you need to increase your prices to cover this position? How does that compare to what your competition is charging?
I tell custom woodworkers not to worry about competitors’ prices, but your business model is profoundly different. You aren’t selling a highly customized product, but a service. A few pennies more or less for a sharp blade won’t be an issue for your customers. A few dollars, however, may well be. On the other hand, if your customer service is terrific, your patrons might accept an increase of several dollars.
So Step One in funding this position is running the numbers. Nobody has a better idea than you about what the market will bear and how much you can afford to raise your prices. (If you’re not already doing cost accounting to determine where the money in your business comes from and exactly where it goes, now would be a good time to start.)
Step Two is coming up with a realistic expectation for what this new position will bring to your bottom line. For example, you said you’re now able to work in the shop only about 20 percent of the time. How much will your increased contribution in the shop add to your company’s total grinding capacity? How quickly do you expect to see the increased sales which will turn that added capacity into added revenue?
Don’t fool yourself into thinking that you can cease all administrative work the moment your new manager is hired. Even when he or she is fully integrated into the operation, you’ll spend around 20 percent of your time away from your bench, managing your manager and in miscellaneous other diversions. Assume that number will be higher for the first couple of months of your newbie’s tenure.
Step Three is to consider options for compensating this person. It sounds like you think $60K is a fair salary, but nothing says you can’t tie compensation to performance.
Based on what we’ve already covered, your new manager’s focus will be on increasing sales. That means setting more aggressive quotas for your outside salespeople and holding them to those quotas, to the greater or lesser extent that the economy will allow. So, I suggest tying at least part of your manager’s compensation to the minimum sales required to pay for his position, with an opportunity to make more if he and his sales force exceed their sales objectives.
I’m especially glad to hear that you are concerned about finding the RIGHT person, and this is one more reason not to take out a loan to pay for the position. It may take several attempts to find a good fit, so this undertaking is not conducive to a one-year trial and hoping it works. Failure is not an option, and the more you think that way, the better off you’ll be.
As you screen candidates, make clear that this is primarily a people-management — and more specifically a sales-management — role. Look for candidates from the sales arena who have a meticulous attitude about paperwork and budgets, because both will be an important part of their responsibilities. For yourself, be sure you’re ready to take orders from somebody else on the issues you’ve hired him or her to handle. If you tie their hands due to ego or control issues, you defeat the whole purpose of creating this position.
Finally, I can’t stress enough how critical it will be for you to establish a great working rapport with your GM. Because you are the owner, employees are going to follow your lead. If your embrace of his or her policies is lukewarm or critical in any way, your employees will refuse to adhere to those policies. There’s nothing saying you can’t collaborate on big changes, and indeed you should. But once a policy change is made affecting the people reporting to him, you have to support that policy 110 percent.
This needs to be a team effort. If you do it right, you’re going to be working a lot harder in the short term, but it can pay off handsomely in the form of those longer-term benefits you seek.
Anthony Noel has written for the magazine since 1994. Send e-mail to [email protected]. If your question is for “Ask Tony,” please put “Ask Tony” in the subject line. Even if your question is not used in the magazine, Tony will do his best to respond personally via e-mail. Because CWB reaches the desks of company owners and managers, we gladly preserve questioners’ anonymity upon request.
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