Know Your Customer - Ep 11

Most small businesses I have come across want to sell too many things to too many people in terms of from a marketing point of view. Now who you are willing to sell to versus who you want to market to, can be two different things. So it's really critical that you know who your ideal customer is.

Marius: 00:00 Kyle, good afternoon.

Kyle: 00:03 Good afternoon Marius.

Marius: 00:05 Thank you for joining us again. We’re starting off a new series of talks today and I’m going to start off with that one word that says a lot, but isn't respected all the time and that is the client and where he fits in into your brand. Can you tell us a bit more about that?

Kyle: 00:23 Yes we're talking about the most common mistakes I see businesses make. I'm not going to say small businesses because I’ve honestly sat in rooms with CEOs of rather big businesses and they make very similar mistakes. So, it’s not really a size thing. The main thing is to know your customer and if I advise a client on where they should spend most of their money, it’s not just in terms of their marketing but, in the developing of their  brand overall is knowing your customer. If you don't know who you're talking to and you don't know who you're servicing in detail, it's really difficult to do anything that’s meaningful within the marketplace nowadays.

Marius: 01:04 Kyle, I’ve got this idea in my head about being a faceless client. Nobody knows me and you can’t even remember my name. And I'm talking specifically about the big stores, these huge ones, I’m not going to name names but, I just feel that I’m not even a  number, I’m just an individual walking in there and whether I should go there or not it doesn’t really matter. Is it important that the business owner, the business itself knows who I am?

Kyle: 01:36 I I think obviously it's critical they know who you are in as much detail as what is practical. If you're managing the shop around the corner and you're in that business day-to-day then it would be easy to know who your customer is because you’re physically there and you're seeing the guy who’s walking in there. If you’re wanting to know, we're talking to various people that want to build a brand, they're typically looking at expanding their business now that's where it really becomes tricky because then you have to engender this culture whereby which the people that are servicing the customers know your customers and then feed that information back to you in the right way so this is typically a real challenge, I’d say a challenge in two different ways. So, first of all for small people, it's in really knowing who, what I call, your ideal customer is. So if I talk to most small businesses they want to sell too many things to too many people in terms of a marketing point of view. Now you who are willing to sell to versus who you want to market to, can be two different things. So it's really critical that you know who your ideal customer is. How do you know who your ideal customer is? Well you fundamentally look at the products and services that you offer. What is the person's profile that needs those the most. So if it’s hobbies, lifestyle or types of businesses if you’re in the B2B space. Then you look at the kind of person in terms of their emotions, their value and how they look at life that so that you know how you're going to target them and you’re going to market to them. If I'm selling, let me use an easy example,  if I’m selling outdoor sporting gear, I know that my ideal person is someone that likes to go camping, likes to go hiking and like to take walks around outside. So there values will typically be quite concerned about the environment, they will typically not really like the urban lifestyle so they're looking to escape it and that’s why they go out and do all these things. These are all the things that I would kind of figure out based on knowing who they are and focusing on who are.

Sure you’re going to get a guy who doesn't live that lifestyle but they want a nice warm jacket and you’re going to sell them one and that's not a problem but, that doesn't mean you target that person with your marketing. Then on the bigger side is actually just understanding your customer and the bigger your business gets the distance and this is what’s scary for many small businesses, the distance between you and your customer also grows. And I find that the danger there is being totally disconnected with the coalface of your business and not knowing your customers so it’s really critical for you to put in place the processes and they’re not that difficult nowadays, there are technologies that you can put in place where you start to know your customer better really well. So that I would say is the main thing with the customer. The customer is the first port of call when it comes to any decision within your business it should be the customer. And marketing is particularly critical because if you don't know who you're talking to, everything else in your marketing falls apart.

Marius: 04:58 Kyle yeah it does make sense and I’d like to pop in a question and that is are the types of clients that you get and where they come from, do they usually differ from the platteland like here in Middelburg, Witbank and Grobblersdal and those places and the ones that you get in the bigger cities like Gauteng or Cape Town.

