On Customer Loyalty ... ?

[Dan Hintz]

People see that junk from India and where ever priced at $5 and think yours needs to be priced the same.

I did make some money doing personalized signs and metal art that was specialized for pet and horse owners.

And this raises yet another good point, though one not raised often enough, I think. If you make the same thing as a Chinese shop, is there any valid reason to expect someone will pay 10 times more for your version? It's a competition you're destined (and guaranteed) to lose. You might get away with it if the Chinese version is complete junk and yours is totally awesome, but those are few and far between. The real choice is to make something not made by the Chinese (or someone else). I see plenty of posts here about people trying to compete in the business trinket world (stamped pens, calendars, stress balls, etc.), mainly because everyone can order from the same catalogs... if you're competing against 500 people all making the same stuff, the low bidder wins almost every time. Razor thin margins, not a fun way to survive. If you make something custom, there's no one to compete with, which means you can help set the market price.

I gave out a card to my regulars that gave them a 15% discount on their next order if they referred a new customer to me that spent at least $50. A regular waited until he had a $1,800 order, then sent me a referral that gave me a $60 order. Cost me almost $300 to make less than a 3rd of that, and never saw the new guy again.

You missed a key ingredient on that discount card... a limit to the discount, e.g., "15% discount on the first $400 of any single order". The card worked, but it would have worked better if you set limits.

[Dan Hintz]

Paraphrasing you - "a customer should come to me 'cause of what I offer" - if "inexpensive" is what they're after, shouldn't I be offering it, too? (key word: "too".)

Offering a low-price line of items isn't a problem in and of itself, but you need to keep them highly separated. Also, be prepared for customers to try the old "This item (in your premium line) is only a few dollars more than the one I initially asked for (in your value line), so can you upgrade me for free?". The price points need to be either far enough apart they can't honestly try that (and the products will have to reflect the large price difference), or you have to be willing to stick to your guns every time.

That said, what is your time worth? Would you rather 8 hrs/day at $100/hr profit with a quality line, or $40/hr working on the value line where the margin is thinner? You may need to do both initially if times are tight, but eventually you'll want to drop the value line altogether.

[Pete James]

The best way to get repeat business is to maintain a line of communication with your customers. We use a simple email (with prior approval from the customer) program on a regular basis. We sent out x emails daily to a portion of our existing customer base. Usually, with some small special offering, but often just a happy birthday, have fun on Memorial Day weekend, or Happy Christmas (or Holidays for the politically correct). Try and limit the emails so that no customer gets more than one every two weeks. Many will respond to specials, and almost all will remember you when the need arises. On occasion we mail inexpensive samples. Just keep business name and products in front of your customers. By the way - never quit looking for ways to attract new customers. No matter how happy your old customers are with you, that base will eventually dwindle away.

[Amos De Pasquale]

I have read with great interest the advice and opinions given in this thread; in my case I have run an electronics repair shop these past 16 years.
The service and quality coupled with honesty, have kept me going when really the time has come to close.
In those years, I had another unprincipled repairer open up just 80 metres away, he offered "free quotes" and various things to get customers, but did not last and closed up after a very short time.
The flood of cheap imports has affected the repair business, to the point where buying new (but poor quality), has become the norm.
I also have noted in the Pen making business, many selling themselves super cheap, mind you , some of those selling at low prices also are making poor quality stuff.
In general, most people do not have regard for loyalty, there was a day an age where loyalty and quality were the bench mark, however, things have changed, I see it in the society in general, most have an expectant attitude, where you are expected to pick up their litter, you are expected to give them a free handout;
and most will select or vote for the person(s) or goods that represent the "cheapest" or "freest handout". I speak in generalization, realising that there are genuine people out there, but, not enough to run a business profitably.
On my part, I will always aim to give quality and service. Amos

[Gary Hair]

Bill,
I'm going to say this as nicely as possible and please understand it's coming from me with a sincere desire to understand and to possibly help. I have a really hard time reading your posts due to your usage of punctuation marks. I'm not sure what your intention is in using punctuation as you do, but if you communicate with your clients the same way it may put them off. I have honestly never seen anyone write quite like you do and I have been participating in forums for more years than it would seem possible. It would be interesting to see you write a post using only periods - no quotes, no commas, no apostrophe, etc.
If my post offends you then I apologize as that was not my intention.

