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Engine Room Blog

Overcoming the Post-purchase Blues

Wednesday, December 05, 2012 Margaret Holmes

Have you ever bought something and felt just a wee bit guilty afterwards? Have you had doubts that you chose the right size, colour or the right shop to buy from? Whether it was that expensive Christmas present for your mother-in-law, the new light fittings for your bedroom or the mechanic you chose to service your car, most of us have had that feeling after a purchase at some point.

It’s called “Post-purchase Dissonance”, or, the “Post-purchase Blues” as we like to say. It’s the doubting feeling many consumers feel after they’ve made a purchase.

You may be able to remember when you’ve felt like this, but have you ever considered that your own customers may have this feeling when purchasing a product or service from your business? And if so, are you doing anything to combat it?  

Just as you reassure yourself after a purchase, saying things like “Yes I really did need that” or “It was definitely worth the extra $50”, you also need to reassure customers that they made the right decision to purchase from you. This may be as simple as sending a “Congratulations on your purchase” note or a list of answers to Frequently Asked Questions. However, fail to do so and customers’ doubts may escalate into full-blown regret and dissatisfaction: they won’t return to your business and may tell others not to purchase from you.

Leading into Christmas, one of the peak sales periods of the year, this issue is especially important.

Thankfully, overcoming your customers’ post-purchase blues is surprisingly simple. Our latest e-book has 16 easy ways to move your customers from doubtful to delighted. They’re not expensive and don’t take long to implement.

Download it for free using the link below and make sure your customers leave feeling reassured, happy and ready to spread the word about your great business this Christmas. 

Download the e-Book


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The 12 days of [business at] Christmas

Friday, November 30, 2012 Philippa O'Mara

Christmas, it’s upon us again! Yes (whether it agrees with our morals or not), Christmas retail is well under way, Christmas jingles are filling the malls and Santa’s jolly face is lining our streets.

Christmas is both a joyous and stressful time, and can be a tricky one for business owners. I recently presented at BNZ Connect in Pukekohe (a great monthly event for local business owners more details here). My topic was “How to ‘Keep Calm & Carry On’ Business at Christmas”. As it was only early November, I could feel the cringe in the room when I mentioned the “C” word. Yes it seems early, but as a business owner or operator, it’s important that you’re prepared for Christmas. 

Check-off these 12 days of Business at Christmas to make sure you’ve got everything covered:

1. Annual Closedown

Closing down for the holidays? Make sure staff get at least 14 days’ notice. They are entitled to public holidays on Christmas Day and New Year’s Day, and paid or unpaid leave for the rest of the period. If any employees have accrued a large amount of leave, Christmas is a good time to encourage them to use it.

2. Keeping it Open

Staying open? Plan your staffing well in advance. At the very least you’ll need someone to cover the essential tasks (like payroll, clearing voicemail). Make sure skeleton staff have “emergency” contacts for relevant managers and suppliers in case anything goes wrong. 

3. Extra Staff

If you plan on keeping up a full service, start thinking now whether you’ll need to take on extra staff – casual, part time or fixed term. Even if you take on casual staff they will need employment agreements. See www.dol.govt.nz for the latest rules on pay rates and a very handy “Employment Agreement Builder”.

4. Tax: Gifts & Entertaining

Staff Christmas functions are 50% tax deductible and staff/client gifts are 100% tax deductible (just keep the latter below $1,200/year to avoid Fringe Benefit Tax). 

5. Telling your Customers

Alert customers of your seasonal hours to avoid any misunderstandings. You can use this chance to remind irregular customers of your business; send a card or email, phone or even advertise in the newspaper.

6. Managing Stock

Christmas stock orders needn’t be daunting. Prepare a stock forecast by looking at sales records or your stock system.  (Note: if you haven’t got a stock system or method of obtaining accurate sales records, add it to No 11 on this list!). Look into flexible stock options available to your business, like consignment stock or stock lines available at short notice.

7. Important Dates

January: 15th (November GST and provisional tax), 20th (PAYE), 28th (December GST)
February: 28th (January GST)

8. Bargains at the Sales

For some, Christmas is synonymous with “Sale”. Before you join in, consider the impact that discounting will have on your profit and customers: you may not get the returns you expect and your customers’ impression of your value may greatly decrease. Try adding to perceived value, rather than decreasing price.

9. Existing Customers

Christmas is a great time to thank customers and remind your customers of the bond they have with your business. Why not send a promotion out to your client database or offer free Christmas nibbles at your store.

10. Taking Time Out

At the very least, take a few days off work and recharge. If you need to keep an eye on things, Cloud systems like Xero are great for keeping in touch with the business while you’re out of the office.

11. New Year’s Resolutions

Reflect on the year that’s been, what you achieved, what changed – are you where you thought you would be? Then look ahead to 2013: where do you want to be in 12 months’ time? Set goals and talk them through with your advisors and staff.

12. New Year, New Customers

Over the holiday period think about what you’re doing to attract new customers. Why should people buy from you over others? What is your point of difference? Where are you advertising and is it working? Maximise your existing customers; how can you find more like them or upsell more? Have you asked them for referrals? 

And remember -

Keep Calm, it’s only Christmas.

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‘What’s In It For Me?’-The Language of Sales

Wednesday, June 13, 2012 Margaret Holmes
 

This information is designed to give you insight into a new language - the language of sales.

It’s the language most people listen for. The one language that is the only true language to reach someone, and to generate a positive response from your marketing.

