A Banking Story – The Ten Day Hold

grouchy receptionistI’ve just had an unpleasant experience with my bank.

Interesting. I called it “My” Bank. Why did I do that? Merely because its the institution I’ve used for several years despite having better places to go to, like Lainanvertaaja?

I remember why I chose this bank to begin with. I’d just moved to a new community to take a job with a company which required direct deposit of all payroll checks.

I chose this bank because it was directly across the street from my office.

Not because they offered free checking (they didn’t), or for the vast number of their ATMs (which they didn’t have in this community). I didn’t even choose them because they were “big enough to handle my needs but small enough to care.” The bank in question was owned by one of the biggest bank holding companies in the U.S., and since then they’ve been acquired by an even bigger company.

(Side question: “My” bank changed owners two years ago. Are they still mine? Probably. I haven’t noticed any significant changes other than the signage.)

Nope. All of the reasons banks put in their ads about why I should choose them meant nothing to me. I chose by location, and accepted everything which came with the package: the hours of operation, the fees, the interest rates… all of it. After I went into business for myself as a marketing consultant I opened a business account with the same bank.

Flash forward with me.

A couple of weeks ago, I, an otherwise satisfied customer, closed out a hier brokerage account and deposited the funds into “My” bank account. I hadn’t brought a deposit ticket with me, so I had to ask the teller for a blank deposit slip and to look up my checking account number.

I was told there would be a minimum ten day hold on this check, so that it could clear the issuing bank. Knowing this to be standard policy for many banks around the country, I merely nodded, took my deposit receipt, and left for my office.

On the eleventh day I called to ask about my deposit. I was told the hold on my check was for ten “business days.” Oh. Business days. OK. Because of the weekends, another four calendar days, I guess.

On the fifth day following, also known as the eleventh business day – called by most people the seventeenth day after – I checked my balance online and found the check had still not been credited to my account. I started looking for the bank’s phone number. It took far more effort than it should have to locate the national 800 number for the bank holding company.

I spoke to Rita in customer service. “Rita,” I asked, “what’s the point of requiring me to punch my account number into the phone, if you’re just going to ask me to repeat it when you come on the line?” Rita had no answer, other than their system couldn’t transfer the number with the call.

I asked that she explain why the funds from my former brokerage account with the best trading platform Australia has to offer, had not been credited to my checking account. Rita assured me that the hold up was the fault of the issuing bank. I politely suggested that wasn’t likely, but that I would follow up with the brokerage.

The brokerage house didn’t leave me on hold.

Nor did their system drop my account number when transferring me to a human in account service. Ron looked up the check, and assured me that it had cleared their bank three days after it had been issued (in other words, two days after I deposited the check).

Some serious Google searching for another few minutes and I finally located a number for the local branch, which I dialed. I got the branch manager’s voice mail, hit “zero,” and was transferred to the receptionist. After checking, she told me that my funds would be available the following day.

“Why are those funds not available now?” I wanted to know. I was told that until midnight, they wouldn’t know how much money they’d received in the transfer from the other bank. (No, I am not making this up). “You’re a bank. You don’t know how much money people are sending you?” I asked, incredulously. Again, I was told my funds would be available after midnight.

So, the following morning I logged on to the bank’s on-line banking service to find the deposit had been made into my business account, rather than my personal account. I assumed a trip to the branch was in order.

Picture this layout:

bank lobbyWalking through the door puts the tellers on the left, the office cubicles on the right, a waiting area with couches and coffee on the back wall, and the receptionist desk in the middle of the big open area.

I approached the receptionist, who was busy ignoring me and curtly answering questions on the phone. I recognized her voice (and attitude) from the day before. The receptionist explained even though the customer had personally brought a check to the bank yesterday morning, that didn’t immediately put funds into her account. Her deposit wasn’t counted until midnight, and the check she was attempting to cover had been presented for payment yesterday afternoon. (Again, I’m not making this up).

Finally, when she asked how she might help me, I dragged a chair from an adjacent desk and settled in. I showed her both checkbooks. I explained that the deposit had been made in the wrong account, and asked her to make it right.

As she silently whacked the keys on her terminal an older woman, using a cane to steady herself, walked to the desk and asked, “Miss, can you tell me how much longer it will be?” The receptionist stated in a cold, professional voice, “I’ve told them you’re out here.” The older woman said “We’ve been waiting forty minutes. My friend gave me a ride, and she has another appointment soon.”

Without making eye contact the receptionist said “I don’t know what to tell you,” and went back to ignoring the woman.

When my transfer was complete, and the new receipts printed, I left. The older woman was looking at her watch. The receptionist was avoiding eye contact with the gentleman who’d been waiting his turn to speak to her.

I’m trying to decide whether to call the branch manager.

On the one hand, if I was the manager and didn’t know of poor customer service, I’d appreciate having it pointed out. On the other hand, this woman’s desk is in full view (and earshot) of six teller windows and four loan officer cubicles. I suspect all of the other employees have seen this behavior regularly. If that’s the case, why doesn’t the manager already know?

Should I call? Do I care? Will I move my accounts?

Truthfully, I don’t believe that the next bank will be any different.

What’s the difference between Bank of America and Sun Bank? Between Wachovia and Chase? Between Fifth Third and Wells Fargo? Can anyone articulate even a slight difference?

I can’t, and I’m paid to find and exploit those differences.

Bank advertising is so homogeneous we could probably exchange logos and no one would notice. (Except maybe for WaMu. Their ads are much more memorable. They don’t offer anything their competitors don’t, however. In the end they only have more clever advertising).

We can’t find the differences because there aren’t any. They all keep the same hours, pay the same interest rates, charge the same interest rates, offer the same free checking, and have coffee in the lobby. They all have the same automated tellers and charge the same fees for using someone else’s automated teller. All are “big enough to serve me and small enough to care.”

I should hope so. Who’d do business with a bank that can’t even reach the minimum criteria for entering the game. Telling me that you’re just like everyone else in your industry effectively makes you invisible.