Gary

[Frank barry]

morning all
I think this is a very good post and some good ideas the thing about sales is half of what you do is of no use (you never know what works and what works for one customer might not work for another) many of us can make things and some are just amazing but very often you find those who can make amazing things cant sell as its a very different skill
I do think you have to be able to buy well so you can sell at a good price and make a good return and in the end of the day we have to compete with products from other countries and there is also a great need to be able to move your business model in different directions with loosing your core and remember we buy from people so to sell you have to be a people person Happy Easter all Frank

[Bill Stearns]

GARY -
No I did not take offense on your commenting about my apparently too casual writing style. Not sure when or why I got into the practice of writing that way? I will see if I can change this habit because easy readability is the key think. And no I do not use that style when writing to customers. Which as Dan might say brings up another good point. Customers or even friends who do not bother to tell us openly and honestly how they feel about things. Our businesses nor products for example. My question: do any of you use customer surveys to learn how your customers actually feel? I am thinking now of implementing one. Somehow anonymous enough where customers might openly speak their mind. Your thoughts on or experiences with surveys?
Okay Gary. How did I do? No quotes apostrophes or parentheses. But already finding I cannot live nor write without commas as you suggested. Can almost feel my 6th grade teacher whacking me with her ruler for omitting them from where they should be used. Seriously I will at least attempt to cut back on distracting punctuation marks and too casual writing. Thanks for bringing this to my attention.

Bill

[Doug Ladendorf]

I had to go back to see what Gary was referring to. To me Bill's use of punctuation was appropriate and perhaps a bit more thorough than most. Frankly I would rather see someone give more attention to what they write than less, which has become more common. (See my use of a comma there… Oop! now parenthesis, yikes!)

[Richard Coers]

I've been reading a lot of your posts on your business Bill. I'm curious if you did any type of business plan or business study before you bought your machine? Just because you wanted a laser didn't mean that a business could be supported in your area. Many restaurants fail because so many people feel that they know how to cook well, so all they have to do is open a door, and they have a business. Same goes with any business of course. Before I started a custom woodworking business, I did it part time for 15 years. I wasn't going to kill a great day job on something that I did not thoroughly investigate. After 8 years in business, I found that I was not cut out to run a business. I was killing myself with 80 hour weeks because I could not say no. My insecurity about the business just about drove me to the grave. I was no good at paperwork, but I was one heck of a good craftsman. I sold what I could, and closed the door. Just suggesting that you look a little deeper, and see if this is what you should be doing. No idea how long you've been at it, don't even know if this is full time for you. But everyone is not cut out to do just anything they think they can. It takes a passion and immense creativity to run a small business.

[Jason Hilton]

I always found the way Bill writes to have a sort-of folksy charm, I imagine him speaking in the same way!

In regards to your question on surveys Bill: Surveys can be incredibly valuable if you understand your goals and ask the right questions. Make sure before you have a very clear idea of what kind of information and feedback you're trying to gather. What problem are you trying to solve? What questions are you trying to answer? Do you want general feedback on your customer service or specific feedback on individual products?

A couple of other guidelines that will help:

1. Keep it short: People hate taking surveys. Short and too the point means more people will complete it

2. Incentivize participation: A survey is considered overwhelmingly successful if 10% of respondents participate. To encourage participation, offer a reward or drawing or some other incentive. Make sure your respondents understand there's something in it for them

3. Use a survey tool: E-mail surveys are annoying to people, use an established tool (Survey Monkey is a popular choice) to make taking your survey as painless as possible

4. Cast a wide net: As I mentioned above, a 10% response rate is considered amazing. A large pool of respondents increases the chances that you'll get enough feedback to make decisions. If you have a small pool and get only 3 responses, you can't be confident that changes or decisions you make based on that information will be valid. The more data you have, the more confident you can be.

Hope that is helpful!

[Kev Williams]

Bill is simply writing as he would say it out loud. I do that, as do many others. Bill has just taken the 'art form' to a higher level!

When I was in Jr. high school we had to write a short story, just make something up from scratch- I don't exactly remember my story but I DO remember people in the story "talked", and they used words like "ain't" and bad English - "Joe don't have any banana's! - because, that's how my character's talked! I got a "D" because of using bad English and for using words like "ain't". Kinda soured me on English class!

(sorry for the hi-jack!)

