You can differentiate yourself from competitors and avoid becoming a "distributor dinosaur" with customer-service guarantees.
Chris Robbin of ABC Electrical Contractors has two stops to make today at electrical distributorships. He needs to pick up material at both distributors that he had requested yesterday to be ready first thing in the morning.
At his first stop, Best Electrical Distributor, two counter salespeople are immersed in a conversation about last night's Bulls-Knicks game. No other customers are at the counter. Chris looks right at them. But he gets no eye contact for what seems like an eternity to him.
He can feel acid building in his stomach. He pops a Tums and waits. He thinks of his customer waiting for him at the job-site. Finally, one of the counter salespeople grunts, "What do you want?" Chris explains that he wants to pick up his order. He adds that he telephoned yesterday about this material. The counter salesperson casually looks around the counter and disdainfully responds that he doesn't see Chris' order. At Chris' irritated request, the salesperson finally gets around to locating his order. Chris has been at Best Electrical Distributor for 27 minutes.
It's a different story when Chris walks into Your Electrical Distributor. The counter area is bustling with customers, but Chris is still immediately greeted at the counter.
"How can I help you today, Chris?" Sam, the counter manager asks with a big smile. Chris tells him that he wants to pick up his will-call order. Sam looks at the will-call staging area and says, "I'm sorry. Your order is not ready as we promised. I'll run back to the warehouse and bring it right out." Sam returns shortly with Chris' order and says, "We're sorry that we did not meet your service expectations. Here's a $25 'Service Guarantee Certificate' because we didn't have your order ready. We hope to continue to earn your business in the future by doing it right 100% of the time. That's our service commitment, Chris." Chris has been at Your Electrical Distributor for 8 minutes.
Where do you think Chris Robbin will take his future business? He will go to the electrical distributor that makes a service commitment and stands by it. Best Electrical Distributor not only lost a customer, but will soon end up in the ever-more-crowded corporate junkyard of electrical distributors.
A service guarantee is a commitment to your customers to deliver a specific service to their complete satisfaction. Every time you fail to deliver on a service guarantee, you monetarily reimburse your customers for your service shortfall. Here are some tips on how you can implement customer-service guarantees:
Find out which services customers really want. If you intend to outserve your competitors, create service performance that satisfies your customers. The best way to find out what customers want is to employ the following three listening tools: focus groups, mail surveys and customer advisory councils (See "Voice of the Customer," EW-December 1997, p. 57). Be specific with what you offer. You must promise something specific, such as order accuracy, timeliness of delivery, fill-rate, will-calls, returned goods or instant credit. Companies that bluntly state "100% satisfaction guaranteed,"and tie that statement to a pay-out is promising something so general it cannot be delivered.
Don't go wild and over-promise. It's important to offer service guarantees that are within your capacity to deliver. Offering a service guarantee that is beyond your capability to fulfill creates a quality problem. If you can't consistently meet your service guarantee, it will advertise to your customers that you have a service weakness. If you can't quickly fix the bleeding and stop the cash from being carted out the door in pay-outs, you will have to pull the service guarantee off your shelves. Your competition then will have a field day exploiting this "guaranteed/not guaranteed" service weakness. Only implement customer-service guarantees that you can meet every time.
One electrical distributor recognized that order accuracy was of primary concern to his customer base. However, he surmised that installing a service guarantee would be a mistake because he felt his error rate was too high. He had no measurement system in place, so he installed a tracking system. Implementing a service guarantee at this juncture would have been a strategic blunder. He first combined the tracking system with a warehouse incentive plan to provide individual and team rewards for high order accuracy. With a tracking system in place, he now could define root causes of most of the errors and provide solutions. Within months, the order accuracy rate for this electrical distributor greatly improved. He then could implement a guarantee that his competition could not match.
Make sure your guarantees are measurable. For example, if order accuracy is critically important to your customers, the guarantee might read: "All shipped orders will have both the items and the quantity 100% correct." No gray area exists here. Either the customer receives the right product in the right quantity, or he does not.
If it's fill-rate your customers want, pick out your fastest-selling 100, 200 or 300 products. Then create a special line card listing every one of these products. This way, your customers know exactly which products you are guaranteeing and which products they can expect to be in stock at each of your locations.
Commit to a meaningful pay-out. A $25 service guarantee is meaningful enough to motivate your company to improve your service shortfalls. Putting your profitability at risk will give you a solid incentive to improve.
