miércoles, 24 de febrero de 2010

What is better: benefits or discounts?

Both are powerful weapons that will increase your sales, but only one will achieve a sustained growth for your business. Discover the benefits of each strategy and which will work best for you.


How do I get my clients to buy the product and return for more?

This is the question that many executives, entrepreneurs and professionals ask all the time.
Without a doubt, benefits and discounts are essential pieces of the business professional’s toolbox. A good deal can be a tempt a consumer to make an impulse purchase for things they do not need.
Of course, clients love discounts and take advantage of them whenever possible. At the same time, discounts are also beneficial to business results for their immediacy, simplicity and easy implementation. They also help to generate peak demand, move inventory, attract new customers, and even help wage battle against direct competitors, but discounts are not efficient solutions or strategies to retain customers. Here's why:


1. Discounts are by definition are fleeting solutions. The sale price typically falls below the normal range price and becomes a non-sustainable sacrifice. However, if an offer is well designed —in absolute terms— that sacrifice is more than offset by the increase in volume. Upon returning to its price, the product should return to its normal volume, or depending on the product, can undergo a temporary downturn. Discounts achieve extraordinary spikes in demand and will generate a momentary increase in sales. If you need an investment to flow rapidly, to settle a debt, or need to clear inventory, there's no better tool than a discount.


But if what you’re looking for is sustained sales growth, what will you do when the discount peak falls?


2. Discounts do not result in added value for you, your products or your customers. When a discount is able to attract people to test your product, you can assume that the discount itself is the main incentive for the purchase. So, if the discount is not accompanied by another stimulus to help repeat the purchase, the customer will not return.


3. Discounts are easily replicated or matched by competitors. There is nothing easier than to lower prices. Beyond the cost of spending and some collateral, just a couple of ads, if required, and a simple re-labeling is all you need.

However, if competitors match the discount, what more can be done to motivate customers then?


4. Discounts misinform consumers. A repeated discount creates two possible customer perceptions that could be harmful to your business:
a. As in the case of in a price war, the discounted price is the value of the product. Customers are no longer willing to pay the list price for the product and it will suffer a decline in its actual market price.
b. Even if customers think the product is worth the price, they know that if they wait a bit longer, they can get the product a little cheaper. The product will suffer a drop in sales regularly during your discount season. If either of these situations happens, what can be done to improve margins and increase sales or to boost sales during the periods without discount?


The best solution


Just like with discounts, consumers love benefits. They enjoy the recognition of being served with distinction, being praised with a gift or receiving courtesy without paying for the extra attention that can lead them to buy products and services they probably do not need or could replace with simpler options.


The big difference between the discounts and benefits is, of course, their duration, as well as the level at which they are tested by customers.


In terms of duration, benefits take time to take effect. They take much effort to design and plan and require the commitment of several areas of the organization for proper implementation.


However, the investment is more than over-compensated by the continuity and long-term value of their results. A customer who finds value in a product, beyond its intrinsic value or price, is a customer who will buy again and chose the product above other competitors.


Benefits, unlike discounts, create a link between the product and the customer and provide added value to any unbeatable low price. They are also difficult to duplicate by competitors. Discounts are definitely great tools that generate immediate results at an attractive low cost and ease of implementation. For their part, benefits are more complex in structure and require greater investment to achieve. However, benefits sustain long-term viability and promote the continued growth of a business.


The next time you have to develop a strategy to increase demand for products, ask yourself: Do I look for an immediate or a long-term solution? If immediacy is what you seek, use discounts and be wary of the implications that they bring along. If long-term investment is what you’re looking for, benefits that will strengthen customer loyalty and ensure sustained growth for your sales and business are your answer.

miércoles, 17 de febrero de 2010

Do we all deserve loyalty?

From an airline company, to an architect, to a factory or a taxi driver, all industries, businesses and professional offices can develop a good loyalty strategy.

Loyalty is a theme that is complex and full of different views and opinions. But the question that must be asked is whether it is relevant to us all.

In a conceptual manner, one can ask: Are all industries susceptible to loyalty strategies? Or, more pragmatically: Can my business, profession or trade benefit from a loyalty initiative?