[Gary Hair]

GARY -
No I did not take offense on your commenting about my apparently too casual writing style. Not sure when or why I got into the practice of writing that way? I will see if I can change this habit because easy readability is the key think. And no I do not use that style when writing to customers. Which as Dan might say brings up another good point. Customers or even friends who do not bother to tell us openly and honestly how they feel about things. Our businesses nor products for example. My question: do any of you use customer surveys to learn how your customers actually feel? I am thinking now of implementing one. Somehow anonymous enough where customers might openly speak their mind. Your thoughts on or experiences with surveys?
Okay Gary. How did I do? No quotes apostrophes or parentheses. But already finding I cannot live nor write without commas as you suggested. Can almost feel my 6th grade teacher whacking me with her ruler for omitting them from where they should be used. Seriously I will at least attempt to cut back on distracting punctuation marks and too casual writing. Thanks for bringing this to my attention.

Bill

I'm extremely happy that you didn't take my post as offensive or attacking you in any way. It's difficult to express, and read, emotions in writing since you don't have facial expressions, body language, and voice intonation to get your cues as to the intent. Just as you were not put out by my post, I wouldn't have been put out if you had replied with "that's the way I write and I'm not going to change." I can only comment on how I feel, I can't ask you to change if you don't want to.

I've never used surveys even though my wife is a data analyst that creates survey instruments for a living. I'd be curious to see what your results are and what changes you can make based on the responses. I have always been of the mind that most of the people who comment on a business transaction are not happy, the happy customers usually stay silent. The old adage is that a happy customer tells no one but an unhappy customer tells everyone... That may be a bit extreme but I believe it's more true than not.

[Jason Hilton]

Gary,

Your point is very valid. Unhappy customers are always the most vocal. Our goal should be to provide a customer experience so compelling that the customer becomes an advocate for your business. This is a major push forward from the traditional marketing expectations of simply increasing sales. A positive customer journey makes the customer invested personally in the success of a product or business. It's really fascinating stuff.

[Bill Stearns]

Hi All -
Gary commenting on my writing style sure sparked interest, uh? Ultimately, we are all here to help one another, right? and that's what Gary was trying to do. Jason - you're right, I've been writing like I "talk"; didn't think anything of it. Based upon your responses, think I'll continuing using punctuation where I feel it's needed, and writing in what Jason called "my folksy" manner. Me? if something is tiresome to read, I simply pass it by.
JASON: Thank for the advice on "surveys", I'll keep it all in mind. Think my biggest question might be: what more might my customers' companies be buying from me? (i.e. they will order a retirement plaque from me, engraved signs from someone else. Go figure?) Got' a kick out' a Richard asking - did I create a business plan at the start? (going on 8 years now.) A good reminder that business plans aren't just for "start ups", but important all 'long the way. BTW: Here is my story in a nutshell: I used to sell Gold Bond Trading Stamp Programs, years ago. (thus, my asking about promotions a few posts back.) Thinking many of you are too young to know what a "trading stamp" is, uh? No secret: they vanished from the scene with the advent of electronic point reward programs. Left me wondering what I might do for a livelihood! One day my son (an engineer) called to say he had bought a laser engraving machine. Told him I'd help him acquire sales. Ran 'round town to quickly realize there were engraving needs everywhere! Ended up buying the machine from him - no particular plan in mind other than survival - started Great Engravings. At 65, now, my "plan" isn't to grow bigger, just more profitable. (Oh, how I wish I was younger! I could much more easily grow this into a larger business than it is - investing in new 'n better equipment, etc. Don't seem to have enough stamina anymore. Finding it much tougher to simply reach a point where I'm not sweating bills that roll in. That's about it. Now ... back to work. (what'd you say we start a new thread regarding surveying our customers?)

Bill

[David Somers]

Bill,

Your last comment about not growing bigger, just more profitable, is pretty helpful. I think many of us were focused on getting you more business in various ways, profit through volume if you will, through customer retention, reaching out for more business, etc. But if I read you correctly you would rather not get busier, just more profitable with the time you are investing now? Is that a fair read on my part?

If so, and please keep in mind I am not experienced in this by any stretch of the imagination, after looking at your web site it seems like you have 2 basic choices for becoming more profitable. Either find less expensive sources of supplies to make what you are making now, reduce your overhead in otherwords, or change what your focus is to something more lucrative. If the work load of the award and consumer type products you are doing now isn't doing what you want, perhaps changing over to more industrial types of applications might be the ticket? I throw that out simply as a starting point of conversation though. I think folks here who are actually doing this for a living can give you wayyyyyyy more ideas than I can.

Dave