I suspect many people choose banks as I did: they pick the one on the closest corner. And if that is the case, the only way any bank will gain market share will be to build on more corners.

Of course, the capital outlay required for this strategy will severely cut into operational profit, and the shareholders will probably revolt.

If I’m right, people don’t change banks because they perceive any advantage in the new bank. They only change when they’re upset enough to refuse to do business with the current institution. I prefer cryptocurrencies as it is easier to deal with them. I have recently tried Crypto Trader and I like it. I believe I can earn some money using it. Advertising under these circumstances can only try to attract the attention of someone who’s getting ready to abandon her current bank.

That person is likely to choose the next bank based on location and convenience.

Isn’t it time for concierge banking?

Isn’t it time for someone to open a bank that caters to the needs, perhaps even to the whims of the customers? Wouldn’t you be willing to accept a lower interest rate on your savings in order to have a bank call and say “If you can get a deposit to us before midnight tonight, we won’t have to bounce this check?”

That only happens to me a couple of times a decade, but I’d be intensely loyal to a bank that cared that much about me.

Because when all of your competitors are pretty much the same, its not your advertising that drives market share. Its the way you do business.

I’ll be reinvesting the funds from my brokerage account. None of my investments will be in bank stocks.

And I still haven’t decided whether to call the branch manager about the receptionist. What’s your opinion? Should I bother?

Can massive amounts of advertising draw in more customers than service drives away? An important decision when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about matching the reality of your operation with the message you’re projecting? Drop Chuck a note at [email protected]. Or call him at 760-813-5474.

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The Biggest Waste in Advertising (a Case Study)

Shoppers Flow Downstream

Water FlowingJust as a river flows downhill from higher terrain, shoppers always flow from the smaller community to the larger.

Advertising in the bigger community to draw customers to your smaller community is as futile as trying to make the water in a river defy gravity.

Tom’s Letter

I was reminded of the effects of swimming against the current when I received this letter:

“I’ve owned a boat dealership for over 30 years. We are located 1.5 – 2.5 hours northwest of Chicago in an area of lakes where our best customers own a second home. How do I use radio to reach these people?Reed's Marine

A. They are primarily up here only on week-ends in the summer.

B. They live full-time in the greater Chicagoland area where radio advertising is too expensive for us.

C. We have local radio stations, but our customers can still tune in their favorite Chicago area stations.

Over the past few years, I’ve run a Reed’s Marine radio commercial three times a day, seven days a week from April thru August. I’ve used the two biggest stations in our county, so we are permeating our area. My hope was that I might be heard by my best prospects on a rare occasion, but I was primarily targeting all the people in my county who would eventually mention us when they come in contact with the tourist coming from Chicago on the week-ends.

Do you think “second-hand” radio advertising can have an actual effect … sort of like second-hand cigarette smoke?”

Tom Johnson, owner
Reed’s Marine

Second hand advertising?

Yes, it can have an amazing effect. Another name for it is “word of mouth.” It’s also known as your professional reputation, the sum of the experiences customers have had with you. An individual customer’s personal experience determines whether that individual customer will be a good source of word of mouth.

customer_evangelistsExceptional experiences turn shoppers into customer evangelists. These are people who can’t wait to rave to the world about your exceptional business. (Of course, give them a bad experience and they could just as easily become vigilante customers – also eager to tell the world about your business).

So whether you call it word of mouth or professional reputation, those personal experiences drive repeat business, referral business, and collectively drive first-time business. Yes, “second-hand radio advertising,” works. It’s also one of the requirements of business success.

But Tom actually asked two questions, didn’t he? The second, the unstated question, wasn’t about professional reputations, or customer experiences, or referral business.

Tom Wonders if He Can Make Customers Flow Uphill

He wants to know if his situation is different enough to justify advertising in Chicago.

It’s not.

Biggest Waste CalloutThe biggest waste of money in advertising happens when a business spends it’s budget, but didn’t invest enough to persuade anyone. Compare it to buying a ticket three-quarters of the way to Europe. You spent your money, but still didn’t arrive.

The first problem is the sheer size of the Chicago market. The number of people in Chicago who own homes in Delavan is going to be a tiny fraction of a tiny fraction of a tiny percentage of the population.

In order to reach that minuscule segment of the market, you’re forced to also address the rest of the Chicago audience. And Tom, you can’t afford enough repetition of your ad on Chicago radio stations to effectively persuade anyone.** Like the salmon using all of it’s physical resources swimming against the current, you’re going to expend your financial resources fighting the inclination of all of those radio listeners to shop in bigger communities.

There is a practical way, though, to pursue that tiny fraction of Chicago’s population.

Stop Using Mass Media

Start making personal contact with Chicago residents who own homes in Delavan. The good news is it’s easier, and less costly, to make that personal contact once they’ve already arrived.

  • In most communities you can find the names and addresses of all new homeowners at the courthouse (or wherever the deeds are recorded). These are highly-targeted potential customers. Consider a “Welcome to your new home” letter to those folks, and include a CD ROM of the e-book you offer on your web site: The Five Biggest Mistakes People Make When Buying A Boat. Perhaps you could make that letter a full package of “welcome” gifts. Be sure to keep testing different letters and keeping very careful records of your expenses and conversion rates. Whenever you determine that one works better, dump the old one.
  • Find locations that tourists frequently patronize… restaurants, gas stations, and local service businesses. Any possibilities for flyers? Display ads in those locations?
  • Find referral partners. Team up with other local businesses who’s reputations are as good as your own; non-competitors who share your customers. Exchange sales leads. Support one another, publicly and privately. Start with the realtors, motorcycle / ATV dealers, and sporting goods stores.
  • Consider a “boat out” on a weekday evening. Take some of your best-selling models out on the water and invite local folks (as well as any visitors in the area) to look and ride. Make it a party atmosphere. Tie in a local restaurant or caterer. Get some local artists to show off their work. Find some local musicians to perform. Most of those folks will participate for the publicity. Twist the arm of your Chaparral Boat representative to pick up any out-of-pocket costs.