The indisputable answer to both questions is, YES! From an airline or an architect, to a factory or a seamstress, all industries, businesses, professional activities and professions can benefit from a good loyalty program.

Let´s test this! We may think that an independent taxi driver is not susceptible to loyalty initiatives for its customers:  When an independent taxi driver thinks about his next passenger, he must rely on strangers that signal him from the sidewalk to carry them from one point to another, and then disappear without possibly ever seeing them again. The reasoning for this taxi driver is that the customer is simply the result of a coincidence of space and time, virtually impossible to replicate, and therefore irrelevant to deal with any loyalty strategy. Sometimes, the attitude is enough .

Now let's look at the situation from the client’s viewpoint. When the person is on the street and needs a taxi, does he simply approach the sidewalk, signal for a cab and climb into the first vehicle that stops for him? Of course not. First of all, the passenger considers whether he should take a taxi from the street or call for one. If he chooses the first, he gets closer to the sidewalk, begins to wave his hand, and when a taxi approaches, he enters the second phase of the evaluation.

After the taxi stops, the man considers: does the cab look legal and does it have it badges and documents in order? Is the exterior clean? Does the cab arrive at high speeds or moderate speeds? Does the driver approach the sidewalk prudently or negligently? Consciously or not, all these criteria have crossed the client's mind, all before even coming into contact with the service.

After the second evaluation phase, comes the third with these questions: Does the driver seem clean and pleasant? Did he greet the client with kindness and look the client in the eye? Does the driver start the meter as he should and does he specify the rate that applies to the trip? Is the interior of the car clean and neat?

Assuming that this stage passes and the client has reached a decision to take the taxi, the questions continue: Does the driver handle the taxi well? Does the driver offer route choices to reach the destination? Does he offer to open or close the window to make the trip more enjoyable? Does he play music? Does he smoke without asking if it bothers the client? Upon arriving, does he request payment pleasantly? Does he thank the client for choosing his taxi and does he wish the client a good day? We could continue to provide all the factors or criteria you use to evaluate customer service.

And finally, if this client were you, and you had an extraordinary experience in the taxi and know you’ll have another trip soon, do you ask the driver to wait or return at a certain hour? Or ask for his card so that you can call for him at another time? And then we ask the last question regarding the taxi’s service: Is he prepared to give you details so that he can be contacted for services in the future? In short, these taxi drivers have executed, knowingly or not, a good strategy for achieving customer loyalty.

Turning back to the pragmatic question with which we began this exploration: Can my business, profession or trade benefit from a loyalty initiative? YES, any situation where there is a relationship between a supplier and a consumer of a product or service presents an opportunity for loyalty.

Of course, complexity and implementation of the strategy changes depending on the trade or business and the customer profile. But if an independent taxi driver, an alleged victim of chance, can generate loyal customers through a good attitude, imagine what a proper loyalty strategy can do for a tailor, pharmacy, clinic, multinational financial services company, or the government. We all deserve loyalty.

miércoles, 27 de enero de 2010

New trends in customer-centric organizations

We have all heard of the premise of a "customer-centric organization." This concept basically proposes that the needs and wants of consumers should form the backbone of an organization, giving it a singular focus and clear direction that guides all of the company's decisions and actions. In theory, being customer-centric is a sensible strategy, but many companies take their interpretation of the concept too far, leading to errors in execution that can have grave long-term consequences.



The basic premise to “base all of a company's actions and decisions on what will please the customer” is definitely an honorable concept. This same premise, however, poses the greatest potential risk for improper interpretation. If a company does everything in its power to please its customers, how does it determine when organizational goodwill is taken advantage of by insatiable customers who will never be happy, no matter what actions a company takes?


Consumers always want the best product and the highest quality at the lowest price, delivered with the most convenience and comfort possible. The challenge for a company is pleasing customers with varying tastes, since the definition of quality, price, convenience and comfort varies from one customer to the next. In this scenario, it's easy to see how the concept of a “customer-centric organization” is impossible to retain in its purest sense.


To illustrate the point, consider the example of something that we are all familiar with – taxes. Assuming that the government could adopt a “customer-centric” strategy, do you think that we would all be willing to pay the same amount in taxes? Do you think we would all even be willing to pay taxes at all? Everybody in a society, even those who are part of the informal economy and do not pay taxes, wants electricity, water, roads, safety and other quality services – regardless of how we may define them.


