Customers purchase products or use our services for one of two reasons. First, because it provides a basic need they cannot live without: food, clothing, shelter. Second, because it satisfies a need they have: to improve their image, improve their knowlege, etc. They cannot live without the first, they think they cannot live without the second. Do you see what I am talking about?

Your "customer benefits" should ALWAYS be highlighted or in the forefront in all your marketing and communication with your customers. When you're communicating with your customers, your thoughts and conversation should center on the customer's benefit of buying your product or using your service.

For instance, I recently started a new business that helps other business owners. One of the main benefits of this business is it relieves the business owner of an embarrassing and difficult task of collecting bad debts. So in our marketing, we emphasize this benefit to them.

Learning to emphasize the benefits requires you to spend some time thinking about your product or service and how you present it to your customers. This is time well spent and will cause you to see immediate results.

Once we have attracted customers to our business by the various marketing methods, we have to use skills that will cause them to continue to return to our business and purchase from us. There are several, but the number one skill is called "customer service" or even better, "customer appreciation".

It is interesting to note, both of these words are Biblical: serve and appreciate (thankful). Our customers owe us nothing. They are under no obligation to purchase or use our service. Once we realize that, we will treat them in a very different manner. First, we will be thankful for each and every customer. Second, we will "serve" them rather than expecting them to "serve" our business.

This is one of the main areas I see that business people need improvement in. They treat their customers in a very disrespectful manner. For instance, they do not greet you when you come in the shop. Some even ignore you as they continue to work their crossword puzzles. Others speak to you with no kindness or apprecation in their voice.

We serve our customers, this is a basic attitude we must have to be successful. This attitude will not only show in our actions but our voice, too. It is amazing how quickly customers can discern our attitudes.

Acquiring New Customers

As I have said, customers are the life blood of your business. Without them, you are out of business, fast. The majority of your energy will be expended acquiring and keeping customers at your business.

In my book, "Don't Be Afraid To Start Your Business", I go into great detail about marketing your business. Acquiring customers actually falls under the heading of marketing, however I want to go into greater detail in this chapter how to do it.

Customers come to our businesses in one of three forms. No, not Good, Bad, and Ugly, but rather New, Repeat and Referral customers.

New customers are the hardest and most expensive to get. You will spend more time, money and energy attracting new customers to your business. If you are just starting a business, listen closely, because your success here will determine whether you are in business two years from now. Once you've acquired some new customers, you can quickly move to the other two levels.

How do you attract new customers to your business? If there was one simple answer to that question, I would be worth millions of dollars. Although there isn't a single answer, there are techniques you can use that will make this task easier and less expensive. Learn to avoid the mistakes others make and you'll increase your odds for success.

Avoid the BIG Mistake

One of the first mistakes many new business owners make to attract new customers to their business is lowering their selling price below the competition. Doing this, they unknowingly are setting themselves up for a business failure.

Let me explain why this is a recipe for disaster. Unless you are introducing a brand new product to the marketplace, your competition has already determined the acceptable selling price for products. To simply try to sell the same product at your business for less will wreck the existing price structure. Your competitors will be angry at you and you still have no guarantee that people come into your shop and purchase from you.

I actually learned this lesson the hard way. When I first went into business selling airline tickets, I didn't know what I know today. I set my margin of profit at 5% and determined that I would be known as an agency that sold airline tickets cheaper than anyone else.

I almost went out of business. My margin was so thin, that I could not always make my monthly expenses, which had a direct effect on my cash flow. My marketing was effective, I was attracting new customers to my business, but I wasn't making enough money. I couldn't figure out what the problem was.

Finally, I went to my father and asked him to help me find the solutution to my problem. His first question was about my margin of profit, how much was it? When I told him, he sternly informed me it was not enough and that if I didn't quickly raise it, I would soon be forced out of business. Thank God for my father! I followed his advice and after several months, I recovered from the near disaster.

Today, my travel company is known as an expert in international travel, not the cheapest. Yes, people want to purchase at a competitive price, but they also want to buy from someone who knows what they are doing. Most of the time, cheaper does not mean better.

Business surveys have proven over and over that the top reasons people make a purchase are confidence and trust in the salesman and the product. Price is hardly ever at the top of the list, only a few people consider price first.

You really do not want to build your business with people who only buy at the cheapest shop. Why? Because when they find another shop that will sell for less than you, you will never see them again. Is that really the kind of customers you want? I don't think so.

If you begin your business on the foundation of being the least expensive, you will be trapped into always having to be the just that. You don't have to be the cheapest, all you have to do is be competitive. There is a big difference between the two.

Let me show you a better way to attract new customers. Remember how I have said that cusomers are only concerned about their own need and desire? And that you as the businessman should be thinking about how your product or service should benefit them?

Price your product the same price as your competitors or even slightly higher. Then ADD an additional level of service. Be sure you're friendly, helpful and always smiling when they come into your shop. By doing this, you have made your product different than the competitor's and added value as well.

You have to make your business, product or service stand out from the rest. Ask yourself this: Why should someone come to my shop and buy from me? If you are no different than everyone else, why should they purchase from you? Friends and relatives will, but you want to build your business beyond that small circle of relationships, right?

Concentrate your marketing efforts at smaller groups of people. Why? It is much easier to build relationships with smaller groups and individuals. This is called niche marketing and is highly effective.

Target apartment buildings near your business, going door to door and introducing yourself and your new business. Visit other businesses and introduce yourself. Remember, other business people are consumers, too.

When I was a young man, I was elected as a representative to our city government. It was a very close election between myself and three other candidates but I won. What was the secret to my victory? I knocked on the door of every house in my district, introduced myself and asked for their vote. The other three candidates did not do this.

