Assessing why you both win customers and lose customers is an essential, but often overlooked element of effective marketing. If you don’t know or don’t understand all of the reasons why you are winning customers how can you effectively duplicate what works best? And, if you are losing customers, why can you do to address the situation?
An Exercise Worth Undertaking
The exercise of assessing customers won and loss enables you to reflect upon past and current marketing effectiveness, while also helping to identify current and future areas of opportunity or need for attention:
* Are you offering the winning combination of goods and services in a profitable, effective manner?
* Is your staff sensitive and responsive to customer or client needs?
* Do you periodically review your marketing strategy in the face of shifting markets?
* Do you regularly monitor the activities of competitors?
Many sales professionals and entrepreneurs do a reasonably good job in assessing the effectiveness of individual components of the overall marketing program such as the quality of products or services offered, skills of the selling staff, advertising and promotion, and after marketing.
Not in Isolation
Often these components are examined independent of each other; however a balanced assessment of marketing effectiveness must be broad-based.
It’s not always location – Many retailers, for example, make the mistake of believing that the customers they attract are largely a function of location. This type of parochial thinking can actually limit revenues in the long run. As an example, three drug stores are equally distant from a large condominium project in Fort Worth. The drug stores vary somewhat in size and products offered but are similar in most other respects including hours open, accessibility, and general quality of merchandise offered.
One drug store consistently captures more business from the condominium project than the other two, even though it has no particular location advantage. The reason? The manager of the winning drug store is in the habit of asking customers where they are from in the area.
Rising to the Top
Over many weeks, when he realized that he was capturing a significant portion of the condominium business, he began to cater to their needs. He started stocking 25 x12 x1 filters for heat pumps because that what the condo residence needed. And happily, they needed one each month.
Similarly, he began stocking bathroom filters, reflector light bulbs, microwave popcorn and a variety of other items that directly addressed the needs of this large body of customers.
The other two stores did a healthy volume of business but, never having assessed why customers came to them went, about business as usual – they offered seasonal sales, special discounts and so forth. Over time, the drug store in tune with the needs of the condo project (and I might add, in tune with the needs of other nearby groups) enjoyed a healthier volume of business. The sales per square foot was higher, the profitability was higher, the average cash register ring up was higher. The other stores little chance of matching the revenues of the winning drug store. ’Nuff said.