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Subject: Part 5a- Some Things Big Discounters Don’t Want To Admit

Author: Dennis S. Vogel

[ Next Thread | Previous Thread | Next Message | Previous Message ] Date Posted: 02:32:24 09/02/05 Fri In reply to: Anonymous 's message, "Help" on 15:31:23 08/01/05 Mon In their books, Jack Trout & Al Ries compared marketing to war & used that analogy to explain good marketing methods. They tended to concentrate on big businesses. So, when Trout & Ries wrote about the front or frontline of the battle being the minds of prospects, they didn't focus on bonding with prospects. What they wrote can be adapted for small businesses. Something small businesses can do more easily than their big competitors is bonding with customers. T & R revealed positioning is a battle for people's minds. What better way is there to "go down to the front" & find what's there than bonding with people? Studying Sociology & Psychology helps expand marketing knowledge. Sociology deals with people in "the aggregate." Social scientists predict, somewhat accurately, what a group of people, in general, will do. That's valid knowledge & is about all big businesses can count on. Learning about individuals, or even subgroups, would be too expensive (financially & in time) for big businesses. Small business owners, even with less money & less (staff) labor time available, can afford this more easily. In many cases, they can't afford to neglect this opportunity. This point seems to hard to grasp sometimes, so let’s think of it like this - Jim Bunk’s annual purchases from you might be .01% of your annual revenue. By investing time in learning about Jim, you might be able to increase his personal annual value to your business up to .012%. This would happen because you could use information he gives you to order things specifically for him & others like him. Since you’d be serving him very well, his “loyalty” to your business would increase. He’d buy more from you & buy more often. His referral value (number of customers you gain from him & their annual value) could easily be .09%. Jim’s annual purchases from a big retailer might be .000001% of its local store’s annual revenue. His annual value to the whole company would require a whole line of zeros between the decimal point & the percentage sign. By investing time in learning about Jim, the local discount store might be able to increase his personal annual value up to .0000012%. The big discounter would need hundreds of referrals from Jim to even “move the needle.” Besides that, the big discounter has executives, support staff, store managers & assistant managers, stockholders, etc. expecting to get money from it. Are there some referrals big discounters don’t want? Would they admit it? People tend to expect, as a minimum, what everybody else gets (as long as it’s positive), so if a big discounter’s employee spent 15 minutes helping Jim, then Jim might tell everybody he knows (Joe Gerard uses his example of a person’s circle of influence being 250 people) about the attention he got. Then about 200 people might go the local discount store & demand at least that much attention from the staff. If the staff complies, then other customers might be jealous & demand that level of service. Those disgruntled customers might not return to that store &/or might complain & upset the executives, stockholders & employees. Does this mean referrals are bad for small retailers? No. You probably specialize in a small number of product/service categories. Hundreds of people aren’t apt to want/need what you sell on the same day. But big discounters have such a high number of product lines, more people are apt to want/need some or many things they sell. If a person goes to more than one department in the discount store & expects a lot of attention from (skeleton crew of) employees in each department, s/he will definitely be disappointed. To some extent, big discounters can predict how many customers they’ll get & what will be bought (based on sales per day/calendar date in previous years & what they’re currently advertising), there are still variables in that. If the discounters had enough employees scheduled to handle the expected & potential demand, they’d have a payroll they couldn’t cope with. Besides that, all the while employees are working, there’s a possibility of injuries. More employees on duty can mean higher worker’s compensation claims & premiums. Encouraging people to demand the service they deserve could tip the scales for you. But what kind of service do they deserve, want, need &/or expect? You need to find out by “going down to the front.” Then you’ll know how to answer the questions above. When you have that information, you can also find which tactics &/or strategies other businesses in your category are using. The best tactic is probably something not be used or not used well by other businesses in your trade zone. The strategy makes the tactic effective. A simple analogy- An effective tennis tactic is to hit the ball to an area of the court the opponent isn’t occupying (hit it away from the opponent). The strategy is the way to get the ball to the furthest point (but in bounds) from the opponent. Finding & using the competitor’s weakness (especially if it’s hard to change) is the strategy. Example- Avis exploited Hertz’s long lines. What could Hertz do? The space allotted to it in airports was fixed. There was a limit on how many employees could be in that small area. But still, Hertz had to move customers through the process more quickly or it’d lose some of them. Otherwise, even if people had to search for Avis’s service desks, they’d do it to get to their destinations sooner. Hertz concentrated on keeping its most frequent customers by moving them through the process quickly. It already had their preferences on file & could have the same or a similar vehicle ready for them. These customers wouldn’t be required to wait in line just to tell Hertz they wanted the same thing as the times before. So, now they can show their identification then go to the vehicle already reserved for them. So, you’re tasks now are: 1- figure out which of your weaknesses competitors are exploiting (even if it’s unintentionally); 2- which of the competitors’ weaknesses you can use against them’ 3- Return to the forum to find how to use these issues & concepts. Thank you for using this forum. Dennis S. Vogel thrivingbusiness@email.com Using better methods means picking & using the right tactics & strategies. You’ll find guidance you need on these web sites. http://web1.lakefield.net/~thrivingbusiness/ http://www.voy.com/31049/ [ Next Thread | Previous Thread | Next Message | Previous Message ]

Replies:

Subject	Author	Date
Part 5b- Getting Prospects to Try What You Offer	Dennis S. Vogel	00:01:20 09/06/05 Tue