Business works on the same principle, it is all about relationships. People want to do business with someone they know to some degree. The better you are at building relationships, the more successful you will be in business.

Acquiring New customers is one of the most costly factors in your business. Don't spend all your time, energy and money on this segment. Learn how to turn New customers into Repeat customers.

Repeat Customers

What is a Repeat Customer? It is someone who continues to return to your business and purchase from you. Very simple isn't it? But you would be surprised at how many business people fail to realize the power of this kind of business.

Once you have acquired a new customer, you should immediately work toward the next two levels, Repeat and Referral customers.

Let us think for a moment about this scenario. You have just recently started your business in the marketplace. You recognize a customer who returns to your shop to make a purchase. This should be sending you a positive message: the customer is displaying confidence and trust in you and your products or services. This means you are doing something right.

It has been learned in business surveys that it takes 4 times as much energy and money to acquire a New customer as compared to that of a Repeat customer. It is definitely true in my experience. Since this is true, you should be striving to make sure New customers become Repeat customers, right?

When customers return to your business more than once, they are telling you that you have earned their trust and confidence. Because of this, selling to them over and over again is almost guaranteed, all you have to do is keep them satisfied as well as continue in your relationship with them.

One of your main goals in the sales process is make sure the customer is satisfied and stays that way.

Customers who are satisfied have a tendency to tell other people about where they do business. The more satisfied they are, the more likely they will tell their friends and relatives about your business. A repeat customer actually becomes a walking, breathing advertising/marketing tool for your business. And what does it cost you? Whatever it takes to make them satisfied and happy.

In reality, it can cost you very little. Here are some tips to keep customers satisfied:

1. Always wear a smile and be friendly. Customers don't like to do business with grumpy and rude people. Rude? What is rude? Rude is not greeting a customer with a friendly smile and warm words. Rude is ignoring customers when they walk into your shop. Rude is working your crossword puzzle rather than assisting your customers. Do you get the picture?

2. Respect your customers. Customers don't owe you their business, you earn it. You need to respect the fact they have chosen to do business with you. Show your respect by being courteous and helpful.

3. When something goes wrong, make it right. We live in an imperfect world. Things break, things go wrong, it happens and you cannot change that. When a customer has a problem, this is your opportunity to really shine. Make it right, fix it or replace it and do it with a BIG smile! More customers are lost to another business because when something went wrong, the business owner failed to keep the customer satisfied. When a customer has a problem, this is when your customer service is either mere words or a real part of your business plan.

4. Don't hide from difficult situations. This is closely related to #3 and many business people fail miserably in this catagory. Learn to use your imagination when dealing with difficult customers and situations. Sometimes, I will say to a customer who has had a problem and is being difficult, "I want to be fair, tell me, what would you consider to be a fair remedy?" Often, they will suggest a remedy that is more equitable than you had imagined.

5. Let your customers know you appreciate them. Saying 'Thank you' isn't enough, especially if its half hearted and you don't look your customer in the eyes when you say it. Can you imagine telling your spouse you love them, as they are turning away and its mumbled, barely audible, as well? How believable is that? Yet, everyday, business owners and their clerks are doing this. Their customers make a purchase and just as they are about to walk away, the clerk, as a second thought, mumbles, "Thank you". The customer should "feel" your appreciation the moment they come in contact with you. The smile on your face, the tone of your voice, the body expressions you use will communicate to your customer whether you appreciate them or not.

Remember, business transactions rest on the foundation of relationship. Repeat customers return because you have begun to build a relationship with them. Do not let one person leave your shop a stranger! Get their name and use it, make sure they feel your appreciation and respect. They'll be back.

Referral Customers

What is a referral customer? This is the person who comes to your business because one of your existing customers has recommended they do business with you based upon the fact they are satisfied and trust you as a business person.

This is perhaps the easiest person to convert to a customer of your business. Why? Because they already trust you based upon another person's trust.

The key to referral business is to ask your repeat customers to refer you to their friends and business associates. If you are giving good service and have a good product at a fair price, your existing customers will be happy to refer you to others. All you have to do is take the initiative and ask them to. This can be done in a variety of ways. Let me suggest a few to you.

1. Simply ask your customer this, "What is the name of a business associate or friend who would benefit from my service?"

Notice I did not ask this question in a way that could be answered with a "yes" or "no". In order to answer, they must give me a name. Most people want to avoid confrontation, so they will take the easy path and give you a name. You should only use this technique with a customer you know well as it is would be forward to ask a stranger.

2. After the sale is complete, hand your customer two or more business cards. As they are taking them from you, say, "Please give my card to a friend or associate, ok?"

I've never been refused using this technique.

This is perhaps one of the easiest ways to ask for a referral. Almost all people keep business cards that are given to them. You should have an ample supply of them on hand and everyone who uses your service should receive one EVERY time they come into your shop. Why? Because business cards are one of the most effective and least expensive ways to market your service or business. They are like miniture billboards that fit into the pocket or wallet.

Once you have converted a referral into a customer, repeat the process of asking the new customer for referrals to their friends, relatives and associates. This will provide you with a never ending "flow" of new customers from your current customers.

Conclusion

Always keep your customers in mind, teach yourself to think like them, keeping the "benefits" at the front of all your marketing. Create a never-ending cycle of New, Repeat and Referral customers flowing into your business. Make it your top priority to keep your customers satisfied and happy, thereby insuring success for your business.

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This is an excerpt from "Wisdom of the Entrepreneur" by David Tinney. No reproduction of this article is permitted in any form without the express written consent of David Tinney.

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