A Customer Service Blog

Last week I had the pleasure of presenting to an audience of 100+ business owners in a beautiful country house near Lewes in Sussex.  My colleague and I had the privelege to be asked to present a ten minute slot at the Sussex Enterprise’s Sales Maximisation event.

The topic of our discussion was assessing the lifetime value of each individual customer.  We used examples of a cup of coffee through to a high-end software purchase and the main point throughout was that each so called “moment of truth” within customer service is vital.  Many people often only view each transaction within its face value context so for example a cup of coffee may only cost £2 but if that customer keeps coming back their value to say Starbucks can keep growing exponentially.

Many of the business owners we were pleased to be able to meet with on the day from the audience said that some of their biggest culprits for not understanding lifetime value were their sales people.  I must stress at this point that this was their view and I am not casting unfounded aspersions towards salespeople.  According to the audience the majority of salespeople they had working with them dealt with customers with very much that particular transaction in mind and not what the client might be worth over their lifetime.  The general consensus of opinion was that salespeople were focused on each individual deal because of the commission relating to it.

At the end of the three talks that were given that morning the floor was opened up to questions and answers and the first question came from a gentleman within the audience who ran a business selling auto-tuning parts for BMW.  His main problem was that there were so many people selling this part that it was very difficult to differentiate on anything other than price.

My fellow speakers and I gave him some tips on how to overcome this such as running promotions, becoming an expert in his field and therefore the trusted person to buy this from, writing articles, blogs and publishing videos to get his name out there on the internet.

One of my fellow speakers was an excellent presenter with a very easy way about him called Jono Oswin from the Design Distillery.  Jono’s very interesting talk was on the subject of “are you selling what your customers are actually buying?”

Jono’s answer to the gentleman in the audience was very telling and insightful.  He told us all that he had previously worked in marketing for Texaco and had been responsible for helping them shift more units of petrol.  Now petrol is one of those commodities that is a) very hard to differentiate and b) is extremely price sensitive.

Jono asked the audience how many people bought petrol on price alone and asked for a show of hands.  Interestingly less than half of the people bought their petrol based on price and in fact most of them chose where they bought their fuel from for a number of other reasons.  One of the reasons was actually convenience both in terms of where the filling station was located and also how easy it was to park on the forecourt / the number of pumps they had available.

Overwhelmingly in the audience upon some further questions many people also stated that although they had never really thought about it service was actually a major factor.  Lots of people said the attendants knew their car and so they never had to remember their pump number, others said some of them even knew their name.

So here we have a product that on the face of it is nothing more than the most basic of commodity purchases with high price sensitivity and a great deal of competition but when questioned the majority of the audience said that when they thought about it they actually bought on service.  Of course there will always be some people who will drive around looking for a penny off per litre but if this straw poll in the audience was anything to go by they are very much in the minority.

The message here is a simple but very powerful one and it is that even in one of the most price sensitive marketplaces people subconciously bought their petrol because of service and not how cheaply they could acquire it.

This entry was posted on Thursday, March 11th, 2010 at 3:42 pm and is filed under Customer Service Training. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.