- The digital bell - for when customers seek sexy, high tech, virtual contact, while allowing Big Data manipulation and scratch-your-own-itch service;
- The analog bell - where customers go to satisfy their craving for that special sauce made from Main Street high touch AND slightly-less-sexy high tech. It tastes like this: “We’ll help you scratch your itch” customization; “Good to see you again, Mrs. Smith”; “Thank you for your business;” “Be sure to check out our mobile site.” “Follow us on Facebook.”
Archive for the 'Customer expectations' Category
Once upon a time, in a land far, far away – in Internet terms that’s about 10 years ago – a small business owner didn’t have to worry too much about macro-economics. Well, that was a nice trip down Memory Lane.
Today, Main Street business owners have to operate every day in their micro-economy, while keeping an eye on what’s happening at the macro level. Alas, macro-economics isn’t easy to get your head around when your highest priority on Monday morning is to cover payroll on Friday.
Here’s a handy macro-economy metaphor: the Barbell Effect. Essentially, this phenomenon occurs when natural forces – new technology, innovations, shifts in demographics and behavior, etc. – disrupts entrenched, legacy practices of an industry. The disruptive pressure squeezes industry players who fail to adapt causing them to contract into the bar. Those who adapt find their way to the bell ends, where there’s room to expand.
At the macro level, the barbell doesn’t exist prior to the disruptive pressure – it’s the result, not the cause. In the marketplace, the energy causing the disruption is customers empowered with new expectations. This will be on the test: When customers are empowered, businesses are disrupted and barbells are likely.
There have been many examples of the Barbell Effect – some small and local, and some even global. I read recently about a housing barbell in one city where units on the high and low ends – the bells – were selling well, while the ones in the middle – the bar – not so much. The American banking industry has experienced its own Barbell Effect this century. As big banks got bigger on one end of the barbell, community banks hung in there on the other end, while medium-sized banks experienced financial claustrophobia as the bar got thinner and thinner.
Right now, the Barbell Effect is creating an existential reaction that can literally be watched by Main Street small businesses from their front doors as no-longer-relevant retail giants are closing hundreds of stores at a breathtaking pace. Here are some numbers: As of this year, 200 Sears stores closing brings their numbers down 60% in the past 5 years, while K-Mart is shuttering over 100 locations. Macy’s is closing 100 stores, and JC Penney is projecting 300 store closings. And besides these big guys, many medium-size retailers are also making the acquaintance of the bar between the bells.
The pressure creating this retail barbell is arising from new and evolving customer expectations, which increasingly means higher adoption of e-commerce – online shopping/purchasing. But the new expectation isn’t about unique products, lower prices, or better service, it’s the most powerful relevance advantage in The Age of the Customer: saving time. Technological innovations and customer care practices – easier mobile shopping and electronic payment, plus free delivery and easy returns – are saving customers enough time to change their shopping behavior and create a barbell.
As we witness the disruption – if not the end – of traditional, big box retail, let’s remember the good news about the Barbell Effect: It has two fat ends – the bells. On one end of the retail barbell are disruptive companies like Amazon, Google, and any other purveyors of the online retail model. On the other end are small businesses that understand that the online, digital model cannot fulfill all of the expectations of their analog customers. Indeed, the current Barbell Effect is producing a customer experience vacuum that will be filled very profitably by small retailers who deliver the special sauce of the both/and business model: traditional, analog retail (High Touch), combined with online, digital capability (High Tech).
In my next column I’m going to reveal what it takes to maintain occupancy of the fat ends of the barbell, and why this current retail phenomenon is great news for small business CEOs who see the micro-impact of the macro-economy.
Write this on a rock … Blasingame’s Law of Business Love: “It’s okay to fall in love with what you do; it’s not okay to fall in love with how you do it.”
A while back, I needed to reach a friend who worked in the local office of a national company. Searching online, and yes, even the phone book, I found only a toll-free number that connected to an answering system for the entire company. That’s right – this business didn’t publish a number for the local office. And incredibly, the automated system did not offer an option to connect to any local branch or person. I’m not making this up!
Lesson 1: Don’t create barriers to customers. Even if you think you don’t have barriers, look anyway, because you might. Ask employees and customers to help you find them.
Undaunted, I finally acquired the local number (yes, they had one), but the person who answered said my friend, who was in sales, had been laid off. It turns out, this publicly-traded corporation was losing money, so in order for the CEO to impress Wall Street analysts, who influence the stock price, almost 2,000 employees across the company were told to hit the bricks. Never mind how valuable these employees were or if those cuts would hurt the company’s long-term performance; the quickest way to increase profits was to cut payroll.
Lesson 2: Performance goals are important for planning, but customers don’t always buy on your schedule. Don’t let short-term expense pressures cost you sales, and worse, long-term customer relationships.
I learned that my friend had been a top producer, but since he was the last one hired he was the first to go. He’s no longer a payroll drain on his former employer, but one of their competitors quickly snapped up this winner.
Lesson 3: In the 21st century, seniority doesn’t trump performance.
So what if this big business CEO had simply installed a phone system that made sure customers could connect to his local offices? The answer is that my friend and several hundred others may not have been fired. And who knows? By simply eliminating one customer barrier, this company might actually have needed to hire more salespeople to handle all the business that would not have gone elsewhere.
Lesson 4: How you run your business – including people, systems, technology and policies – is not more important than the fast-evolving expectations of prospects and customers.
By the way, that big business that taught us these valuable lessons is no longer in business. Big surprise.
Write this on a rock … Think you don’t have customer barriers? Neither did that big business CEO.