These personal contact ideas are not replacements for your primary marketing plan, which will include local mass media. Any can be added to a good plan, however.

Reed’s Marine Strategy is Solid

Long term, twenty-one ads per week will be sufficient on most radio stations, provided that you’re targeting relational shoppers.

I’m assuming that your ads are customer focused.  You are personally involved in the writing of those ads, aren’t you? Please don’t leave it up to the local radio stations.

We already discussed the power of word of mouth. If your message isn’t worth repeating, it won’t be repeated.

A Few Additional Things to Consider

  • Maximize your local media impact with heavier schedules early in the season and heavier schedules on weekends throughout the season.
  • Purchase gift certificates for dinners, concert events, or movies. Offer them to your local radio stations as give-away items. “Be the 9th caller and win a family four-pack of movie tickets, courtesy of Reed’s Marine in Delavan.”
  • Consider billboards on the main roads into town. In some small communities, especially those with few roads into town, three or four boards can provide as much as a 100 showing.
  • Your web site is very well done. Crisp, clean, informative, and easy to navigate. I’d suggest that you add the free download of your e-book to the home page as well. (More companies should be following your lead in this area – its an excellent piece.)

Also consider making a link from your home page to the “Reed’s Marine Pledge To You” statement. You can’t go wrong telling customers what’s in it for them. Tell them early and often.

Most advertisers in a smaller communities can afford enough frequency in local newspaper or radio to persuade local shoppers to come do business. You’re already doing the things most businesses should be doing. Stick with your existing strategy, and when tempted to purchase advertising in Chicago, remember what happens to the Salmon. Don’t wear yourself out fighting the current.


* Please don’t confuse comments about marketers swimming against the current as a condemnation of any contrarian philosophy. Contrarians find opportunities in serving the existing needs of customers which other businesses are ignoring.

** There is one possible exception in which Chicago radio could pay off, but it’s a long shot.

Are there outdoor shows in the Chicago area sponsored by Chicago radio stations? Is the attendance at those shows such that you could justify your involvement?

Many of the stations will tie your involvement in the show to purchases of advertising packages. Your mission is to get the largest number of announcements with the financial investment they require. See if they’ll let you exchange prime time ads for overnight placement to increase frequency, then concentrate those between 4am – 6am, especially Friday and Saturday. Consider sponsoring Friday evening or Saturday traffic reports.

And remember, the primary value of this strategy is to get face-to-face with potential customers at the outdoor show. The radio schedule is the price of your participation.

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Ten Steps To Great Customer Service

Originally Published July 12, 2006
The scene is a national restaurant chain. I’m meeting a client for lunch. I notice that our hostess, who doesn’t appear to be much more than 19 or 20 is wearing a pin on her apron with the number “10” on it.

I must have looked a bit puzzled when I asked “Have you worked here for ten years?

She laughed and said, “No, this just means that I’ve been through our training course and know the ten steps to great customer service.”

Really,” I asked, “what are they?

First, you great the customer with a smile…” she said, her voice trailing off.

Then she laughed, and said “Well, I used to know them,” as she seated us.


What Were Those Ten Steps?

Our waitress informed me that her name was Thelma and she’d be our server today. I asked “Thelma, do you know the ten steps to great customer service?” Thelma said “Oh, sure…” and quickly listed three. She pondered for a minute before naming the fourth… and after a mighty struggle came up with a fifth.

I flagged down three other waitresses in the next 30 minutes, and none of them did any better.

When Thelma brought our check, she also handed me a scrap of paper on which she’d dutifully noted the ten steps, in order. She mentioned that it took a bit of effort to remember them all.

Michael LeBoeuf said it so well in his 1985 book, The Greatest Management Principle In The World: “Behavior that gets rewarded, gets repeated.” (And if you haven’t found time in the last two decades to read this elegantly simple concept, isn’t it time? Click the link and invest three and a half bucks in your personal management library).

Our restaurant chain thought that ten steps to great customer service were so important that they required all of their employees to learn them.

Those Ten Steps Slipped Out Of Consciousness

Unfortunately, it appears that as soon as all employees memorized the list, management thought their job was done. Employees saw no benefit in remembering the list, or applying it. Consequently, they didn’t bother to do so.

Don’t think this could happen in your company? Unless you’re constantly reminding your staff of the things you want them to convey to your customers, I can guarantee that it’s already happened in your company.

I’ve been conducting a small experiment. I’ve been calling businesses randomly at odd hours and asking whomever answers the phone why their company’s service or products are better.

Dare To Try It Yourself?

When the dispatcher picks up the phone with “Mary’s Pizza, how can I help you today?” ask “Why is Mary’s pizza better?

In the last week I’ve asked “Why is your coffee better?” “Why is the doctor you work for better?” “Why is your customer service better?” “Why are your puppies better?” “Why are your roses better?” “Why is your chili better?

I’ve made fourteen calls to businesses in my neighborhood. So far, nobody’s been prepared with an answer.

It’s a simple test. Only takes a few minutes. Doesn’t cost anything ‘except maybe a few pennies in long distance charges.

Call your own company. Call your competitors. Call businesses in other cities. Call businesses you’re curious about. Ask the question.

What Do You Hear When You Call Your Own Company?

And if you’re not hearing a clearly articulated point of competitive advantage, may I suggest that you have some work to do for more successful fishing for customers.

And if you’re not hearing a clearly articulated point of competitive advantage, may I suggest that you have some work to do for successful fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Need some help strategizing the best way to help your staff to articulate your values? Drop Chuck a note at [email protected] and start a conversation.  Or call him at 760-813-5474.

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Dear Doctor – How Do Your Patients Rate YOU?

Originally published December, 2007

Dear Doctor:

For a single, brief instant I was your patient.

I’m new in the community and needed to have my diabetic prescriptions renewed.

I didn’t mind that I had to wait five weeks for the first appointment. I like that your practice is that busy. It implies that you’re in demand.

I appreciated the reminder phone call yesterday, confirming the appointment and suggesting that I arrive 15 minutes early to handle any necessary paperwork.

