Tag Archives: pricing

How to lose a customer, How to gain a customer

In today’s world people’s need for instant gratification is stronger than ever. We don’t have to go to the video store any more, we can just play movies instantly on Netflix. So Blockbuster loses customers after all the years of pissing people off by charging ridiculous late fees and having an inferior product. Why would I pay crazy rental fees at Blockbuster, when I can pay $9.99 a month to watch as much as I want? Now they are going out of business. Same thing with Borders books. Why would I go to the bookstore and spend $3.45 a gallon on gas, when I can just download the book to my iPad from wherever I am in the world with an Internet connection? Why would I pay $30 for a book when I could have it instantly for $9.99, or for $4 if I bought it used from Amazon? These are just two examples that immediately come to mind as I am watching what used to be two powerhouse companies shut their doors in Tampa and around the country.

This is not a trend that’s going away. It will only get worse as technology improves, and as the younger generations who are used to it get older, making up a greater part of our population. If you don’t think this affects your business, or the business that you work for you should stop being naive. It affects all businesses and organizations. How much software do you still get on CD? Heck how much software do you still install on your computer? It seems like a new SAAS (Software as a Service) provider pops up every two minutes, with great products most of the time.  Why would I want to install software on one computer, or many of them for that matter, when I can access my software through any device that has Internet access and a web browser?

Today Zephyrhills lost me as a customer to a smaller, cheaper, more agile competitor. After receiving my $71.00 water delivery bill from them, I gave them a call to see why I was being charged $7.00 a bottle for water. They informed me that it was because the price automatically goes up after a year. I’ve had service with them for 2 years, so I’m not sure I buy that. The person on the other end also had a very hard time speaking English. On a side note, if you really want to lose customers, hire workers lacking this most important skill set to answer your phones. You might as well stop offering phone support all together. You probably wouldn’t aggravate as many people.  After getting frustrated with the rep and the answers I was getting, I was transferred to speak to someone about changing my service. At my old office I had a water filtration system instead of the water bottles and it was considerably more cost effective. It was also nice not to lug and store 40lb water bottles that needed to be replaced every two days. I was interested in getting this installed again. The new rep, who could speak English, informed me that she needed to contact the installer to answer some of my questions and that he would be giving me a call back. After two days of not receiving a call back, I decided to call the a competitor, Arctic Spring. They were friendly, answered all of my questions competently, spoke English, had the product I wanted, and could install the next day. One more thing, they were $25 per month, with a $20 install fee! So I get similar water, my bill is cut into a third, they have good customer service, they are local, I have a person I can call instead of a company, and they came out to install the next day. Zephyrhills couldn’t even give me a call back the next day.

Folks this type of stuff is going on all around us. This is a real life example of how companies are changing the game to put a beat down on their competition. The old way, just doesn’t work anymore. The important question to ask is this; is your company Zephyrhills or Arctic Spring?

Don’t just say NO, scream it!

This is a topic that seems like a dead horse that just keeps receiving a beat-down, but for some reason budding small business owners rarely seem to listen. As a matter of fact, those in the service industry seem to listen the least. It’s one of those things that most need to try before they buy. But I will tell you right now, there is no reason to put yourself through this kind of pain.

Here’s the scenario. You are just starting out, or perhaps you’ve been around and business is a little bit slow. Then this deal comes around. It has an odor to it. Sometimes the stink is so unbearable that your eyes start to water and your stomach starts to turn. A good example of this would be someone who wants to pay a thousand or two for $10k worth of your services. It’s a bad idea to take this business, and you know it from the word go. Most of the time these types of deals will anger you enough that you will just walk away and spare yourself the pain.

The second smell is a little more subtle and a lot more dangerous. It’s the guy that wants what seem to be little compromises. Certain wording in a contract. A 10% price break. A smaller security deposit. Much like the carrot salesmen, these guys have more angles than I can think of. What will happen with them, is they will feel you out, and see where you will bend. Once they understand your vulnerabilities, they will capitalize on them every chance they get. Along the way, you get the feeling that you are probably not a good fit, but what can you do? You need the money. When all is said and done, you made the stupid decision to do business with them and you ended up losing money. In the meantime, the rest of your business suffers because these guys tend to be time vampires. They want to meet all the time, but they don’t want to pay for it. You can never keep them happy. They have designed it this way. If you feel like they are constantly unhappy with you, you will do more to try and get back in their good graces. They don’t value what you bring to the table, they proved that during negotiations. They are not concerned about the welfare of your company. If they put you out of business, they will just pick up the pieces and go somewhere else.

I have made this mistake on a number of occasions. I don’t want you to make it too. I implore you to be careful of these types of situations. Never, ever accept business out of desperation. As much as you may start to believe there is nothing else out there for you and you have to take the deal, I have rarely found that to be the case. Run away from bad deals and turn up your hustle meter. Get out and network some more. Call up a few of your current clients, see if there is anything you can help them with. Look at your expense sheet and see where you can cut some things. Just always keep this in mind. If you say yes to the bad deals, it makes it hard to say yes to the good ones.