Few professions are hated with as much passion as telemarketing. Even businesses hate receiving sales calls, and for good reason. The marketing or sales call is an interruption – usually with the intent of selling something that the business never asked for. Many businesses fail to understand this and continue to rely on old tactics of telemarketing to increase their sales. So, how do you switch from becoming an unwanted pest to a welcomed guest? Stop making the same mistakes that everyone else is making.
Blockbuster, the ubiquitous video rental chain of the bygone era, announced recently that they will close 300 stores in U.S. and lay off 3,000 employees. This is after they have already closed hundreds of stores over the years. The latest round of closing will leave them with only 500 stores, down from 9,100 at the peak of their business. This is one of the blockbuster failures in the American business history! To be fair, they are not alone. Recent times have seen number of successful retail businesses wipe out from the landscape – Borders, Circuit City, the list goes on.
Blockbuster was one of the great success stories in how to build an empire by putting number of small rivals out of business throughout the country. Starting with a humble beginning they went on to consolidate the video rental industry to be the eight hundred pound gorilla. And yet, they were not immune to the law of natural business cycle when new competitors came along. There are important lessons to be learned from Blockbuster to ensure your small business does not meet the same fate.
I am always on the lookout for lessons to be learned from my own experience as a customer. I believe small business owners can learn a lot about management and customer service by putting themselves in the shoes of customers. I was presented with such an opportunity when we visited Olive Garden restaurant in Auburn Hills, Michigan over the weekend. This was a special treat from my daughters on Father’s Day.
While I have always liked Olive Garden’s delicious food particularly the soups and salad my experience on this day left a lot to be desired from such a reputable national restaurant. Here is what happened:
Here is an interesting news story we came across this week – Domino’s is launching an advertising campaign in which they claimed that they will NOT allow customers to customize their artisan pizza. Customers cannot add any more toppings to the pizza recipe. Domino’s claims that they have painstakingly perfected their artisan pizza recipe over several months and they refuse to let customers mess with it.
On the face of it, this sounds a bit weird and even risky. How can you say NO to customers who are paying with their own money? They can demand whatever they want with their money. But when you think about it some more their advertising makes sense. In fact, we would argue that saying NO to customers may work brilliantly in their favor. Allow us to explain why it is necessary to say NO to customers once in a while.
Finding and serving the “right” customers is the most important step you can take to improve your sales. Many small business owners feel that the task is easier said than done. As a result, they fail to align their business with the right customer segment. Even when they do attempt to do it they either go about finding the customer needs in ad-hoc fashion or they use wrong tools to segment the customer base.
As we have noted earlier, we firmly believe that segmenting the customers based on their needs as opposed to demographics or location can improve your sales significantly. But how do you go about finding what customers really need and want?
If you have been following business news in the last few months you know that Netflix is going through rough times. Their loyal customers are cancelling accounts in droves and the stock price that was around $300 just 6 months ago is now hovering around $70, wiping out almost $10 Billion in market value. Ouch!!
So what happened? Well, everything that could go wrong did. On one hand, the business of movie rental is going through massive shift – from DVD to streaming video and the competition is increasing with large companies including Apple, Amazon and Google entering the market. On the other hand, Netflix picked wrong time to make changes to their business model and made big gaffes in communicating to their customers.