Perhaps you remember that my appointment was for 10am. Since I didn’t know what the traffic would be like, or how difficult your office would be to find, I left for your office at 9am, and arrived at 9:30. After checking in and completing your new patient forms I sat patiently waiting to be called.

I wasn’t upset when 10am passed and no one had called my name.

I wasn’t really upset at 10:15.

By 10:30 I was becoming annoyed. I asked your receptionist if it was going to be much longer. Without even looking up she told me she didn’t know, but they’d call me as soon as they were ready for me.

By 10:45 I should have walked out, but I needed my prescriptions. I didn’t have five weeks left to start this process with another doctor.

I Waited

At 11:02 a nurse called my name. She weighed me, took my blood pressure, confirmed the meds I’m taking, and showed me to an exam room. She closed the door upon her exit, and I sat alone there until you finally walked in at 11:36.

Instead of making eye contact you looked at the chart, and introduced yourself. No apology. No recognition of my inconvenience. In fact, you didn’t look up at all until I asked what had caused you to be running 97 minutes behind on your first 120 minutes of operation.

As you looked into my ears and mouth you told me that you couldn’t anticipate how long each patient would need your attention.

I wondered why not? You’ve been in business for at least 90 days. It seems to me that tallying the number of patients you see, the number of hours you’re open, and dividing one by the other should get you in the ballpark.

Perhaps you recall, Doctor, indignantly telling me that you haven’t been able to take a lunch in the last two months? That you worked straight through your scheduled 90 minute mid-day break to take care of the patients waiting to see you?

If, in every one of the last 60 days it took an extra hour and a half to catch up on half a day’s appointments, then you obviously are scheduling them too close together. This accomplishes nothing but to really make your patients cranky.

Not as cranky as you appeared, though, when you handed me the scrip I’d come in for. (That was when I explained that by working through lunch you were only making my point).

And We Arrived at the Critical Moment

Do you remember when you angrily demanded to know if I understood how much it costs to have your staff standing around waiting on patients, and that you still had student loans to pay off?

That was the exact moment when our doctor/patient relationship ended.

Oh, you’re probably not aware of it. I took the sheet with your charges to the clerk and paid on my way out. But, the relationship has definitely ended. I decided that long before I arrived back at my office at 12:29, very angry to have wasted half a day to simply renew the prescriptions I’ve been taking for years.

You see, whether you realize it or not, you’re a consultant.

People hire you for the expert advice you give them when they have health care concerns. Many other people are consultants, too. Insurance agents, hair dressers, and Realtors come to mind.

They call people who purchase their services “customers,” while yours are known as “patients,” but it’s pretty much the same relationship.

I wouldn’t have waited an hour and a half beyond a firm appointment for any of them. I wouldn’t have expected them to wait on me were the tables turned. But with you and a great many of your colleagues, this is business as usual.

You Keep Your Productivity High by Insuring That Mine is Low

That, and your total disrespect for me as your customer are the reasons I won’t be back.

So, as I tell you goodbye, let me leave you with two thoughts:

1.Your accountant has been counting your inactive patient files as assets of your practice.

He’s kidding himself.

If he ever sat in your waiting room he’d understand why you have such a large percentage of inactive patients.

2.People like me, the well-paid executives who can afford your services, don’t normally make a scene as we leave.

We simply determine that you’re not worth the investment of any further time.

So, when you find yourself squeezed between managed care and deadbeat patients, remember that I’m in my peak earning years, my time is valuable to me, and I’d have gladly paid more for express service.

Remind yourself, too, that I am a great source of word-of-mouth. Unfortunately, in your case, it won’t be favorable. I will, however, get a massive amount of satisfaction repeating this story. I’ll be telling it for years. When you advertise your practice, how many gross ratings points will you have to purchase just to neutralize me?

One of these days one of your colleagues is going to figure this out. He’s going to appear on television with a simple message:

I’m Doctor Johnson, the business person’s doctor. I’m not one of the lower priced doctors in town – in fact, I’m probably one of the most expensive. But, if you’re accepted as my patient (and not everyone is) I promise you’ll never wait more than 15 minutes for your appointment. Come see me. Doctor Johnson, the business person’s doctor, at the corner of Main and Second Street for your convenience.

He’s going to make a fortune on people like me. Something to consider when you’re fishing for patients.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Need some help seeing your service from your customer’s point of view? Drop Chuck a note at [email protected] and start a conversation.  Or call him at 760-813-5474.

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Focus on Customer Value to Survive the Coming Shake Out

Out of Business Sign

Out of Business sign

There’s a shake out coming.

Historians will call this a period of consolidation, in which businesses are eliminated, or acquired through competition.  They will have had the benefit of time.

You and I will remember this as a time of small businesses going out of business.

If your company presently competes with 9 others, and there’s only enough business for six, three will close their doors, or sell out to a competitor.

Of the six remaining, two will barely keep the doors open, three will settle into a comfortable status quo, and one will thrive.

That one will understand how to deliver customer value.

Customers who grew up in times of plenty, loose credit, and purchases on a whim have mentally shifted to a time of considered purchases. They seem to be asking “Do we need it? What must we give up to get it? How good will it be?”

Changing consumer attitudes

Sales are off.  However, goods and services are still being purchased.  Automobiles break down regardless of the economy. Kids still outgrow shoes. Appliances still need repair.

But now every purchase gets considerably more deliberation.

This does not mean you need the lowest price. I promise, price is one of the less important factors in a buying decision.

Hundai Accent

Hundai Accent

Need proof? The Hyundai Accent, at $10,705, has the lowest MSRP in the country.  Do you drive one?  You don’t?  Humm.  There must be reasons other than price on which you based your purchase.

In fact, a 2010 J.D. Power study indicated that only 38 percent of buyers chose their car due to price, while 52 percent said their choice was due to the way they were treated on the lot.

And those 38 percent who focused on price?  You can understand why they said it was important.  When a shopper can’t see any difference between our offerings and those of our competitors it only makes sense to buy the less expensive of apparent equals.  Plus, out of all the factors which influence her decision, price is the easiest to understand.

