One of the biggest mistakes I see newly formed businesses make in their business is trying to break into business by offering lower prices. Often times these are former employees who thought they could do a better job than the boss and that the boss was charging a ridiculous amount compared to what they saw themselves being paid.
The problem is that as employees they were not seeing the whole picture of what it cost to run the business, only the difference between what a customer was paying and what they were getting paid as employees.
As a business owner you want to grab as much market share as you can but without giving up your chance to charge reasonable prices. If you compete on price someone will always be willing to go lower and at the same time you are ruining your chances of being able to grow your business. With tiny margins there won’t be any cash left for things like hiring, marketing or buying more equipment.
So how can you win more business without giving away all your profits? The answer is to beat the competition on service. There are a few places where price is all that matters but for most businesses the quality of the service you provide will make a difference to your customers and be something that brings them back or causes them to move on to the competition.
Here are five specific ways you can improve your service experience for your customers:
It’s rare for a customer to call and not want something done sooner rather than later. If they are calling for quotes to get a fence repaired (as I recently was!) and one company offers to come out tomorrow and the other one two weeks from now, which one do you think has the best shot at my business?
We have the same experience all the time with our bookkeeping service. Clients whose main complaint about their former provider was that it would take a week or more to hear back from them. They are surprised when we often get back to them within an hour or two.
With service like that they aren’t going to be inclined to leave us but they will be happy to send us referrals. Getting back to clients, or potential clients, quickly doesn’t cost more but it does go a long way towards building your business. If there is a way to speed up the rate you respond to and service your customers it is going to pay big dividends for your business growth.
If you can be a one stop shop for your clients you are going to not only be able to collect more revenue but you are also going to be able to win more sales.
Going back to my fence repair example, we have some ivy growing on part of the fence that needs to be replaced. One company offered to clear the ivy as part of the job, one company said we’d have to find someone else to do it before they could do their work. There was a cost for the extra work but it saved me the hassle of having to find another person to do the part of the job the second company wouldn’t do. As a result, they got no work at all.
As our bookkeeping company has grown we’ve added services like payroll and 1099 filing because clients were asking about it and we didn’t want them leaving us for someone else who could do it all.
The danger is this strategy is adding offerings you can’t really do well or that are too far outside your main line of work. As long as you are complimenting your core services with your add on offerings you will be well positioned to earn more business.
For a long time the big cell phone companies could get away with forcing customers to sign long term contracts with big fees for early cancelation because there was no good alternative. The problem is customers hate be trapped in something they may not like or which may no longer serve their needs and having no way out.
The dislike was strong enough that competition came in and was able to win enough customers with a no commitment strategy that eventually the big companies had to cave in and offer their own no commitment plans.
Ask yourself, for your business; are there barriers to people signing on with you or your competition that can be eliminated?
If you can offer a no commitment service when their only alternative is to sign up long term with someone else you are going to find a lot of interested customers.
This doesn’t mean they will all jump ship the second month (unless you are terrible in other ways!) but they will appreciate that you are working to win their business all the time and not taking them for granted because they are locked in to a contract.
It doesn’t have to be a contract commitment, either. Any time someone switches from one option to another, there are hassles and costs to the move. If you can eliminate or at least significantly reduce these hassles and make switching to your easier it will be less of a reason for them to stay with someone else.
For our business, we not only don’t require a contract but we also don’t charge a setup fee unlike a lot of our competition, so there is no cost to try us out and that eases the minds of many of our clients who have already been burned a few times by other providers.
Just like with wanting things faster, today’s consumers are all about convenience. If you can provide a lower hassle, easier, more convenient option than the competition you are going to win more business, even if your rates are the same or higher. People will pay for convenience because it means they aren’t paying in aggravation and headaches.
When I had our washing machine repaired recently when went with the service repair company that gave us a one hour service appointment window and not with the guy who promised “sometime between 8am and 8pm” as if it was a favor to narrow it down for us that much!
In our bookkeeping business we try to do everything possible to make it as convenient as possible to work with us. Unlike some others we don’t require clients to scan and email all receipts or mail us paper statements or sort through hundreds of transactions in review. They hire us to make their lives easier not to just shift the burden of work from one format to another.
Under the heading of convenient you can also add in bonus services that the customer isn’t expecting but which make the overall experience better. For example, it’s always nice to find when you pick up your car from getting repaired that they washed it for you as well. Or when you get an extra upgrade you weren’t expecting or a free dessert at a restaurant you haven’t been to before.
If you can think of simple ways to add an unexpected bonus to your business you will see it goes a long way toward growing your business. These extras don’t have to cost you much, if anything, but the rewards they reap are significant.
This one sounds cliché but it’s so true. I don’t mean the kind of friendly that comes from a script where they tell you to have a nice day after they haven’t helped at all. I mean genuine and sincere friendliness and a sense from the person you are talking to that they really do want to help you with your problem, not just take your money.
Most people have challenges and headaches they deal with every day and there are plenty of rude people and unnecessary problems in life as it is without having to add another one. If you can be the friendly face or voice on the phone who actually helps you will be miles ahead of the competition.
This is not a skill you can teach usually so hiring for the right attitude is as important as anything else when figuring out who you are going to have speaking with your customers. You can have people use canned phrases and you can record conversations but if it isn’t real the customers will know and the effort is wasted. If you can get this right people will be talking about you in a very positive light and you’ll be swamped with new business.
If you want more proof just look at companies like Zappos and Nordstroms who have built their entire businesses around friendly helpful customer service and ask yourself how you can be more like that.
In most industries there are a limited number of customers and plenty of competition. If you are just starting out or even if you have been around for a while the easiest, least expensive and most impactful way to grow your new business is through fantastic service. Take a look at the list above and figure out how you can beat your competition on as many of these levels as possible.
If you do that you will never have to wonder where your next customer is coming from because they’ll already be lined up at your door!
Matt Remuzzi is the owner of CapForge Bookkeeping, a full service nationwide bookkeeping service that specializes in high quality, highly affordable service for small businesses and startup entrepreneurs. Matt has a popular QuickBooks book on Amazon and you can find him on Twitter daily. If you have questions, he’d love to hear from you!