Kyle: 05:19 I think that the type of clients that we service are based on their geographic location, so sometimes your geographic location can change your mindset and your outlook so for us we focus on the customers or the clients that we service are typically people that have a very strong vision for their business that they want to take forward. So if you take our top five clients, three of them are what we call brand builders or they could grow their brand and they’re typically second or third generation within family owned businesses a very typical profile for us, second or third generation within family owned business. Some family relations started the business. So oom (uncle) so-and-so started baking pies and they’re really great pies and we've been running the corner pie shop for the last 20 years. And then the nephew comes up to the business works with his uncle and he sees that these pies are great and I can see his vision of putting this corner shop on every corner in every town in South Africa. That is our typical client profile, it's those type of people and some of our clients grew up on a farm and because they’ve lived the lifestyle that was related to their brand which makes them really great. The one client of ours, he grew up in his mom’s restaurant, from when he was twelve years old he was working in the kitchen, servicing customers in the front. So he knows that business back to front. He had the advantage and the privilege of proper education and all that kind of stuff so he’s able to take the myriad of those two and then grow the business. So that’s who our customer is, it’s someone that is risk taking, calculated risk taking, it is someone that has a vision and wants to go forward. So we try and spend as much time as possible understanding our clients as much as possible so that when we're engaging with potential new client’s we know which profile they fit in best because that helps us in terms of how we sell to them best.

Marius: 07:23 It makes sense even going back to my first question. The reason I’m asking whether the business from the clients on the Platteland change when they go to a bigger cities from a personal experience, you’d get a hardware or outdoor living store which is supposed to be exactly the same as the one the one that you in Menlyn Mall. But when you go to the Platteland and they’ve all these specials going on, it happens from time to time that the guys from behind the teller will say that sorry we don’t stock that as we don’t have a market in the Platteland for this, it would be better if you can go to Menlyn and get it there. Or perhaps we can order from there. That makes a difference in terms of it doesn’t matter whether we’re in Middelburg or not it comes to a stage where I should be able to get it to you as well. Then you’ll often move along. I’m not saying that they have to be a one stop shop but if you advertise these things then I would expect that it’s available in Middelburg and more often than not I get shoved around a bit and that’s the way that I feel.

Kyle: 08:34 Yes for sure and I think I think that’s where brands have to be critical in making sure that your marketing and the customer experience match up. And knowing your customer is critical in that because you should know your customer in detail by region. So for example let’s take the brand Starbucks, it’s an easy example because there are a lot of sources, you can do you research online yourself. So what Starbucks do before they go into a market is they research the coffee culture of that market. Before they enter it, so they go figure out how do people drink their coffee, where do people drink their coffee most often and how does it fit within their lifestyle and then they cater their restaurant in that market as best as possible. Anywhere up to 30% of their menu will be localised. The way that they structure the restaurant will be different from market to market. In America it’s very drive thru orientated, In the midwest within the cities they’re more sit down, free Wi-Fi, those kinds of things so they’re changing by market and by region. I think where South African brands, generally speaking, we haven’t grown up in that respect, we don’t cater a brand for a region right. We don't think that well okay, the guys in Middelburg and Witbank like more sausage on their pizza so we’ll put more sausage on the pizza so that they like it more. so I think that's why I might harp on about it because in South Africa we’ve become lazy with it. We don't listen to our customers enough and don't respond to them enough. And then we put a national marketing campaign together and tell people about great stuff and then it’s not available in all our stores that’s really poor brand communication.

Marius: 10:23 In terms of normal client service as well and yet again I’m going to tell you about an example from Middelburg. The big M I’m not going to say the name. If you go to Pretoria somewhere and you go to the drive thru, you order, you pay, you collect and then you move along and all those things happen in succession and it takes about 3-5 minutes at the most. As soon as you land in Middelburg that service delivery goes down the drain immediately. Out of personal experience it takes me from where I go in and stop and place the order until I get the food at the end it takes anything between 11-20 minutes and then it’s not even a busy morning. So service in terms of what you say you’ll do, is it important in terms of when you’re growing your business?

Kyle: 11:19 Well, we’ve spoken about this before and the critical thing when you’re expanding your business is it retaining consistency. So when you’ve got the one pie shop and you've got the bakery right behind the shop and your response time to see that we’re running out of steak and kidney pie is five minutes because you can just walk out onto the floor and just see how quickly they’re selling to when your factory and your restaurant are hundreds of kilometers apart then your reaction time might be 5 days if you don’t manage it properly. Understanding the specific example that you're talking about I would imagine it’s not just a service scenario because I know the brand pretty well and I think that they focus a lot on their culture within their company quite a bit and even though I don't agree with the product from a service point of view I think that they do, do a lot of good work with that. I would imagine it's more of a case that they haven't properly got there distribution in place and that they’re not stocking the restaurants adequately with the right stuff. The majority of their product is pre-made before it gets to their restaurant. So never the less you as a customer don't care about those things it’s about delivering to the promise that you've made. And I think that once again within the South African context you haven't grown up enough and I think the job of the customer is you have a job in this and that's to complain because there will be competition that will do it, it’s the nature of economics.

