A few years (decades!) ago when my parents and aunt and uncle owned Clear Lake Lodge, I was left in charge as the general manager, also known as “Mom,” had to attend another commitment. This was a big responsibility in a 22-room hotel. I wanted to create a success and make a good impression on the boss.
Except, it was off-season, and the place was empty.
“Don’t burn it down!” was my Mom’s advice.
A gentleman came in and inquired about a room. I gave my best pitch. He said he wasn’t interested, possibly due to my youth and enthusiasm. Unfazed, I said, “Why don’t you stay the night, and if you don’t like it, you don’t have to pay?” Intrigued, he accepted the offer.
I figured if he didn’t like it and didn’t pay, I could make up the room before the General Manager got back and she’d never know of my “Like it or free” guarantee.
In the morning, he was happy, and paid. I made a sale! And, he booked a week-long vacation for later in the summer.
Since he was coming back, I had to explain my offer to the boss. I told her, “Mom, I don’t have white hair like you do so he didn’t really trust me, so I had to offer him something he couldn’t refuse.”
He liked the charm of the place so much, he continued to reserve week-long vacations with his wife and another couple for several years. The life-time value of that customer, not to mention the referrals they made, was significant.
I define customer wealth as the ability of your company and your people to attract and retain your ideal customers and clients. Notice that I mentioned “ideal customers.”
Here are five steps to maximize your Customer Wealth:
- Clearly identify your ideal customers and prospects, the kind you want to be dealing with in one year, the kind you enjoy working with and that appreciate and are willing to pay for your unique value.
- Make sure you have unique value to offer. This is your strategy but explained from the customer’s perspective. Too often, companies define their value proposition or strategy based on their technical competence. The customer doesn’t care about your competence; they expect it. They do care how you are going to make their business and life better, more comfortable, more profitable, less risky, faster, stronger, and richer.
- Make it easy for a new customer to do business with you. Offer a guarantee. Give them a reduced price. Or, my favorite, demonstrate your expertise for free so you are providing them with value before they even hire you or buy from you.
- Pay attention to your best customers. Give them special attention and the occasional bonus or unexpected offer. My favorite car dealer, Dilawri BMW, gave me a new set of winter tires when my old ones didn’t fit on my new car, despite our expectations they would. Thanks, Andy!
- Be proactive. Don’t wait for your best customers to call you and place an order. That lowers your status to an order taker and that’s when the price competition starts in a race to the bottom. Think and act like a consultant. Give them value to help them be more successful.
The Clear Lake Lodge experience of the customer guarantee showed me the power of making it easy for your ideal customer to take a test drive and try your product or service. The downside is very low. The upside is the lifetime value of that customer and their referrals.
Make it easy for a new customer to start doing business with you. Make it difficult for your best customers to even think about your competitors because you’re always being proactive, anticipating their needs, and helping to increase their success.