Another example, even more extreme, further presents the complexity of the argument. Consider the case where you go to the doctor, expecting to be treated in an efficient and effective manner, with the physician applying the skills and experience necessary to determine the best treatment and cure the ailment. During the course of treatment, there may be some discomfort or even setbacks, but the end result is what is driving the decisions, not the process itself or anything that is experienced along the way. This is the same process that we use when considering a purchase of any product or service. Whether it's a music player, a haircut or a car, we are all looking for the solution that best suits our needs, without regard to the process we undergo to make our decision.


To be successful and viable in the long-run, modern companies must of course understand and accommodate the needs and wants of consumers. But companies must also also realize that being customer-centric does not simply mean that a business must blindly cater to the whims and desires of its customers. Businesses must apply their knowledge and experience to propose solutions that are practical, profitable and sustainable over time. In addition to satisfying their customers, companies must show the same level of commitment to their shareholders, employees and local communities.


Companies must offer a sufficient return on investment for the shareholders, investors and suppliers that provide the resources to develop the business. They must satisfy employees and business partners by offering support, development and security in return for their effort and dedication. And finally, businesses must realize the impact they have on the community and should act responsibly and ethically to be good corporate citizens at all times.


All companies should believe in the products and services that they offer. What is the best wine, the best mobile phone or the best type of music? There is no single answer to this, since it varies by person and even for the same person, depending on the specific situation. All that the winemakers, phone manufacturers and musicians can do is offer the best product possible, based on their knowledge and experience. Feedback from customers should certainly be taken into account, but it can not be the only factor, since the interests of shareholders, employees and communities must also be considered. As business leaders, we owe our allegiance not only to our customers, but to all of the individuals and organizations that contribute to our long-term viability and success.

miércoles, 20 de enero de 2010

The new mexican customer

Studies commissioned by ampersand and performed by MDI Group during 2008 and 2009 revealed the importance of understanding customers and building loyalty as a key strategy for retention. The study, titled “Evaluation, understanding and market segmentation of loyalty programs,” conducted in 2008, determined:


  • 62% of the respondents have a loyalty program, and
  • 77% considered that a loyalty program was “important” or “very important” when choosing a product or service.
 A deeper study made in 2009 revealed that, of the consumers who have a loyalty program membership:

  • 90% used the loyalty program in the past 12 months
  • 73% would “recommend” or “highly recommend” the loyalty program, and
  • 28% increased their use of, or sought to only use, products or services that have a loyalty program.
In addition, in response to specific questions asking them to evaluate the programs they use, the 2009 study determined:

  • 48% are attached to the brand, shown by a resistance to use or purchase competing products or services.
  • 57% purchase or use the brand's products or services more frequently.
  • 66% have recently redeemed points or received benefits from their loyalty program.
  • 67% intend to purchase products or services of the company that has the loyalty program.
 With respect to the preferred brand use, the same study revealed that amongst the members of loyalty programs:

  • 33% like to immediately redeem their points for goods or services.
  • 49% prefer to wait and accumulate points over a longer term for larger rewards.
  • 93% want to redeem points for benefits such as gifts, theater tickets and other prizes, rather than receive cash rewards or "cash back."
With these figures in mind, it is clear that consumers in Mexico prefer companies that focus on their customers. There are many examples in the news of companies that have introduced innovative promotions and value-added programs to attract and retain new customers.

A wide range of companies – including financial institutions, logistics and shipping companies, medical groups, engine manufacturers, hotel chains, insurance and real estate firms, retailers and budget airlines – represented a diverse but focused group of companies that introduced or strengthened their loyalty programs and demonstrated a renewed commitment to their customers and potential customers in 2009. Without a doubt, many of these companies strengthened their hold on their customers this year, even through the economic turmoil.
 

miércoles, 16 de diciembre de 2009

Estrategia para lograr el éxito en el 2010

Este 2009, como lo han mencionado los empresarios, financieros, políticos y trabajadores, es el peor de los años en la historia de  México de las últimas 3 décadas. En consecuencia, grandes empresas quebraron, negocios cerraron, proyectos se pospusieron, y cantidad de personas perdieron su trabajo o fuente de ingreso en números récord.