There will be a competitor that will come up and maybe there will be a Middelburg brand or a Witbank brand that will come out and say you know what, I'm tired the way that you guys service customers I'm going to come up with a way and they're going to have a very great culture around servicing a customer which we can package into a brand and I'm sure that people will want that. I can tell you that now that there are other brands within our town for example, we're at least spoilt for a choice in the sense of that there will be maybe up to three or four branches of a given brand. But I know that of l those three you're going to go to that one if you want your chicken or your hamburger quickly but, if you go to the other three you're going to be sitting in the drive through for at least half an hour. So just because you're in the Platteland it doesn't mean the service is much worse than in the city, I promise you the city has also got a lot of bad service.

Marius: 13:42 You should visit us sometime and come and experience this for yourself. But having said that with regard to the economic landscape that we’re entering. Yesterday evening the fuel increases came into effect and it’s just getting bad. The fact that I know this or the business owners knows this and like you said some people are spoilt for choice. Don’t you think that’s a bit of a wake up call in the time that we live in, that there are choices and if I don’t do what it is that I said I would do, I am going to fall out of the packet completely because I don’t know the clients anymore and not by name, I don’t know what’s going on. Then I can’t expect my business to grow or even survive.

Kyle: 14:32 100%. The thing is that as soon as you stop caring about your customers is the day that your business dies. It might not physically be dead yet but that’s when it starts dying. And I think that whether economic times are good or bad those have different challenges for a brand within them. When they're good and you're used to competing on price but your quality or your services is just not quite up to scratch then your competitors are railroading you. If you're in a low economic time and again your service and your quality are not up to the usual standard that you used to maintaining, then all of a sudden then your prices are maybe a bit more expensive than the guy across the road, them I'm going to say well his service isn’t the greatest but neither is yours and his price is better, so I'm going to go and see him. I think it's so critical for brands to know their customers and start to understand their customers buying habits, when do they buy, how do they buy. I mean it's no coincidence that Steers’ main promotion is Wacky Wednesday and Steers is always busy on a Wednesday because of Wacky Wednesday. It’s because they went and looked at the worst sales day of the week, and they saw that it was Wednesdays. Now that’s a very simple metric that you can pull from your point of sale software that will tell you you know you don't even have to know who's buying to do that. I'm telling you now that they’re clients that if I walked into their store and I asked them which day of the week is your best sales day they’ll put their thumb on their mouth and go well a Tuesday feels really busy so it must be a Tuesday. Then you go and you pull the data and see that they are very busy because they do a lot of transactions but, on a Thursday they do more sales they do less transactions but people buy more, ha! That's where you've got to start understanding your customer. There’s a reason that they’re not allowed to do it anymore. I think the reason that the likes of McDonald's used to say can I up size that for you is because they know that you're more likely to add five bucks to your order and get a much bigger token of chips which costs them one Rand to do and they’re making you spend five so work out the profit. That’s all from understanding the customer all these things are from companies that understand the customer.

Wal-Mart famously they wanted to add a billion dollars in sales revenue, worked out that in their market they'd have to make one dollar sale to everyone so everyone that came in would have to spend just one more dollar to do that. That again is because they know their data, they know their customers. They were the first people to put chocolate bars by the checkout till. So that’s what I would say to business owners, if you know your customer and you know how they’re buying and where they’re buying. Even in a tough economic time you can make more money because you can look at something that they need and give it to them. I know for example there’s a garage in our local community that has a loyalty card. Every fifth time you fill up your tank you get a free car wash. Now I think that’s brilliant because if you own a petrol station I can’t change the price of petrol because it’s regulated. I can make the core service better but, to be honest that’s not a massive differentiator because most people are going to fill up at a place that’s convenient unless I give them a real reason to come and most people will want a free car wash. So things like that, know your customer, know what they need, that kind of thing. It’s not as complicated as what people often think.

Marius: 18:09  Kyle just as a last thought and I’m going to ask you a bit of advice for young anderman (other man) in the street. If you know your customer, you get to know their patterns and their habits and what not. But you as the business owner surely cannot be the only individual or person in your business big or small that can understand this and actually implement this on a minute by minute basis. So if you were the owner of a business like that you would tell us this afternoon about the rest of the staff listening? What should they do in terms of getting to know the habits and all about the customer or the client.