But don’t believe she’s looking for cheap.  She’s not.  She’s looking for value. Simply stated, value is what the customer gets for what she pays.

Let’s illustrate with a couple of examples from the Great Depression.

Blue Plate Special

Blue Plate Special

Blue Plate Special

Running a neighborhood diner is an exercise in timing. Run out of banana cream pie before people stop asking for it, and you lose sales.  Prepare too many, and they spoil.  Few things are as depressing to an owner as calculating lost profitability awhile watching six slices go bad. During the depression, before refrigeration became cheap, the “use by” dates were much more critical.

And cooking up all of those things which might spoil if we don’t use them will only create more servings of foot to join those unsold pie slices. Unless…  Unless…

Unless we can increase demand for that particular dish.

Here’s an idea: let’s offer a good sized portion of wholesome food at a reduced price.  Customers won’t cares that the offer is for our own benefit. Most won’t care what we select for the entree, as long as its a genuine value to folks aware of every penny they’re spending.

The blue plate special was a strong value-based strategy which worked well 80 years ago. Could it work again today? I suspect, yes.

The Two Pants Suit

Men's Suit

Men’s Suit

This one is pure genius. A jacket and trousers (and sometimes vest) don’t make a suit of clothes. Making them all from the same fabric does. Wearing mismatched fabrics only draws attention to the fact that the wearer doesn’t have a suit.

The useful lifetime of a suit of clothes is usually limited by the trousers. They wear out, or are otherwise damaged, far before the jacket shows normal signs of wear.

The solution? Make a second pair of pants from the same fabric, and double the useful life of the garment investment.

Will people pay more for that extra fabric and tailoring? Yes. Yes, they will. Ask them to pay 20 to 30 percent more for twice the usage, and see how quickly they line up to buy.

And that’s why we stress value, rather than price.  Sometimes to be considered value, one does reduce price. Other times real value requires paying more.

Shoppers want:

1. More

2. Higher Quality

3. For a Longer Time

4. A Reduced Price

Pick one. Better yet, pick two. Survive the shake out by making your choices those which your competitors do not, can not, or will not offer.

Price always comes last. Location, brand familiarity, and business reputation can all be more important than minor price differences – an in a competitive selling situation, those differences will tend to be minor.

And a bit of imagination can certainly help to showcase what’s important to a shopper.

Five Guys Bounteous French fries

Five Guys Fries

Five Guys Fries

Is there a more competitive niche of the restaurant business than burgers and fries? And yet, one of the hottest players in this industry is Five Guys, who’s French fry servings are legendary.

They put your fries in a large styrofoam cup, filled to overflowing. The cup goes in a paper bag, and they pour in more fries, until the already generous serving size has more than doubled.

It’s value.  Is it inexpensive? No, the average ticket for a burger, fries, and beverage at Five Guys is about $11 – roughly double that of McDonalds. Customers not only pay it, they brag about the place to their friends.

KFC’s Containers

KFC Reusable Containers

KFC Reusable Containers

While other fast food restaurants package their meals in disposable paper or styrofoam containers, Kentucky Fried Chicken is now sending side dishes home in Tupperware® or Gladware® styled re-usable containers.

Serve from them. Re-seal leftovers in them. Wash them. Use them for other leftover items.

They probably cost KFC a few pennies more. The company gets points for customer value, and bonus points for being environmentally conscious.

Gallery Furniture

Gallery Furniture

Gallery Furniture Delivers

If a customer lives within 100 miles of Houston’s Gallery Furniture, they can expect same day delivery and set up by store employees.

Buy it today, have it in your home tonight.

They even call 30 minutes ahead to let you know when they’ll arrive.

Sometimes value has nothing to do with price.

Rexel Electric Becomes Destination

Rexel store

Rexel store

When my friend and colleague Mike Dandridge took over the Rexel electrical wholesale store in Midland, Texas, he installed a Senseo® Coffee Brewer and a cross section of gourmet coffees. Dandridge baked chocolate chip cookies throughout the day in a convection oven.

He piped comedy albums into the background music system, installed plantscapes throughout the store and Christmas lights around the counter. Dandridge placed Mr. Potato Head and Etch A Sketch, along with other toys at the counter.

And, of course, he focused on excellent customer service.  Over the next three years Rexel sales more than quadrupled.

Did Rexel try to undercut Lowes or Home Depot on the price of electrical supplies?  No.  They understood the value in the shopping experience.

Exceptional value, as perceived by shoppers, is rare, which is what makes these such great examples.

We assume the differences in our offerings are significant to our shoppers. We assume the “value added” we stack on top of our products and services are appreciated by shoppers. All too often, we’re wrong. What happens when the “extras” we draw their attention to aren’t even on their radar?

If they want bells, don’t give them whistles

Value is the price she expects, compared to the price she pays. Stack on more and more things she doesn’t care about and wouldn’t pay for, and instead of adding value, we merely clutter the dialog with irrelevancies.  We risk becoming irrelevant if we don’t understand to what our shopper pays attention.

Do we know what she values? How sure are we that we know?

survey clipboard


I’d suggest we ask.

List the attributes you suspect are important, and ask your customer to rank them from most to least important.   She can’t rank those attributes equally, and you can put  this information to immediate use.

Ask her about delivery and set up, documentation, portion size. Ask about entertainment, speed of service, problem resolution, free refills, courtesy of staff. Maybe even ask about price.

But limit the choices to five or six in order to get her to complete the survey. How many customers need to complete it to be useful?  It doesn’t take that many, actually. We only need a basic understanding, not statistical predictability.

25 to 40 completed surveys will provide a solid insight into what shoppers consider important. Knowing which bait works best is important when you’re fishing for customers.

Your Guide,

Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about articulating your value, and making sure your customers appreciate it? Drop Chuck a note at [email protected]. Or call him at 304-523-0163.


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You Can’t Win Customers With a Boring Newsletter

Newsletter image

Newsletter Example

Typically, people involved in business, especially in competitive industries, think what they do is fascinating. To people outside the industry, they aren’t.

