Reducing Customer Burden for Higher Sales
Every Company Puts Obstacles in Their Customers’ Paths.
Do You Know Yours?
“Burden” is EVERYTHING a customer has to do to find, buy and then implement your product or service. In some businesses this involves many steps. In the most successful businesses it is well streamlined from the customer’s perspective. Every call needed, meeting needed, comparison of competitors’ products and pricing can be examined to make the entire process easier for customers and to improve closure rates.
The “customer experience” is one useful perspective for looking at and improving your business and burden, but it is only a part of the whole story because this is only the part that interfaces with you. In fact there are many other things that a customer needs to do that do not interface with your company at all – internally. These things are all “burden” also. These may also represent opportunities for improved sales and profits.
Companies with lower burden on customers do much better long term. Many even do better with much higher prices because it is easier for the customer and the extra cost is worth the internal savings. Ever call Dell to buy a PC? They will seamlessly pass you from department to department to conclude the sale – one expert to consult and configure the ideal system, another to finance it, etc. They make it EASY to spend money with them and get exactly what you want quickly, all the while capturing two levels of margin. This is also easier than a retail experience with no travel and a custom built system to boot. Many companies would have someone call back later for the other part of the transaction or, even worse, expect you to call them back and write down THEIRtransaction number for their benefit. Personally I think companies that ask you to track their data for them are making a mistake. Data tracking should always be accomplished using the customer name or phone number – not be another burden on the customer.
If you are not in a price-sensitive market it will likely pay to see what services or products you can provide the customer that reduce their burden and increase your profits too. For example, many real estate offices now do mortgage financing applications right there. This is easier for the customer and provides a profit center that can greatly increase the revenue of the transaction to the real estate broker too! The same goes for automobile financing at car dealers. You save the customer a step and make another sale without additional marketing costs.
Let’s look at a list of possible sources for burden:
- Transaction Friction – Everything that needs to be done to execute the transaction, including review of the contract, lawyers, policies, guarantees, liabilities, delivery, payment and much more. How many meetings and calls need to happen to close a transaction?
- Implementation – How many more calls, meetings or interchanges are needed to implement the product/service? Do lower-level employees have to get together for planning? With enterprise software and similar tools, this can be a three- to six-month process or more. This internal process can even cost many times the amount of the product or have risks that could. Is there another way? This is one way that Software as a service and/or ASPs are gaining more traction. Easier and quicker implementation almost always means more sales. The outsourcing trend for IT is also taking advantage of this “easier for us” phenomenon.
- Contacting You – Customer service and/or salespeople can get in the way because of disparate goals and compensation incentive programs. They can cause confusion because the customer does not know exactly who does what. This can also cause the customer unneeded delays and costs.
- Related Needs – Find related products and services needed by customers to implement your product or service. Do they need to get another PC, put in wiring, hire another employee to run something or develop ways to oversee their purchase? Could you offer any of these options at a profit to you and eliminate a search and/or entire evaluation process for some customers?
- Measuring and Reporting Results – What about measuring the effectiveness or ROI of your product once installed? Could you provide this at a fraction of the cost to them because of your economy of scale in repeating this for many of your customers? What opportunities are created for the customer now that they have your product or service? Can they enter new markets or increase their own market share? These services cement relationships by increasing switch costs.
- Customer Protections – Do you offer a simple guarantee with some price protection so people don’t feel they need to get bids from a dozen different vendors? Consumer electronics stores have done well with this offer and hardly ever get called on this because they know when price drops are going to happen and don’t push those products during that time. Few people follow up on these guarantees; as with rebates, there is significant fallout.
- The Customer’s Need for Expertise – Is there something one of your employees (an expert at this) can do to help them implement, maybe even three to five times faster than the customer doing it for themselves for the first time? This is not just a profit opportunity but also an opportunity to over-deliver and bond with that customer by helping to make the buyer a hero for choosing you. Many companies miss this opportunity when the “deal is closed”, and the customers are then on their own to implement. Build in some paid support for customers where there is leverage. Repeat business will also go up with this added support.
Many category killer big-box stores have been so successful simply because they have become a one-stop shop, especially with a perceived best-pricing strategy. This is all about reduced burden for the customer too. Home Depot, Staples, Wal-Mart, PetSmart and others have such a huge selection that they push others out of the market quickly – even when niche competitors sometimes have superior solutions, but not the convenience of a single vendor.
The Three Constituencies that CEOs Serve
As CEOs we need to focus on the three groups of people we must keep happy in some balance: customers, employees and shareholders/owners. It is often easy to get caught up with a priority scheme that favors one group far too much over the others.
Burden is all about keeping the customers happy, often by your employees taking more of the burden for the benefit of the customer. Cultures can vary, and some make this hard to do. This must be weeded out.
Burdens can be invisible to you and drive customers away in droves. The only way to find the burdens is to acknowledge that they must exist out there somewhere and to purposely go looking for them with some time and effort. Find these leaks in your sales and marketing funnel, and you will increase business without much difference in costs. Often only a process change is needed.
The long-term leverage of this effort can be huge. Assign someone to identify the top five to 10 burdens of your customers and potential customers as well. Then set about skewering them one by one in a conscious plan to lower or eliminate each, or even turn some into profit centers.