Establish Your Goals & The Customers You Want
Every company has the same basic goals, whether you are in e-commerce, a retail store, or selling a service. Such principles as converting traffic into sales, increasing sales, decreasing marketing expenses, keeping your customers happy, and staying ahead of the competition are generally the basic goals of organizations.
You need to decide what the purpose and objectives for your company are, and set goals to support that purpose.
In order for any business to be a success, you need to decide the amount of revenue you want to generate, how much you need to sell, what type of customers you want to attract, how you are going to attract and keep those customers, how you will measure the success of your goals, and how you can improve/modify your goals to encourage continued growth.
Most importantly, you need to focus on your customers. Without them you wouldn't be in business.
Sounds easy enough. But many companies tend to focus their efforts on what they THINK their customers want, rather than listening to their customers to find out what they're actually looking for and examining how they approach the sales process.
There are various methods to finding out who your customers really are. You can ask them to fill out a survey in your store or online, track where they go throughout your website using analytics software to confirm the information or products they are most interested in, conduct focus groups, talk to your sales team, or simply listen to what they're saying rather than merely relying on typical sales techniques.
"The amateur salesman sells products; the professional sells solutions to needs and problems. It's a totally different approach. The professional learns how to diagnose, how to understand. He also learns how to relate people's needs to his products and services. And, he has to have the integrity to say, "My product or service will not meet that need if it will not." - Stephen R. Covey, from the book 'The 7 Habits of Highly Effective People'.
Once you figure out who your customers are, you need to decide which to target. There are two general types of customers - transactional and relational.
Transactional shoppers think short-term. They're only concerned with today's transaction. They enjoy the process of shopping, negotiating and are happy with themselves when they find the lowest price possible. They consider themselves to be the expert. Their fear is paying more than they should. The transactional customer is willing to spend a lot of time investigating. Every transaction hinges on the price. They won't come to you next time unless the price is the lowest.
Relational customers think long-term. They do not enjoy comparison shopping or negotiating. They fear only making a poor decision. They hope to find an expert they can trust, and service is an important factor. They consider their time shopping to be part of the purchase price. If you build trust with a relational shopper, they will likely become a repeat customer.
Therefore, transactional shoppers represent a greater share of overall store traffic than of the actual sales or gross profits, because they tend to visit a greater number of stores in search of the lowest price. Consequently, transactional shoppers represent lower closing ratios, lower average sales and smaller profit margins.
On the other hand, relational shoppers represent a smaller share of store traffic, but a larger share of sales, higher closing ratios and higher profit margins.
It's worth considering how many advertising dollars you spend reaching the transactional customers with 'big sale this weekend' or '50% off summer blowout' messages, versus how many relational customers you gain through marketing messages that show the customer how you can benefit their lives in the long-term.
Think about it for a minute. You own an office supply store and have a big sale on calculators this weekend. High traffic numbers of people visit your store. Most will leave with having purchased a calculator, but how many of those people will purchase something else while they're in your store? How many will return to your store the next time they need office supplies if there's not a sale on the item they're looking for? How much did you spend on advertising the 'big sale' versus the revenue generated on calculators that had a low margin by being on sale?
Now, if you advertise the services you offer that make you stand out from your competitors - such as an excellent exchange policy, or an extended warranty on all your electronics, or a delivery service, and items that will make people's lives easier in the long-run - you may get less customers coming through your doors that weekend, but what margins will you be making when they do purchase products? How many other items will they buy while they are in your store? Will they come directly to you for office supplies knowing they will receive great service and leave with peace of mind?
In some cases it's good to reach both types of customers. Other times it is best to reach one or the other. People can fit into one extreme or somewhere in-between.
In this article we have covered how to set goals and choose the type of customers you want to target. In Capture Your Customers' Attention we discuss how to effectively reach your customers.
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