So, when you fill your customer newsletter with riveting content which involves your new line of adhesive tape which is now 13/100 of an inch wider, or that your bookkeeper has a new grandchild, you’re signaling to potential customers that you don’t care about them. I assure you, they will return the attitude.

If your newsletter is considered marketing for your company, then let’s look at how to make it more effective.


How to Write a Winning Client Newsletter

The Customer Must Always be Your Focus
My clients don’t care about my internal operation. Your clients don’t either. But they always care about themselves and things which affect their lives.

Write About Things People Will Actually Use to Improve Their Lives
Interestingly, your topics don’t have to be related to your business. Send information about inexpensive insulating tips, chili recipes, or even houseplants that thrive in your climate. Conduct contests. Give small prizes away “just because.” Project friendly and fun.

That doesn’t mean don’t write about what you do, just recognize that there’s a limit to the number of times you can show how to save money with your product. (That limit is once, provided it was interesting the first time. If not, the limit is zero.)

Publish Consistently
How often do you want your customers to think about you? Monthly is good. So is bi-monthly or quarterly. Don’t stretch it out to more than three months at a time, though, or people will forget and your latest mailing will be just another piece of “junk mail.” Pick a schedule, and then stick to it.

If you tell people to expect your newsletter every month, skipping a month makes you appear to be less reliable. Keep your promises, even the little ones.

Market With Your Newsletter
Publicly thank your customers for specific referrals. Print your more compelling testimonials. And always have a compelling offer in every issue. Done correctly this isn’t just a “feel good” piece you’re putting out… it’s also a low pressure sales tool.

Newsletters Work Best Long Term

Customer relations is a process. It will take several issues for customers to just get in the habit of reading your newsletter.

It will take longer for it to prompt referrals or sales.

But when you present your company with professionalism, do so reliably, and talk today about what people are talking about today, you’ll find customers look forward to receiving anything you send them.

And that’s the bait your competitors simply can’t buy when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about getting your company’s news out? Drop Chuck a note at [email protected]. Or call him at 760-813-5474.

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Buddy, You Don’t Offer Enough Value

Value Added

Value Added

Are you familiar with the term, “velocity of money?” You’ve maybe heard it said that a dollar changes hands roughly seven times before it parks in a savings account or a long-term investment. Velocity is the relative speed at which the changing happens.

A dollar that enters the community in January and circulates through six other hands by April is evidence of a very different economy than one which enters in January and finally parks in August.

Right now, money is changing hands at the slowest rate in decades.

Unemployment is high, but employment is still much higher. For every person without a job in this country, seven are still working, still wearing out clothing or streetwear for men you can buy online, putting miles on cars, buying groceries, paying rent, and tithing to their churches. They’re still spending, but at a greatly reduced velocity.

The people who are spending are carefully considering each purchase. They’re not buying cheap. They’re buying value. Cheap is price compared to other similar offerings. Value is actual price compared to expected price.

Value, over and above.

I’ve recently had conversations with three independent practitioners in the financial industry. One is a stockbroker, one a fund manager, and one a financial analyst. They each asked the same question: “How can I meet more high income investors?” The stockbroker summarized his goal as: “I can’t make any money dealing with the people in this community. I want to find clients so wealthy that I can back my pickup up to their door and shovel the money directly into the truck bed.

There’s a major flaw in his thinking. High net worth investors already have a broker, or a fund manager, or a financial analyst. The professionals they choose to work with were carefully vetted before the relationship got underway. And, should they ever become disillusioned with their current advisors, they will look for someone who offers a greater value than the current advisor does.

What value does our stockbroker friend offer investors?

Pretend you are a high net worth investor, and you have a $2 million portfolio. Will you trust your money to an advisor who’s clients are primarily in the $250,000 range? Or will you want to be the smallest account managed by an advisor who’s average client has a $200 million portfolio?

There’s an implied competence in someone with whom much bigger investors have already trusted their money. As the new guy on the block, if you’re not already working with those clients, you’re going to have to offer something other advisors don’t.

Can you be the only advisor who meets with his clients quarterly, or semi-annually to re-evaluate their immediate and longer term goals? In a rapidly changing economic landscape, frequent attention may be of value.

Can you be the advisor who out performs the market by three or four points? Can you do it consistently? Can you offer proof of that?

Can you specialize in super-serving a niche market? Self-employed professionals? Single women? Law enforcement employees? What does your understanding of their specific circumstances ad to your value?

Value – the operative word for the decade.

Are you in retail? Do people come to you to shop? What do your customers get that no other retailer offers them? Do they recognize that value? Could you articulate it in two or three sentences?

Are you a service professional, selling your plumbing, painting, or air conditioning expertise? Why would a customer find your service more valuable than other service professionals? Can you explain that in a typical elevator speech?

Do you operate your own professional practice? What can your architectural clients, your dental patients, your legal clients expect you to provide that other professionals don’t offer? Do they already understand your value? How do you know?

What value do you offer?

Its a critical question for the next decade. People are still spending. They’re not looking for cheap. They’re looking for value. Without it, you’d best hunker down and hope you can keep enough cash coming in to keep the doors open. If you have real value, but need help explaining and projecting that value to the marketplace, my direct number is 304-523-0163.

The ability to state it simply, and to communicate that value to your potential customers is critical in this decade as you fish for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about articulating your value, and making sure people know it? Drop Chuck a note at [email protected]. Or call him at 304-523-0163.

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There Is No Word-of-Mouth "Marketing."

Pay close attention to Stephanie’s story:

“Roger’s feet get cold easily, so I bought him a pair of sheepskin slippers. He loved them, but it wasn’t long before the wool lining started wearing off. So I called Lands’ End to see if I could get them replaced under warranty. The lady I talked to was very nice, but she couldn’t find any record of my purchase, and she couldn’t figure out which slippers I was describing. But, she cheerfully told me that she’d be happy to exchange them, and gave me a return authorization. I was pretty excited when I told Roger that Lands’ End had agreed to replace his slippers even though I couldn’t find the sales receipt. He told me that was because I bought those slippers from LL Bean.” 

