This weekend a colleague asked a myself and a few fellow business owners if our customers were asking for discounts after work was complete. His customers were telling him they could pay him immediately if he took another 20% off the bill or he would need to wait for payment. This is for work he already had done!! With the recession he added that his closure rates on bids went from 50% to under 10% and he was desperate. He is in a competitive, commodity market, but something isn’t right here. He is taking the 20% off the bills and discounting, but his business is not doing well. You could see the worry on his face and I am sure the customers are as well.

I suggest if customers are asking for discounts that you change the scope and give options. Give three different scopes of work with three different price points, but then hold firm on the work being done. You must do this to stay healthy and your customers should respect this. People love options and the customer will understand that with options there are varying levels of product.

There are typically three things to look at with any project scope; price, timeframe, and quality. Keep to these three sides of the triangle when bidding and discussing jobs with customers.

Before finding yourself in an unprofitable situation, the best businesses find ways to differentiate themselves and offer unique and special services and products. Customers will be happy and your business will remain healthy.

Last month Allegra Networks, a 400 plus unit franchisor, published an article in their quarterly franchise magazine, Connections, sharing lessons learned from around the network. The article explains how Eileen Rogers and Ted Raymond, owners of the Allegra franchise in Scottsdale, AZ, focused the business on multi-channel marketing, including variable data printing and personalized URLS, while making the shift to a marketing services provider. In addition, Eileen and Ted explain how customer feedback became part of their strategy.
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NAPL releases Field Case Book, a new initiative to share best practices and innovations with printers.  In NAPL’s first  field book case study, a printer is highlighted for a creative customer retention strategy saving $130,000 in business within the first month of the strategy. 

Click here for complete case:  http://www.fieldcasebook.org/

Yesterday I was speaking with a good friend who was heading home for an appointment with his oil burner maintenance company.    Since I needed some maintenance I asked how he liked the business.  He said he “HAD” to use them because the business was a client.  He continued saying that he just wished he could go elsewhere and  explained all the problems he had over the years.  He felt hostage.  I call  this “Fake Loyalty”.  It is too bad this oil burner company doesn’t get it right and give this customer a reason to refer them.  I am just glad this guy told me to stay away.  Does anyone know a good oil burner guy?

Ask your customers the question “How likely are you to recommend us to family and friends?” Some of your customers may feel like hostages for now.  Why not make it right.

Leveraging customer testimonials is a great way to improve your marketing approach. Most businesses do not do this effectively or don’t make it part of their overall marketing strategy. It is very easy to collect testimonials.

The easiest way to get testimonials is through a paper or e-surveying process either done annually to all customers or individually after jobs are completed. In the survey add the question “Is there anything you think we do particularly well or anyone you want to recognize?” You will quickly get dozens of testimonials to use. All you need to do is immediately send back the comments to the customer asking their permission to use in marketing.

99% of the time they will say “sure” and now you have your dozens of testimonials. Another way is to add an approval box after the question asking their permission to use any comments in your marketing efforts. Any checked off are fair game to use and you have documentation that they gave the OK to use it. Good luck!

Jamestown, RI, March 23, 2009 – As part of its commitment to help printers develop profitable, highly responsive, customer-focused organizations, Survey Advantage ( www.surveyadvantage.com), a customer research and loyalty firm, has released a new report for all CustomerPulse™ customers. The report tracks customer loyalty and a referral rating continuously, and benchmarks real-time with other printers.

“It is great that the different printing industry MIS systems are incorporating CustomerPulse™ into their customer management processes. This enables printers to select jobs and contacts to send a survey in just five minutes a week. With low administration time the printer can now get the same customer intelligence the hospitality industry has been collecting for years. Now any size printer can obtain feedback after jobs are shipped helping them gauge loyalty, promote referral programs, and drive improvements.” said Michael Casey, president of Survey Advantage.

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In January 2009, 205 independent quick printers shared their thoughts on the question “Where do you think the top growth opportunities are in 2009?” Digital printing is on the minds of 82% of quick printers. The ability to make short runs quickly, managing staffing levels, and training time are key drivers of this investment. After that quick printers see mailing services (56%) and large format (28%) as the next most important to growing their business. Marketing services, web design, promotion products were all in the low 20′s or teens in the percentage seeing these areas as growth areas.

It is amazing how many quick printer customers still don’t view their printer as a mailing house or someone who can do large format. As an example, in a recent print buyer study we asked the awareness question for these services. We surveyed the customer base of a quick printer asking thier customers about awareness of each product and service. Only 25% of their customers were aware they offered bulk mail and 70% large format. The interesting thing was that many customers stressed their interest in learning more.