Once you have determined a pay-out amount, develop a multi-part service guarantee form for customer receipt and internal tracking and control. You need to be able to track guarantees so you can analyze them and eliminate future service shortfalls. You also need to have accounting control so your customers can redeem their certificates.
Educate your employees about these guarantees. Your people must cheerfully and proactively give out service-guarantee pay-outs when the service level is not what your customers expect. This is a critical step, because your aim is to provide hassle-free service that will delight your customers. Don't ever burden your customers with having to ask for a guarantee pay-out. Recognize and even reward employees who give them out.
Promote the program. You can now heavily market these service guarantees to your customers as the key reason why they should do business with your company. The marketing value of implementing service guarantees is tremendous because your customers will see your electrical distributorship as a highly ethical company that holds itself accountable. That will build trusting, loyal and everlasting relationships.
Satisfaction guarantees may seem overwhelming at first. Simply begin by carefully selecting a few pilot areas in which to implement guarantees. Guarantees force you to strive for service perfection as you continually debug internal processes. Momentum will build as you add to your guarantee program.
Don't think it's crazy to pay customers for your service failings. You will go out of business if you don't guarantee customer satisfaction. Very few customers will take advantage of you. They don't want the money; they want an electrical distributor who can deliver on the services promised by doing things right the first time, every time.
Customer service guarantees launch a chain reaction that engenders truly breakthrough service for your customers. And if you aren't willing to stand behind this mission, you will soon be a distributor dinosaur.
You and I both, in our experiences as customers, have encountered salespeople who really didn't seem to have a clue. You know the type. The first sign is usually their personal appearance. By 10 a.m. they look as if they've already put in a long, hard day. Sometimes they even have that "grunge" look that's a plus for rock stars, but doesn't work in today's competitive business marketplace.
Now I know it's neither fair nor always accurate to judge a book by its cover. I shouldn't assume that a disheveled personal appearance is a sign of inner disorder; but based on my experience, when it comes to salespeople, it's more often the rule than the exception. This inner disorder usually shows up pretty quickly during a sales call as a lack of organization.
Recently, in need of a particular professional service, I called several firms and requested that each meet with me to discuss my needs and their capabilities. With only one exception, the representatives who visited my office were knowledgeable, enthusiastic and highly organized professionals. Some were better salespeople than others, but all were reasonably competent representatives of their firms.
The one exception, however, was a glaring one. This young man, perhaps in his late twenties, was dressed in faded jeans and a wrinkled jacket that looked as if it had been salvaged from the throwaway bin at the local thrift shop. His shoes, a pair of well-worn penny loafers, probably hadn't seen polish since the day he bought them. I admit I liked his tie, even though the knot rested about three inches below an open, visibly frayed collar. I'll leave the rest to your imagination.
Yet, despite his appearance, I was anxious to hear what he had to say. Several people whom I respect had told me good things about his company's services, and I wasn't going to ignore their advice based solely on my first impression of just one employee.
Anxious to discuss my needs, I cut off the small talk after only a minute or so and asked him a specific question about his firm's capabilities. His reaction to my question-a completely blank stare followed almost immediately by a look of sheer panic-told me that my first impression had been right on the mark.
When I repeated my question, he sought answers (and refuge) in his bulging briefcase. Sadly, he found neither. As he sorted through its contents, it became apparent that either he had no idea what he was looking for or what he was looking for was not there. Finally-and this process took several minutes-he gave up his search and told me that he would get the answer to my question as soon as he returned to his office.
Not wanting to subject either of us to another round of embarrassment-and believe me, I think I was as embarrassed as he-I asked no more questions, glanced only briefly at the literature he managed to produce and thanked him for his "most instructive visit." He actually seemed relieved to get up and leave. Needless to say, I never heard from him again.
Admittedly, this sales rep is by no means typical of those you and I regularly encounter. If he were, American business would be in very serious trouble. As it is, I still don't understand why any reputable company would permit such an obviously untrained salesperson to represent it in a competitive marketplace. (Perhaps he was a relative of the owner.)
The principal lesson we can all take from this experience relates to perhaps the most basic of selling principles: Sell yourself, sell your company, sell your products and services-and do it in that order! It's a principle so basic that I almost hesitate to bring it up. But then I see how often it is violated by both inexperienced and veteran salespeople, and I realize that sometimes we all have to be reminded of even the most basic aspects of our work.
Why sell yourself first? The answer is simple and stems from a very real fact of business life. You and I and your customers don't want to do business with people if we dislike them or feel uncomfortable in their presence. Notice I didn't say that customers must like the salespeople they buy from or that they have to be personal or even professional friends to have mutually productive business relationships. Not at all. But if a customer truly dislikes you, for whatever reason, he won't think very highly of your company and he won't buy from you.