Stephanie tells her story well. People laugh at it. It’s the kind of story that people tell each other daily. It’s the kind of story likely to be repeated by people who don’t know either Stephanie or Roger.

There’s a critical lesson, though, in Stephanie’s story. Did you catch it? No problem. We’ll come back to it in a minute.

Stephanie’s story is an example of Word-of-Mouth.

It’s not, however, an example of Word-of-Mouth “marketing.”

And apologies to WOMMA aside, I’m not convinced that Word-of-Mouth marketing exists.

Why? Because adding the word “marketing” assumes that it’s something the business causes to happen. Word-of-Mouth may be influenced by business, but by it’s very nature it can never be controlled.

Go back to Stephanie’s story for the critical distinction. Is she telling a story about customer service at Lands’ End? No. She’s telling a story about her own experience as a customer. People love to tell stories about themselves.

Exactly how important is your product or your service in the telling of any customer’s story? If the stuff you’re selling fits into her narration, it might be included. But whether it is or not, Word-of-Mouth in any of its forms is always about the experience of the buyer. Only indirectly is the seller even involved.

Which makes Word-of-Mouth “marketing” a misnomer.

Word-of-Mouth is not marketing for several reasons.

Marketing becomes cost effective when there are efficiencies of scale. Word-of-Mouth takes place on a one-to-one basis.

In marketing, a company sends its message directly to prospects. Word-of-Mouth is farther removed from the company with each iteration of the story. People who know the story teller will be influenced. People who know those people may be slightly influenced. At three degrees removed there will be minimal effect, if any. (And yes, I’m fully expecting a few e-mails pointing out “Viral Marketing” as an example to the contrary. Can anyone even predict what goes viral? I thought not).

Finally, people may get your message wrong, and you can’t stop it from happening. In a few more tellings Stephanie’s story could easily mutate into a tale about a lady who had a funny interaction with Sears.

Word-of-Mouth is not marketing. It’s not advertising.

Word-of-Mouth existed long before advertising. When most people lived in smaller communities, walked to the market, talked to their neighbors, and gathered in churches or meeting halls, Word-of-Mouth was simply conversation.

Advertising became important communication when our communities got too big for the people selling stuff to personally know their customers. Mass media carried the message from the manufacturers of goods to the new post-war middle class.

But for the last century, probably due to over exposure, we’ve all become less susceptible to advertising’s claims. Customers now are more likely to believe the opinions of total strangers than the advertising messages of local companies.


Word-of-Mouth is now more critical to business success than at any time since the dawn of mass media. And yet, you can’t make a customer talk about you. You can’t make her not talk about you. You’re going to be mentioned when you’re part of her story. No more. No less.

Change your role in her story.

Although you may view Miss Customer as a purchaser of the things you sell, she sees herself as the protagonist in her own story. When you try to make the story about your company, Miss Customer will dismiss your whole effort as irrelevant.

But if your business is willing to become the secondary character in Miss Customer’s personal narrative, is willing to engage Miss Customer, and indeed to make her story possible, that’s when she’ll take you along for the ride. Your business “character” will be portrayed in much the same way as her interaction with you happened in real life.

Treating her well may be the only influence you have in the creation of positive Word-of-Mouth. Treating her badly ads drama to her story. This not only makes your appearance in her story more likely to be negative, dramatic stories tend to be told more often, and over a longer period of time.

Which leads to what may be the most important question: when she does business with your company, do you treat Miss Customer as the star she is?


Chuck McKay is a marketing consultant who helps customers discover, and choose your business. Questions about Word-of-Mouth may be directed to [email protected]

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Free Coffee and the Incremental Discount Coupon Tactic

Cup of Coffee

Cup of Coffee

As I headed out the door the Lovely Mrs. McKay handed me a coupon from the new C store in our neighborhood, saying “You’ve got to stop for gas anyway. Here’s a coffee for the road.

The coupon offered a “free coffee beverage” from, oh, let’s call ’em “Comfort Brothers Gas Station and Convenience Store.” I thanked her and slipped it in my pocket.

Does a lower price boost sales?

Will the availability of a discount, or a membership card, or a “get one free after purchasing ten” punched card appeal to everyone? Of course not. Some shoppers enjoy clipping, collecting, and organizing coupons to take advantage of reduced prices on household goods. Others see the time required by that process to be part of the price they pay for your service (or product), and will happily agree to full rate not to be bothered with it.

If you offer a discount to shoppers who would have paid full price, you lower profitability. On the other hand, not discounting for the undecided leaves some inventory unsold. That reduces potential gross sales.

How can you tell which is which?

The answer is to let them select themselves.

Make multiple offers at different price points to maximize sales. Those who wish to pay full price may do so, and those who won’t will find a subsequent price/value ratio which works for them.

Here’s how to make it work:

Let’s imagine you have purchased a mailing list of high probability prospects for your new service. Send a letter, or post card, or other mailing piece to the entire list. Offer to sell them your service. Explain why you offer a good value. Some will purchase. Move their names from your “general” list to the “paid full price” list. Guard this new list. The names are golden.

A couple of weeks after your first mailing, send a twenty percent off coupon to everyone who remains on your “general” list. Segregate the names of those who respond to your second mailing into a “twenty percent discount” list.

In ten more days send the remaining names on your “general” list a thirty percent off coupon. See how this works?

You’re accomplishing two things through this process

First, you’re maximizing sales at every price point. Second, you’re segmenting your general list into groups of people who have now revealed the price at which they’re likely to find your future offerings appealing.

The percentage who bought from your very first mailing, divided by the total number of pieces mailed, is your base conversion rate. Over the next few months you might get as much as ten percent more than your base conversion rate, by offering these incremental increases in discounts. Expect the biggest response to be to your first coupon mailing. Each successive offer will produce a smaller number of buyers who will decide the price is finally right.

Of course, the biggest factor which determines your base conversion rate is the offer itself.