Kyle: 18:53 Well. The number one thing is that you have to create a culture of customer service. You have to create that as an ingrained culture of your business. So if I put on the Springbok Jersey, I follow some guys on Instagram and when one of the guys got his first cap they get a thing that says welcome to the Springboks, these are our values. This is how we treat each other how we do things etc. Every company big or small needs that. Every employee that you hire needs to comply with the values and within your values that should be talking about the customer, some of them or part of them. If you've got that then you've got the foundation for that so then everyone’s going to start to take responsibility. Then you can start to look at how do I implement a process of taking the front of house of my business, whatever that is and forcing that into the back of the house. For example, I’ve got a client now, where they over time, one of their competitive advantages within their space is free delivery in industrial type items and organising a truck to come fetch these really heavy things is a mission and most of their other competitors charge for it, that becomes a value add for them. But the problem was that became economically unsustainable. Because what would happen was that the client who was ordering ten thousand Rands worth of equipment great, no problem they’ll deliver for free the next day they’d make an order of five hundred rand, now it's a big problem to deliver that within the same timeframe. So what we're assisting them to do, what they're doing at the moment is coming up with a delivery policy. So if you want a free delivery no problem you've got to place your order by this day and it will be delivered on that day because we go to this area on that day. But if you want it in an emergency and it's all below the minimum order level then we charge you a small fee. Now, that is a way of retaining the customer and making it economically sustainable for the business.

So that’s where I say you’ve got the front of the business talking to the back of the business in a proper way that makes a sustainable solution. Because you can't go out and service your customer and lose money, that's fundamentally not sustainable for anyone. That’s not what I'm telling anyone but, the thing is at the end of the day I've never sat in a conversation where there is a customer service problem and then you sit with the operations of the business and they say they have a problem and there isn’t actually a solution. More often than not it's a cultural problem where one side doesn’t want to talk to the other side. When you overcome that within your business so when you get that culture right and you get people talking properly and understanding that everyone, whether you’re physically making the pastry of the pie or you're in the front ringing the till and laughing with the customer you're all reliant on the customer. If a customer goes away your job goes away and the business goes away because then everyone has to grow up and recognise that.

Marius: :21:56 But Kyle does every business in your experience with this actually take this to heart and take this very serious. I had a personal thing once where I complained to the manager of a certain food store about something and I was promised an investigation into the matter within fifteen minutes and fifteen minutes turned into three and a half hours. By that time when I phoned again I had to learn that the morning shift manager had actually left two hours ago.

Kyle: 22:27 If I were the client I would definitely dismiss the brand for sure. The thing is Marius in my estimation do all companies do this properly? No they don’t. Do companies that want to be around in the next 50 years need to do that? Yes. Obviously things filtered down to smaller business is slower. But I'm going to say that the businesses that last, whether the economy is well or not well, in the tank at the bottom, is the ones that stay true to customer service. If you have the values in places within your business the customer service is correct and someone drops the ball you should get your HR people pulled in and put in the proper process put in place to fire those people. What we do when we consult on culture is we draw up the values first but, when we’re drawing up the values, we try and make them actionable from the onset And we’re going to say within that context let’s say with servicing the customer telling them something. How do you apply those values and then you make actual actionable key performance indicators that say that, and live up to that, then that’s a performance issue and that you can fire them for. One of the biggest growing brands in world is Amazon they’re literally taking over the retail world globally. And you ask, Jeff Bezos, why is that? And he says, I got one trick is just this one trick, The customer is everything. We make everything about the customer. And that's why they've gone from just selling books online to selling pretty much everything. If there’s an answer to your question then that’s it.

Marius: 24:01 Kyle next time on the next segment we’re going to focus a bit on marketing but not the marketing that we usually see, there’s a bit of a philosophy behind marketing, just a quick glance at what the listeners can look forward to.

Kyle: 24:15 I think this is the second most common mistake I see with marketing and that's when customers or clients think that they need to make a huge focus on marketing when they need sales right now. I need sales right now, let’s get a campaign up right now. I can tell you it is the worst strategy and you fundamentally are in that situation because you have made that the habit but we’ll talk about it more next time.

Marius: 24:42 So much to look forward to, Kyle Rolfe Brand Engineer at Idea Power. Kyle just before we say goodbye, your contact details please.

Kyle: 24:51 Yes you can get me on our website www.ideapower.co.za. Or people can call me directly on my mobile number that’s 082 824 0077.

Marius: 25:01 Kyle thanks very much, we’re looking forward to talking to you next week again. Thank you for lovely advice that’s come to the Platteland. I’ll talk to you very soon.

Kyle: 26:05 Talk to you soon, cheers.

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