You can’t assume that customers will remember you just by mailing a few flyers and mentioning it a few times. Get creative on your messaging. Becoming a marketing service provider starts under your roof. Launch that new service this year and measure awareness as you go. A good goal to shot for is over 90% awareness.

The difference between customers “Likely” to recommend and those “Very Likely” to recommend is much wider than you think. Let’s look at how a conversation could go between a prospective print buyer who is asking one of your customers for help choosing a printer.

As an owner and sales person I would feel just great with my customer’s performance! That performance is a direct result of your performance. The quality work and service you provide makes it easy for them to feel confident in you helping their friend.

As an owner or someone is sales I wouldn’t be too thrilled with my customer’s enthusiasm here. The prospect is probably thinking he may consider ABC Printer, but it definitely isn’t a homerun and he probably should just keep asking other friends.

ABC Printers is not flattered to say the least! Now it can get really ugly from here. No one has customers feeling the way this next person feels. Only kidding, we all make mistakes.

Ugh! This is what brings a business to the brink. We don’t need to many of these characters running around spreading doom and gloom. What was that commercial “Don’t let this happen to you.”

Now let’s get back on the bright side of life.

Keep your employees focused on “WOWing” customers and keep all employees accountable for driving the customers to jump on the chance to refer you. Give them the opportunity to brag about their great decision to work with you. If someone is “Likely” to recommend you, find out what it will take to get to “Very Likely”.

It is amazing how many customers will give you a false sense of security by saying “Likely”. Some customers will say “I never give anyone the best ratings.” I totally disagree with this and any time you probe and dig deeper you will find that they do recommend other suppliers who are “WOWing” them.

Your “Very Likely” customers are most likely to take full advantage of a referral program, drive prospects through your doors so you don’t need to spend big advertising and marketing dollars, and they will help you stay profitable. Creating more “Very Likely” customers will maintain that stability in your business. Rally and promote to your team to focus on the customer no matter where they are in the organization. Everyone is in customer service and their goal should be to delight customers.

Focus on keeping a high percentage of your customers in the “Very Likely” to recommend bucket.

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A few years back a great book was published, The Ultimate Question by Fred Reichheld. He explains how several well known leaders in their industries leverage customer loyalty to drive profitability. It makes so much sense. If customers love your product and feel unique and special, they will recommend you.

Think about your marketing budget. What if you could get rid of the budget because prospects keep knocking on your doors? Enterprise Rent-a-car™ is praised in their industry for profitability and embracing the concept of customer loyalty. It is no surprise they have become the #1 rental business in the world.  Their advertising budget is a fraction of their competitors’.

What does this have to do with the printing industry? The best run printers have lower marketing budgets and leverage referral programs to keep customer’s promoting. This doesn’t happen overnight, but is part of their long term strategy.   ABC Printers tracks performance, reads customer comments daily, sets up teams to correct problems, engages the customer with this first hand feedback, sets up referral programs, and promotes customer loyalty.   They know when loyalty is dropping, and more importantly they address the issues immediately.  The operation remains customer focused and it pays off.  

We changed the name of the real printer to ABC Printers to protect identify.

How do you know if your customers are promoting you? The best way is measuring sources of incoming business. Recently one printer measured that 17% of their customers came from referrals while another was over 40%. What a difference. What a great way to save marketing dollars by having prospects knocking on your door. It is not surprising that the printer with 40% is growing during the recession while the 17% printer is hanging on.

How do you measure the customer referral factor in your business? There are two ways. First, any good CRM (Customer Relationship Management) system has fields to flag the source of new customers. Measure both internal referrals within your larger shared accounts and external referrals or new business relationships. Second, printers should ask after orders are delivered if the customer will recommend you to colleagues and friends. Do this on a continual basis, but respect your high volume customers. Surveying once a month is acceptable if the survey is short and done professionally. Only the highest ratings should be considered promoters of your business. Based on our print buyer surveying the average printer receives an 82%. This means that 82% of their customers are very likely to recommend. The best printers are above 90% and the lower tier is just north of 70%. The fascinating thing about the concept of creating raving fans or delighted customers is that major corporations such as Enterprise Rent-a-car, Southwest Airlines, and Intuit continue to grow profitably by viewing the long term value of a customer and measuring their referral scores.

In the printing industry we offer printers a program, CustomerPulse, which calculates the industry referral index on a monthly basis.  Frankly the bar is higher for the printing industry than just about any industry out there.  The ability to move to another printer is easy in many instances and most print buyers already buy from multiple printers.  Also, the Business to Business dynamic needs to be taken into account.

Be truthful with yourself when measuring customer loyalty or tendency for customers to refer you.  One printer shared that their score was over 90%, but it was based on 50 surveys a month out of the 4,000 individual businesses buying from them monthly.

Start measuring referral sources and measure your customer loyalty and referral index on a continual basis.  It will help your long term profitability.