Are there exceptions to the rule? Certainly. For example, a customer, despite his personal feelings, might be compelled to buy from a particular supplier for any number of reasons. Maybe his boss has given him no choice and told him always to buy from the supplier. Perhaps the supplier provides a product or service that the customer needs and is unavailable elsewhere at a competitive price. Perhaps the owners of the two companies share a personal friendship that has led to a long-term business relationship.
Any salesperson, however, who bases his business hopes on such reasons is ultimately in for a big surprise. For if there is one constant in business, it's change. New technology can make a product obsolete almost overnight. New competitors, large or small, can enter a market and quickly alter its dynamics. Personal and business friendships can sour as a result of a careless comment or a few hours on the golf course. In other words, people and markets constantly change. Once a customer is no longer forced to buy from a supplier he dislikes, he will cease doing so. So, then, how do you sell yourself and ensure strong customer relationships?
Create a positive first impression. First impressions might not always be accurate, but they tend to last until strong and repeated contrary evidence proves them incorrect. Your first call on any account is, therefore, critical and can even determine whether the customer will be willing to permit a second call.
Obviously, your personal appearance has a major influence on the impression you make. Most customers don't expect you to wear expensive tailored suits (in fact, some might even resent it), but you should present a neat, well-groomed business-like appearance in keeping with the standards of business dress in your locality. Probably the best guideline I can give you is to use good common sense and avoid any form of dress that might be considered extreme or trendy.
If you believe I am suggesting that you have to compromise and sacrifice some of your personal desires in order to succeed in business, you're right. But what aspect of life involving relationships with others doesn't involve compromise of some sort? None that I can think of. To put it bluntly, if you want to create a good impression on your customers, you'd better consider your appearance; otherwise, you can expect to lose a lot of business.
Although personal appearance is a major influence on your first impression, it is still just one influence. How you act and what you say can either reinforce a positive impression or create a negative one. My best advice, especially on a first call, is to keep it friendly, yet professional. If you discover that you and the prospect share a common interest, there's nothing wrong with bringing it into the conversation. Just don't dwell on it during the first call. There are much more important issues to address.
Remember your primary purpose: To identify the prospect's business objectives, problems and needs and to introduce him to your company and its products. As you do so, you want to develop credibility with the prospect so he will come to see you and your company as the source of solutions to his business problems. This can't happen during a bull session about last weekend's football game.
Show integrity. Honesty is important, but so is the perception of honesty. Don't bluff. If you are asked a question and you don't know the answer, admit it. Promise to get the answer, then keep that promise as soon as possible. If you try to appease the customer and save face by bluffing, the results can be fatal. When the customer ultimately discovers the truth, he just might assume that you knowingly lied, an unpardonable offense in business relationships. Avoid this problem by being honest in everything you do, thereby showing your accounts only the best of motives. You will earn the respect-and the business-of your customers.
Avoid flattery-especially false flattery. When someone flatters you, especially if you believe that he wants something from you, you usually feel manipulated. You feel as if you are transparent and that he thinks he is saying only what you want to hear.
Flattery can create real resentment on the part of the customer and cause him to believe that he is being "set up." Remember, false flattery is usually pretty obvious; but so is an honest, sincere interest in the customer and his problems. Develop a real interest in your customers and their business and display that interest.
Avoid arguments. Customers aren't always as technically competent as those calling on them, or they may harbor misconceptions or prejudices based on ignorance or resistance to change. Don't succumb to the tendency to argue with the customer in order to prove that you are right! Arguments are almost always counterproductive and rarely lead to sales or stronger interpersonal relationships. You are there to persuade, not to win arguments.
Exhibit empathy for the customer. Be prepared to be patient and listen. Encourage the customer to talk freely. Find out why he feels as he does and show understanding for his point of view. You don't have to agree with the customer when he is wrong or uninformed, but neither should you go out of your way to embarrass him on account of his error. The customer is not always right, but he's never wrong! Give him an escape hatch, a reason for being uninformed or misinformed. Then proceed to educate him. For example: "I can understand why you feel that way. I find it hard to keep up with technology in my own industry. But, here's some new information that might change your mind..." (Then explain the matter in terms he can understand.)
