Explore ways to train your customers

 

BY RICH SCHMITT

Management specialist

 

In one of my most recent adventures in consulting, I needed to travel from one assignment directly to another assignment. As often seems to be the case, I was running late but, since I was flying out of a nice smaller airport, I knew I could move through the travel maze that all of us travel-rats must traverse, and get to the gate in plenty of time.

 

The part that I hadn’t anticipated was that the airline, for their own convenience, shut down its ticket counter and kiosks 30 minutes prior to flight time. (I think I was there about 26 minutes before flight time.) So as the phrase goes, I was sol — Sadly Outta Luck. (I won’t give you the airline’s name but I will say that in my opinion, the last part of their name should be changed from “can” to “can’t” or possibly “won’t.”

 

Further, as I worked to quickly find a way out of my problem, the only people who were available and tried to help were from another airline that I won’t name but I will tell you that their name begins with “Southwest.” Frankly, there was probably some note in small type in the confirmation document that I received telling me to be there early but I have not verified that fact.

 

I wrongly assumed that it was like the other advisories telling me to be at the airport two hours before flight time. In the end, I spend a night in the wrong town and had to rearrange the remainder of my trip. When I mentioned it to an airline employee the response was basically a polite, “Get here earlier in the future.”

 

I didn’t like the response, but if I had described the situation to my family, they would have responded with our family’s copyrighted response: “yodf”, which stands for “Your Own Darn Fault.” We use this as our standard response to any situation where a set of stupid actions lead to a predictably undesirable outcome. (For those of you with teenagers or offspring that might one-day become teenagers, you may want to keep this phrase handy.)

 

The airline’s standard response was designed to “train” me to get to their flights earlier. Instead the whole process trained me to, whenever humanly possible, use another airline. The other airline’s help trained me to use them, whenever humanly possible, because, when the chips are down, they are going to try to help me — even when another airline or I created the problem.

 

So let’s talk about customer training in our industry. There are lots of kinds of training that wholesalers can provide to their trade customers. 

 

• Product training — Of course, trade customers expect their wholesalers to provide product training.  This is one of the highest-ranked services that is expected by trade customers. They expect their wholesaler to train them about the products, how to install and service the products and, ideally, how to sell the product.
• Business training — Most trade customers don’t expect wholesalers to provide training related to operating a contracting business. So some of the best wholesaler/contractor relationships have been developed when the wholesaler provides training and recommendations that help the contractor to improve his business’ operation. We have observed that some contractors will use and appreciate wholesalers who offer business training, software tools and even handheld devices that help the contractor do a better job of running their business.

 

Now I want to describe some of the less obvious “training” that wholesalers provide to their trade customers. There are two training methods that are often employed in training animals of any species:

 

• Reward — Where the right behaviors result in something good happening

• Punishment – Where the wrong behaviors result in something bad happening.

 

Price objection training

 

In some instances, we actually train our trade customers to concoct price objections. A group of ways that we do it:

 

• Dropping the price whenever a customer simply asks for a price. Many wholesalers are so insecure about their computer pricing that the innocent question, “How much is it?” results in a defensive price concession. Sometimes the contractor isn’t even inferring that he is comparing your pricing against the competition — he just needs to know the price so he can quote the job. Since the customer gets rewarded for asking what his price is, we should expect him to ask for every product’s price…forever.
• Responding to every pricing objection with a price reduction . When every objection is answered with a price reduction, the customer is trained to continue his objections until the wholesaler finally says no.  Unfortunately, some wholesalers don’t say no until the price has reached an obscenely low gross margin with a price that is well below what is being offered by other wholesalers in the market. The solution is to have market-based pricing that your people know is fair and competitive. Knowing your price is fair allows them to say no before the profits are completely gone.
• Offering ridiculous computer pricing when the customer asks for a price. Sometimes the first problem results from the price-shock that can happen when the customer is given an unmanaged price. (By unmanaged, I mean that the product price is embarrassingly high or that the customer was not properly configured in the computer.) In either case, when the customer hears the list price for a particular item, he will probably object to or challenge the price. Since that item might be one of his “benchmark” products (products that he uses for price comparisons with other wholesalers), you may have just trained him to distrust all of your pricing. This results in ongoing relentless price objections.

 

Price acceptance training

 

In other instances, we actually train our trade customers to accept our pricing by presenting competitive computer pricing when the customer asks for a price. By offering a properly managed, market-based, competitive price to the customer, you decrease the odds that the customer will object to the price. This is especially true of pricing for benchmark products. When the customer hears a price at or below the market price he was expecting, you have trained him to trust your pricing.  While some contractors’ dna forces them to object to every price, proper pricing and not dropping the price just because they asked (as described above) can improve your margins.

 

Stocking out of ‘Never Be Out Of’ items

 

When you routinely stock out of bread and butter items, it trains your customers to make their first stop at a competitor’s counter. They just don’t think they should have to call ahead to see if you are out of closet-bolts. On the other hand, when they can count on you to have their normal day-to-day products, you train them to trust and use your counter.

 

Messing up deliveries

 

If you are not reliable, you train customers to order from a more-reliable competitor.

 

Creating problems for customers

 

Whenever you create a problem for a customer, whether it’s your fault or his fault (like my airline experience) you are probably training him to do business elsewhere, if at all possible. If contractors get “punished” for buying from you, they are quick to find a different wholesaler.

 

Helping customers with problems

 

Whenever you step up and help solve a problem, you are training your customer to buy from you. (If you find that customers are only coming to you with their problems and giving the easy ones to a competitor, some retraining is in order.  Often a simple discussion with the contractor will resolve the issue, saying that you can only continue to handle the high-cost (for the wholesaler), extraordinary events when you are also getting the customer’s everyday normal business.)

 

Lecturing or criticizing customers

 

There is a big difference between friendly helpful coaching and lecturing or criticizing. When your team denigrates customers, those customers often look for a different supplier. I have heard this happen in a variety of ways: 

 

• “This must be the third time that I explained this to you.”
• “What did you forget this time? This is the third time you’ve been in today.”
• “Wow, from the smell, you must be cleaning sewer lines today.”
• “You just bought one of these yesterday.  Did you break that one?”
• “Why do you need that?”  Implying that he doesn’t know what he is doing.

 

Substandard websites and storefronts

 

When you have a first-generation — aka crude website — you are training your customers to use another wholesaler’s website. When a contractor can’t find a product in your online store or that store is slow or difficult, you are training them to look elsewhere. For a reprint about planning your website and storefront, e-mail me at rich@go-spi.com.

 

Please understand that I do not intend to use the “customer training” concept in a negative or demeaning light. That is never the intent. I do know that all humans respond to positive and negative feedback and that they are powerful tools in modifying a person’s mode of operation. The key is to be very aware of the messages that we are sending to our customers in the way we conduct business. You want to send messages and conduct business in ways that train customers to buy from you on a regular basis and stop sending messages and doing things that train customers to buy from your competition.

 

Regarding e-mail requests: I get many e-mails from readers. I appreciate the feedback and try to respond personally to every e-mail. Over the past several months I have become aware of several e-mails that were sent to me and somehow lost or that were dropped by our spam filter. I normally try to respond to e-mails is less than a week although my travel schedule may occasionally increase the response time. If you have requested reprints and I have not responded, I apologize and ask that you resubmit the request to me rich@go-spi.com or go to our website, www.go-spi.com, and click on the Reprint Requests entry.