Entrepreneurs who build strategies thinking that their customers are just like they are may be way off base.
They expect consumers to behave a certain way because that’s how they themselves would respond. They assume the market likes what they like, thinks like they think, and reacts like they would react.
I know what I am talking about because I made this very mistake.
When I launched an innovative product into a very traditional market, I thought customers would be highly motivated to consider us as a new and exciting alternative.
While that proved true in many cases, at least half of the market was suspicious of its value because we had strayed from what they were used to. We had to change gears quickly to address their concerns while still promoting what made us distinctive.
I’ve come to learn: You can invest your energy in wishing customers would behave the way you expect them to, or adapt to the way they actually do behave. This is reality versus theory at its core.
A good example can be found in a few responses I got to my recent column about implementing simple loyalty programs in your small business.
Some readers didn’t like my suggestion. They thought, as consumers, that loyalty programs were a scam, too much effort and would prefer a lower price every day.
I totally get that. But to suggest a business shouldn’t implement a customer-retention program because it doesn’t motivate you as a consumer is throwing the baby out with the bathwater. It’s suggesting that all other customers of the business, present and future, will think the same way that you do.
If you only implement marketing and sales ideas that work with 100 per cent of your potential customer base, you’ll never do anything, because those programs don’t exist.
In this case, loyalty programs are opt-in for the business’s customers; they don’t have to participate if they don’t want to. The broader point is that not every business offers a loyalty program, so you can use one to set your business apart – even though it won’t interest everyone.
Growing a business is extremely difficult and you need plenty of tools in your toolbox. Lower pricing isn’t a bad idea but isn’t necessarily going to get the retention and recognition that a loyalty program can.
So, if a loyalty program or product feature or price reduction or ad campaign or trade show or special event doesn’t move the needle in your business the way that you had hoped it would, you have a choice. You can spend your energy on “it should have worked” or you can get on with it and try something else.
The best reaction is a post mortem on what went wrong. Get feedback from participants and stakeholders. They are the ones who can share actual customer responses. Maybe a loyalty program needs to be dropped in favour of a half- price offer, customer appreciation day on regular intervals or other special deal. Maybe everyday low pricing is what the majority of your customers really do want. Maybe it’s a free gift for every 100th customer.
If you have a reliable communication channel with your front-line staff, have them run new promotional ideas past regular customers first – an informal customer survey/focus group – and see what they react most positively to. That could help guide the details of a future endeavour.
The bottom line is that you won’t know for sure until you try. Once you try, you get customer feedback that can be more valuable than the brainstorming session you had in your office.
Adapt to how customers actually responded, rather than to your assumptions. Don’t get discouraged: A laclustre result is still a result, and gets you valuable information, putting you one step closer to a superior approach.
If a customer group didn’t react the way you expected, that offers an opportunity to make a change and find the sweet spot of the majority.
Chris Griffiths is the Toronto-based director of fine tune consulting, a boutique management consulting practice. Over the past 20 years, he has started or acquired and exited seven businesses.
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