Don't parade your knowledge. It's far better to use your technical knowledge and the information you have about the customer-her business, organization, problems and needs-as a basis for the questions you ask. Don't shoot from the hip. Prepare your questions in advance. If asked as leading questions, they can keep the customer talking and they will pave the way for logical references to your capability to service that customer. If you do this well, there will be plenty of opportunity to show her that you have the products and the necessary technical expertise to solve her problems. As one successful salesperson said, "Don't take the credit, take the order!"
Plan your calls-every one of them. One of the most disconcerting experiences a salesperson can have is to call on a customer and be confronted with a major, unforeseen problem to which he or she has no ready solution. You can never predict every problem you might encounter, but with good, solid pre-call planning you can certainly anticipate the most likely.
Before each call, ask and answer the following questions:
What are your long-range objectives with the account? In other words, what is the nature and extent of the business relationship you hope to develop with this account over the long term? Keep these objectives in mind throughout the call so you won't be distracted by seemingly attractive yet counterproductive short-term gains that might actually jeopardize your (and your company's) objectives.
What are your immediate goals? Every call should have a goal, something concrete you plan to achieve before its conclusion-otherwise, why bother? Too many salespeople call on prospects and customers without any real idea of what they hope to accomplish. Simply wanting to "make a sale" is not good enough. Is the customer expecting a formal presentation or is he interested in taking part in a dialogue about his needs and your products? What specific information must you obtain to understand the account and its people better? What are their complete product and service needs? From whom are they now buying? Why? Are they experiencing any problems with their current suppliers? Can you get a share of their business? What about a second source? Do they need products that their current supplier doesn't carry? The answers to these and similar questions will, in large part, determine how you approach the account, what you can hope to achieve and when you can achieve it.
Whom will you call on? Have you qualified the people at the account? Who is the ultimate authority, the individual with both final approval and veto authority? Who are the key buying influences? Technical influences? Business and financial influences? Users or operational people? Can you obtain access to key people? How? Can you arrange a meeting involving all or most of the account's key people?
How should you time your call? Timing is important since it can determine how much time you and the customer can allot to the call. The time frame, in turn, will dictate how much you can accomplish. Whenever possible, base the timing of the visit on the customer's convenience, not yours. Explain how much time you will need in advance. Be flexible. Don't put yourself in a position where another commitment forces you to leave a customer who wants more of your time. What is this customer's busiest time? A half-hour without interruptions will be more productive than an hour with the telephone constantly ringing. What day of the week and time of the day does he prefer? (If you don't know, ask!) When is he likely to have sufficient time for a meaningful visit? What about other key personnel in the customer's organization?
What resources will you require? Organize your product literature and other material so it is readily accessible when you need it. Don't inundate the customer with paper, much of which he will probably never read. Highlight pertinent facts and focus on the information that is of particular interest to the customer.
If you suspect that you might require special equipment, product samples or other materials, have it available. A product in the customer's hands is worth much more than a piece of literature. What material or information is needed to achieve your goals for the visit? Who will take what? Don't assume that someone will have a particular item or piece of information. Ensure that all who call on the customer know what they are responsible for, and double-check before the visit. Are you ready for any reasonable contingency? This not only applies to the information you take with you, but also to any special equipment needs you think you might encounter. Don't neglect safety considerations, particularly if you will visit a customer's plant or work site. Do they provide protective equipment or should you bring your own? Not all companies have the same high level of safety awareness. The best rule is to protect yourself!
What objections are you likely to encounter? Based on the customer's interests, his past experiences and his primary buying motives, you can usually predict the nature of the objections you will encounter during the selling situation. Take some time prior to the call to develop sound and thorough answers to these objections, so you will be able to deal with them effectively when they arise. When considering objections, view the selling situation from the customer's point of view. What specific applications do they have for your products and services? What unique problems derive from these applications? What problems have they experienced in the recent past? Such problems will likely be uppermost in their minds. Discuss potential objections in advance with colleagues at your company to be certain you have not overlooked any. Then decide how you will handle them and who, specifically, will address each if they arise.
What subjects should you avoid? What subjects are taboo and shouldn't be discussed with the customer? Proprietary information? Prospect of future products? Current problems your company is having? Your relationships with his competitors? If the customer brings one up, how will you handle it? What will you say? Are there any personal considerations about the people you will meet? Are there things everyone must know? The goal here is to avoid surprises and the potential of embarrassment on both sides.
When you walk in the door, the customer doesn't see you, he sees your company. To him, you are not only a representative of your company, you are your company. Even if the call results in no immediate commitment for an order, you want the customer to respect you, to feel comfortable in your presence and to want to see you again. Sell yourself and leave a favorable impression of your company as an organization with which it is both pleasant and rewarding to do business.