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Looking for customers

What it takes to get customers to return

As a dealer, you probably spend two to three percent of your gross sales looking for customers, and inviting them to come into your business. On your income statement, this expense is called advertising. It is an activity we have talked about several times in this column; how to maximize your dollars, as well as how to maximize the results.

Surprisingly, the people you are looking for are also looking for you. According to an extensive research project by the school of business at a northeast college, your customers are also wanting to find the store they are looking for. It is not that they cannot find the store with a map, but they are not finding a store that is placing the same level of importance on several items that the customer values.

This school of business is not located in a major metropolitan area, but the residents are within driving distance of the larger city. The questions were asked to help the local merchants determine what they could do to keep customers from making the drive to the city. Each question was to have two answers; how important is this issue, and what is the level of performance you believe you are receiving. From a list of sixteen issues, we will review only those where the issue was rated high, and the issues where the performance is tremendously lagging the importance.

The number one issue in importance is having friendly, knowledgeable personnel. While the performance was slightly less, only 57% of the consumers responding said shopping at a local store was an enjoyable experience. The experiences of this writer in working with dealers around the country has been that we have a very high opinion of the customer service we give. Yet, consumers are hard pressed to cite repeated examples of outstanding service.

There are two categories which stand out, as there exists a tremendous discrepancy between importance and performance. The first is the importance of a quality product. The respondents rated this at 77%, but said the local merchant was only performing at a 59% level.

The consumers also said, at the same 77% level, that it was important to receive a good value for the money. The performance level was even lower in this category, where local merchants received a dismal 38% rating.

The follow up question gave an answer, in which 70% of the surveyed customers said they would increase their interest in the local store when more of the goods and services they were looking for were made available.

We could stop the survey at this point and spend the rest of our space on this one issue. It appears this is a clear message from our customers saying they are looking for something else. Too often, we have heard dealers express their concern about the discount stores and their inability to compete on prices. Dealers who have been successful in competing with these retailers have said their success has been due to a two step procedure.

The first step has been to stock those few items which the discount stores feature in their ads, displaying them prominently, and at the same price as the discount store. This allows the dealer to ease the concerns a consumer has about pricing in the local store. The success, and the profit, lies in having alternative products.

Asking the consumer what attracted them to the low price item, the successful dealer works to move the consumer to a choice which the discount store does not stock. This strategy resolves several issues; the first is the head to head competition. The second and third are direct answers to our survey - having quality products and providing a good value.

Continuing with the survey, there were several other sizeable discrepancies in the importance and performance categories. One is having a favorable return policy, a second is providing good service, including warranties, and the biggest discrepancy was in pricing. Other items in which the performance was lagging behind the importance was free parking, evening hours, and having weekly sales.

Without your addressing each of these issues, the chances of success are fairly small. Approximately one in three consumers gave affirmative answers when asked if they preferred to shop locally, if they try to shop locally first, or if they would pay slightly more for an item locally so they would not have to travel.

Where have the local merchants excelled? There are several categories in which the performance level exceeded or closely matched the importance level. With these positive answers, we can see the items you should consider promoting in your advertising.

One of the highest rated items of importance was convenient location. Also included in this list were atmosphere, relaxed browsing, the exterior appearance of the store, and Sunday hours. Of course, these are the results of their survey. If you are not offering Sunday hours, or the exterior of your business looks like it did 25 years ago, these are issues you should address.

This writer has experienced several occasions of visiting a dealer, only to find no customers in the store at the time of our visit. When asking the dealer where all of the customers are, the answers have varied from not knowing to making an educated guess as to why they are not spending money with the dealer.

We may be like this dealer; looking for customers. And with information like this, our customers are telling us what and where they are looking.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179