Por si fuera poco, nos vimos inmersos en una debacle político-presupuestaria que propuso de todo, desde impuestos que incrementan la brecha digital y limitan el acceso a información como lo es el impuesto al Internet o a las telecomunicaciones, hasta perpetuar el rezago histórico de la dependencia del petróleo como variable manipulable para hacer cuadrar el presupuesto. Se propuso todo tipo de aberraciones que además se complementaron con otro tanto de estériles debates retóricos entre fuerzas políticas incapaces de provocar cambios y que terminaron por producir más de lo mismo: “reformas” superficiales que taparon huecos presupuestales inmediatos, pero a la vez, perpetuaron y profundizaron al posición de nuestro país en el vagón tercermundista del convoy locomotor que es la actual economía globalizada.

Pese a todo esto, sin embargo, existieron esperanzadoras historias de éxito en nuestro país. Desde una simbólica selección mexicana de futbol que recuperó la senda para lograr su calificación al mundial Sudáfrica 2010, hasta innumerables empresas, pequeñas y grandes, que no solo mantuvieron su posición en el mercado sino que inclusive expandieron sus operaciones, incrementaron sus ventas, y ganaron mercado.

Algunas de ellas, simplemente se vieron beneficiadas por las condiciones de mercado –si, créalo, hay muchas compañías que tienen sus años de mayor bonanza cuando al resto de la economía le está yendo mal, como lo son empresas de out-placement, despachos especialistas en cobranza, o inclusive la industria médica y la educación superior. En esta última, por ejemplo, gente que no encuentra empleo decide aprovechar su tiempo para adquirir nuevas habilidades y se enrola en programas de educación superior.

Sin embargo, la mayoría de empresas que alcanzaron importantes logros durante el 2009 lo hicieron a través de:

a) enfocarse en el largo plazo – resolver los problemas de hoy, pero sin mermar la capacidad para continuar construyendo el mañana

b) identificar y explotar o eliminar sus fortalezas y debilidades respectivamente – aprovechar que la crisis delató lo bueno y malo de la compañía para introducir mejoras y fortalecer las capacidades, y

c) acercarse a sus clientes – reconocer que la demanda por sus productos o servicios no desapareció sino simplemente cambió, y abordar entonces al mercado con propuestas de valor agregado

Aprovechando lo que hemos aprendido en el 2009, y consientes de los continuos retos económicos, políticos, sociales y de mercado que enfrentaremos en el 2010, las empresas debemos enfocarnos en desarrollar e invertir en proyectos que logren apalancar la mayor proporción de nuestros recursos en la parte baja del embudo mercadológico.

En un mercado donde las alianzas estratégicas y las coaliciones trascienden barreras y alcanzan todos los aspectos de la vida institucional de nuestro país, la alianza más importante que debemos buscar y pelear aguerridamente, es la alianza con nuestros consumidores. El 2009 fue el año de quienes supieron cimentar el vínculo con sus clientes, el 2010 será de aquellos que sepan construir lealtad sobre ese vínculo.

miércoles, 2 de diciembre de 2009

El consumidor cambió

Estudios comisionados por ampersand y realizados por Grupo IDM durante el 2008 y el 2009 revelaron la importancia de acercarse a los clientes y generar lealtad como una estrategia clave para su retención. En el estudio: “Evaluación, conocimiento y segmentación del mercado sobre la categoría de programas de lealtad” realizado en el 2008 se sentó la base de que:


• 62% de los encuestados cuenta con un programa de lealtad, y
• 77% considera relevante o muy relevante el contar con un programa de lealtad al escoger un producto o servicio

En el estudio: “Profundización sobre los principales hallazgos encontrados” realizado este 2009 se encontró que, de los consumidores que cuentan con un programa de lealtad:
• 90% utilizó su programa de lealtad en los últimos 12 meses
• 73% recomendaría o recomendaría mucho su programa de lealtad, y
• 28% incrementó el uso de, o buscó utilizar únicamente productos o servicios que cuentan con programa de lealtad

Adicionalmente, en respuesta a preguntas específicas de evaluación de los programas con los que contaban los encuestados, el estudio 2009 reveló que:

• 48% tiene apego a la marca que ha demostrado por la resistencia a mudarse con un competidor o adquirir productos de la competencia
• 57% cada vez compra o utiliza con mayor frecuencia los productos de la marca
• 66% ha cambiado o recibido beneficios recientemente de su programa de lealtad, y
• 67% tiene intención de comprar productos o servicios de la compañía con la que tiene programa de lealtad

Con respecto a la preferencia de uso, el mismo estudio reveló acerca de los miembros de programas de lealtad que:

• 33% gusta de cambiar sus puntos por productos o servicios para si
• 49% prefiere esperar a acumular para productos que requieren más o menos puntos, y
• 93% quiere redimir sus puntos por beneficios propios ya sea regalos, boletos de cine, etc. y no por recompensas en efectivo o “cashback”

Con cifras tan reveladoras como las anteriores, es claro que la preferencia de los consumidores en México se dirigió a beneficiar a aquellas empresas que se enfocaron en sus clientes.

jueves, 5 de noviembre de 2009

La clave del éxito de las compañías modernas

Seguramente has oído hablar de la “organización centrada en el consumidor”. El concepto propone colocar los deseos y preferencias del consumidor final como eje central de la organización.

Tomemos todas nuestras acciones y decisiones con base a lo que agrade y agregue valor a nuestro consumidor, propuesta acertada. Sin embargo, si hacemos todo por complacer a nuestro consumidor, ¿dónde debemos establecer la línea que separa nuestra buena voluntad del abuso de consumidores insaciables?

Puedes estar seguro que los consumidores siempre querrán el mejor producto, con la mayor calidad, al menor precio, con total adecuación a sus gustos y entregado con la máxima comodidad. Pero no solo eso, sino que adicionalmente, la definición de la calidad, precio, adecuación y comodidad serán muy diferentes de un cliente a otro. Bajo esta contextualización, ¿es realista pensar que el concepto de “organización centrada en el consumidor” es ejecutable en su más purista interpretación?

Un buen ejemplo para este tema y dejarlo claro, es hablar de un tema del que todos somos partícipes: los impuestos. Asumiendo que el gobierno pudiera adoptar una estrategia de ser “centrado en el consumidor”, ¿crees que todos estemos dispuestos a pagar lo mismo en impuestos? Más aún, ¿crees que todos estemos dispuestos a pagar cualquier impuesto? Pero eso si, todos, aún aquellos que forman parte de la economía informal de nuestro país y que no pagan impuestos, queremos tener buenos servicios, luz, agua, buenas calles, seguridad, etc., etc., etc. –independientemente de nuestra interpretación individual de los mismos.

Aunque de una manera menos imperante este mismo razonamiento lo aplicamos al consumo de cualquier producto o servicio. Sea un reproductor de música, un corte de pelo, o un automóvil, todos buscamos una solución a una necesidad que nos dé el mejor resultado y para ello nos suscribimos a una propuesta resultado de la experiencia y conocimiento del proveedor que elegimos.


La compañía moderna, para ser exitosa y viable en el largo plazo, debe reconocer y atender a los deseos y preferencias de los consumidores, por supuesto. Pero también debe reconocer que ser centrado en el consumidor no implica cumplir sus caprichos y deseos, sino entenderle y aplicar sus conocimientos y experiencia para proponer soluciones que sean prácticas, rentables y sostenibles en el tiempo. Además de los consumidores, hay otros grupos a los que la compañía se debe con igual nivel de compromiso: sus accionistas, sus empleados, y sus comunidades.


Las compañías debemos tener convicción en los productos y servicios que ofrecemos. Aún para la misma persona, su preferencia variará de acuerdo al momento o el propósito específico del uso. De manera que la fórmula perfecta no existe. Debemos avocarnos a producir nuestra mejor propuesta basadas en nuestro conocimiento y experiencia y de la manera más eficiente y rentable posible. La retroalimentación de nuestros consumidores es una parte básica de nuestros impulsores, pero también lo debe de ser los intereses de nuestros accionistas, empleados y comunidades. Como hombres de negocio, le debemos nuestra lealtad no solo a nuestros consumidores, sino a todos aquellos partícipes de nuestra empresa que garantizan la viabilidad a largo plazo de nuestro negocio.