One you and your team have to learn and use every single day, day in and day out, especially if you want to win positive responses to your advertising, direct mail, phone techniques, and face-to-face selling!

Every time you speak with a customer or put pen to paper to write to them, your customers are waiting to hear this language of sales.

This ‘language’ answers the question, ‘What’s In It—For Me?’ (WII—FM).

It tells the customer or prospect what your product or service will do for them, instead of just the facts or features about that product or service. It is a language that explains the benefits of your service over your competitors.

Fact is, they won’t buy from you if your marketing material and sales pitch DO NOT answer WII—FM. Your potential customers will, in fact, switch faster than you can say, ‘No, don’t go! We really do have what you need’!

And that’s because this language is just so selective. If your message isn’t sent in that language, it will fall on deaf ears!

To further emphasise this point, imagine this: Your reader or the person who walks into your business is reading or listening to each line you say with a ‘What’s In It—For Me?’ FILTER between his or her eyes, ears and brain.

Put simply, then, anything that is on the right frequency, the WII—FM frequency, is accepted. Turned up, listened to more carefully, and very often acted upon. And anything that’s not on WII—FM is rejected. End of story.

In fact, only 15% of the market shops on price alone. A further 68% fails to buy because of ‘perceived indifference.’ That is, they perceive that you’re indifferent toward them and their needs. Not speaking in their language (WII—FM) gives them that impression from the very outset!

You see, existing and potential customers want your business to focus on them. They don’t want to hear about your business, how good it is, how great you are at what you do, your products and services. They want to hear about themselves. Their needs, their wants. Helping them solve a problem or a need. And results.

If you would like to know more about how to communicate with customers to get better results, download our whitepaper: ‘What’s In It For Me?’-The Language of Sales

 

 
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Why the ‘Lifetime Value’ of Your Client is Important to Your Business?

Wednesday, May 16, 2012 Margaret Holmes

Do you understand how to calculate the financial value of your clients and how you can use that value to make sound marketing decisions?

Less than one businessperson in a thousand really thinks in terms of the incremental lifetime value of their customers, or even knows how to calculate it. Yet the calculation and the very idea is easy and yields enormous benefits.

For one thing, if you know the incremental lifetime value of a customer, you can determine in advance how much you can afford to spend to acquire that customer. Moreover, you can reliably predict your cash flow well into the future.

‘Lifetime value’—a case in point

Lifetime value (or marginal net worth) is the financial value of your clients during the time they deal with you—their ‘lifetime’ at your business.

A case in point comes from a coffee roasting company with a mail order division. The company ran an advertisement that cost $12,000. The advertisement invited potential customers to accept a free coffee maker valued at $51.95 if they bought a sampler selection of fresh roasted coffee blends for $34.95.

Part of the deal was that the customers simply consider a ‘until further notice’ home delivery service—an order of their preference would be sent to them monthly and charged to their credit card. (They were under no obligation to sign up for the ‘until further notice’ agreement. They merely had to consider it. And regardless of their decision, they could keep the coffee maker.)

‘Until further notice’ arrangements mean that the arrangement continues until the customer gives the company notice to discontinue sending the product or service.

The hard cost of supplying the free coffee maker and the sampler pack leaves a net profit of $1.00 per response. When you factor in the $12,000 for an advertisement, you’d immediately conclude that 12,000 responses were needed just to break even, wouldn’t you?

Based on that, you’d probably think the coffee company would be mad to do it, wouldn’t you?

But let’s look more carefully at the numbers.

For each person who finds the ‘until further notice’ arrangement to be a convenient way to buy, the average annual gross profit is $245. So the response rate required to break even falls from 12,000 people to just 49!  Download our whitepaper to find out more..

WHITE PAPER: TOP TIPS TO INCREASE YOUR CUSTOMER'S LIFETIME VALUE TO YOUR BUSINESS

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The Curse of Assumption

Wednesday, May 09, 2012 Margaret Holmes

You Must Educate to Motivate

Many businesses make an assumption that potential customers know who they are, what they do, how they do it, why they are better to deal with than competitors, and more.  Further, they also assume customers know and understand everything offered by that business. In most cases, this simply is not true - this can literally be a ‘curse’ on sales for that business.

Uneducated buyers are often left with no choice but to purchase on price. By working through this issue for your business, you can make sure you’re properly educating your customers.

You see, if customers are educated and, because of that better understand the benefits your business offers, price and other issues become far, far less important. Quality and value, experience, and other benefits become more important.

You also give the impression that you know what you’re doing, care about the customer, and want them to have the right information on hand, instead of showing arrogance by assuming they know how good you are!

You have to sell & ‘educate’ your way to business success or out of a business problem—you can’t just cut the price

An important point—your customers and prospects won’t understand or appreciate the value, your products or services, a bargain, the way you do business, or the benefits unless and until you first educate them to appreciate it.

Merely offering a product or service at a specific price (even the best price) doesn’t compel excitement or a response until you tell people what they’re getting, its value compared to other products and services, and why or how you can offer such value.

And that’s because customers buy the differences they perceive about your business.

Given that, it’s critical that customers understand the differences between you and your competitors—specifically, why what you offer is better than your competitors.

In fact, it is pivotal to tell every potential customer, in a benefit-oriented way, what your business does AND explain the way your business does it, so customers can more easily spot those differences. Otherwise they just won’t know why they should buy from you!

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