by c.j. Ng

　

     What do customers really want during these turbulent times?  The short answer is simply 2 words:  more value.  Or more precisely, more value at less costs.

　

     As in all short answers, delivering such answers to customers may not be as simple.  However, we can categorise "more value" in the following ways:

• Sell premium brands and products at discounted prices; or

• Provide more products and services for the same price; or

• Find out customers real needs, and then provide practical, yet simple solutions that fit their situation

 

     Is that it?

 

     Yes, and no.  There are pros and cons of delivering the above, and you may just want to be sure what your risks and potential rewards are, before doing so.

"Sale!  Sale!  Sale!"

    12 February 2009 in Singapore.  It was just after the Chinese New Year, and companies are starting to retrench staff.  Amid the gloom-and-doom, there was a property preview launch of 293 condominiums in a centralised location called the Alexis at Alexandra.

 

     Within the first day of the launch, 50% of the units were sold.  Within 3 days of the preview, all units were gone.  Here's how they did it:

1. Prices were discounted by an average of 28% during the preview period;

2. The units are small, and so the total price is low, and are easier to rent out;

3. Buyers can defer payment until the property is built, after just paying a deposit.

 

     So does that mean that if you were to cut your prices and offer deferred payment plans, you will attract customers to you?  Well, not quite.

　

     While the Alexis at Alexandra may have slashed its prices, it is still priced higher than neighbouring properties.  However, because it is perceived as a higher-end product, AND that investors will get good returns with its easy-to-rent units and luxurious facilities.

 

     While many companies resort to giving discounts during turbulent times, they often forgot the other ingredient to make price discounts successful.  In such times, if customers still have some budget, they don't want to buy cheap stuff.  Rather, they want more value for less costs. 

 

      Hence, price discounts only make sense if the brand or the product is perceived to be of high value, but the price is viewed as a bargain.  In this case, it's not a case of how massive the discounts are, but if customers can feel that they can spend much less for something that they desire a lot.

　

     There are downsides, however, to this strategy.  They are:

• Pro-longed price reductions can cheapen the brand and market standing of the product, and may not be effective after some time;

• If your customers don't perceive you as a premium brand or product yet, discounts wll only lead to price wars (when competitors start discounting too);

• Discounts will eat into your profits, and you may then have less resources to do more sales and marketing initiatives.

 

Bells and Whistles

     Besides giving discounts, many companies are beginning to provide additional features such as free add-on products and after-sale service to customers.

 

     The Flint Group in China is a leading provider of high quality printing plates to printers in China and the rest of Asia.  One of their key selling points is that it provides very personable and timely after-sales service to their customers.

 

     However, most of their prospects don't find such services useful, and that Flint's overall price is still too expensive for them.  After some analysis of why their current customers buy from them, they concluded that:

• Some customers, especially in China, have been using low-quality printing plates UNTIL they got some high-end printing jobs that require them to start using high-quality printing plates;

• Since they have not used high-quality printing plates (and the machinery to put the plates on), they NEED the after-sales service to guide them along and help them succeed

 

     After identifying which are the potential customers who would be the most likely to appreciate their service levels, the Flint Group went further to look into ways on how they can add more value.  When the Flint Group found that they are prospects who lament that their margins are squeezed in the low-end printing market, and that they have a strong desire to get high-end customers and move to high-quality printing BUT just don't know how to do so, the Flint Group actually goes to the extent of introducing new business to these prospects, and if they prove credible enough, even provide financing for the printing equipment and machinery. 

　

     Not all companies can afford the luxury of financing its customers' equipment, and even for the Flint Group, it is still a very expensive way to win new customers.  The Flint Group is very much aware that a "value" is not a real value, unless it's valued by the customer.  Additional product features and after-sale services may be great value, but if customers don't really value them, they will not help generate more sales anyway.

　

How May I Assist You?

　

     One of the key requests we get these days is also to help our customers pinpoint what isn't right with their companies, and provide relevant solutions.  The challenges faced by these customers are very varied.  Some complained that "80%of their distributors do not re-order from them", while others commeneted that "While I understand that times are bad, but why is it that our sales performance are so much worse than the industry average?".

 

     However, one thing in common that they all have is that they are very skeptical that our sales training can be of any use, and in any case, training budget has been reduced and put under the microsope for scrutiny.  Hence, instead of trying to convince them why our sales training programmes will deliver the results they want, we take the approach of making in-depth studies of what's going on within their sales forces.

 

     Rather than recommending what sales training or coaching programmes that these customers should consider, we suggested that we conduct interviews with their customers and distributors to understand what is the general perception of their products, brands, pricing, and most importantly, sales people's effectiveness.

 

     We also conduct joint calls with their sales people to visit their customers, and observe what goes on in their typcal meetings with customers.  At times, we even conduct audits about their

• Strategic sales plans and targets for the next 3-5 years;

• Current job descriptions of their respective duties (all levels from sales rep to managers, directors, VPs etc.);

• Details of sales compensation plans;

• Details of sales staff performance appraisals for the past 3-5 years;

• Details of sales deals with major customers for the past 3-5 years;

• Existing CVs (the ones that they submitted when they applied for the job) of the entire team (for all levels in the team);

• Sales revenue for the past 3-5 years;

• Cost of selling, broken down into cost of goods sold, costs of commissions, costs of transport and communications, and costs of entertainment, for the past 3-5 years (to be computed to find out Return on Sales, gross margins trends etc.)

• Current training and coaching practices (incl. delivery and all levels of evaluation)

 

     The above details are not meant to intidimate our customers, but rather as ways to ascertain what are some of their areas that they can improve, and suggest appropriate ways how they can do so.  If you'd also like to implement customised solutions for your customers, here are some factors to consider:

• Are your customers open to sharing some of their private business details with you;

• Can you make it easy and convenient for customers to work with you;

• Are you able to provide the above services at prices or payment terms that are mutually acceptable (espcially given such turbulent times)

　

     While "customisation" has always been a buzzword for the past 2 decades, there are reasons why it is more marketing rhetoric rather than actual practice.  In tough times like these, customers expect more customisation, and sellers are wary of the costs of providing customisation to customers.  If you can customise your offerings to your customers' needs at lower costs, that may just be what customers really want in these turbulent times.

 

     To discuss more about how to attract more customers in tough times, please e-mail info@directions-consulting.com or call +86-136 7190 2505 or Skype: cydj001 and arrange to buy me a mocha.  All information shall be kept in confidence.