Specific dollars (cents) off tend to be more appealing than do percentages, although that can be affected by the market and the range of prices. Another proven appeal is to offer a reward such as free shipping or gift wrapping, or a free upgrade to anyone who spends a minimum amount.

And you’ll always want to print expiration dates as part of your call-to-action to force a decision. “This offer good this weekend only,” or “Offer limited to the first 100 customers or close of business Friday, whichever comes first.”

But, I digress from my personal coupon story

After gassing up the car, I went inside to pay and to pick up a cup for the road.

The coffee menu offered “a full-line of latte and mocha beverages served hot, iced and frozen, with gourmet flavored syrups and chocolates.” Every conceivable latte, espresso, and cappuccino. Full caffeine, half caf, caffeine free. With and without sweeteners, cinnamon, or chocolate. Iced lattes and mochas. Frozen lattes and mochas.

Thinking of my blood sugar, I finally decided on a simple cup of house blend. Strangely enough, I could tell right from the redolence of the coffee that it was akin to the one described in this article.

I presented my coupon and was told that they couldn’t honor it as payment for plain coffee. The offer, as I could plainly see, was for one of their prepared coffee beverages. Not for a simple cup of coffee.

Are you serious,” I asked? “You’re willing to make a generous gift of a $4.50 banana caramel iced mocha, but you won’t let me have a simple sixty-nine cent cup of coffee?” Again, the attendant pointed out that the coupon clearly offered a “free coffee beverage,” and not a free cup of coffee. I handed the woman a dollar, took my change, and headed down the road.

Years ago I watched an older lady present a coupon for a Big Mac at a Burger King restaurant. The young man behind the counter said, “Ma’am, this is a coupon for a McDonald’s sandwich. We have a very similar sandwich called the Whopper. May I get one for you at this same price?” This young man gracefully helped his customer avoid embarrassment. Care to bet she became a loyal customer?

I hope my experience was not typical. I hope that the tens of thousands of coupons the Comfort Brothers spent on their grand opening paid off handsomely. In truth they have a beautiful store. It’s spotless, modern, and well laid out. The staff is friendly, well trained, well dressed. Shopping in their store should be a pleasure. I’m sure for most people it is.

But I only remember that when I presented my coupon, they told me “No.” And that’s a tough first experience for any new customer to overcome when you’re fishing for customers.

Your Guide,
Chuck McKay

Marketing consultant Chuck McKayYour Fishing for Customers guide, Chuck McKay, gets people to buy more of what you sell.

Got questions about couponing, multiple price points, or direct mail marketing? Drop Chuck a note at [email protected]. Or call him at 304-523-0163.

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Are You Testing Advertising, or Simply Your Offer?

Somewhere in America a rookie cable TV sales representative is talking to the owner of a men’s clothing store. The rookie could have been working in newspaper, or outdoor, or radio. The retailer could have sold sewing notions, or computers, or farm supplies. The the specifics could be variable. The outcome won’t change much.

The story begins.

Our rookie is explaining to the owner why his ads are such a bargain. The owner says, “Young fella, you’re making a pretty good case for some cheap ads. I’ll tell you what. I’ve got three hundred dollars left in my budget. See that rack of suits back there? You sell those. We’ll test just how effective those cheap ads of yours are. Do a good job for me on this sale, and I’ll consider advertising with you again.

The rookie takes note of the rack of pea green suits, and thrilled to have cracked this account, says “Yes, Sir! We’ll get right on it.” He calls his production department to schedule a video shoot at the store, and writes up the order.

Unfortunately, it will be his only order. The pea green suits will not sell.

A slightly more experienced media rep would from this point on avoid the client. The more experienced rep has already learned that these kinds of ads only work sometimes, and those times seem unpredictable.

Our rookie, however, is a little less experienced and a lot more conscientious. He will stop at the store to check on the progress of the sale. The owner tells him nothing is happening. Nobody is buying the suits. In fact, nobody has even mentioned seeing the ads.

Back at the station . . .

The rookie tells his sales manager that he’s worried about the new account. If they don’t make something happen, the store owner isn’t likely to advertise again. The sales manager tells the rookie to order a “blind bonus” – ads that the client will never be charged for. The client won’t be charged because the announcements will be added to the schedule without hiss knowledge, in an effort to increase the impact of the advertising, and cover up any shortcomings in the original plan.

Not surprisingly, the extra ads don’t drive any additional traffic.

When the sale is over, the ads have run, and its time to reconcile the books, our young media rep will apologize to the store owner. The rookie will collect the three hundred dollar payment. He will decide to never again try to sell this advertiser anything.

Worse yet, this conscientious young media representative has now started doubting that advertising works. He’s previously seen it work well. Sometimes. Now it seems that sometimes it doesn’t work at all. And he can’t see any way to predict which.

Did advertising fail the test?

Yes? No? Not sure?

Consider that rack of pea green suits. The regular customers of the store did not purchase them. Why? Are they the wrong color? Wrong size? Wrong fabric? Wrong style? Wrong price? Some combination of wrongness? It is a safe conclusion that something is wrong. The store still has so many of them in stock that those suits have become the entire focus of an advertising schedule.

Unable to sell these suits to his regular customers, the store owner now expects the rookie to magically create new customers. New customers who like unacceptable merchandise.

I submit that this exercise is not a test of advertising at all, but rather a test of whether it’s possible to sell goods no one wants. “Won’t you please buy one of these previously-rejected suits, despite their wrongness?” No matter how many times people see this ad the outcome is the same.

Oh, and it’s also a test of the rookie’s willingness to accept responsibility.

It always comes down to the offer.

Not that long ago the owner of a local business (who used to license the software for lawn installation companies) wanted me to create ads which said, “Mention you heard this ad and get a free key chain from Acme Widgets.” I agreed that any medium not able to deliver the message should not be included in his advertising budget.

Then I pointed out that a much more fair test would be “Mention you heard this ad and receive a free $100 bill.” He sputtered something about the stupidest thing he’d ever heard and slammed down the phone.

I’m assuming he and I won’t be working together.

So, the first decision must always be what we are to test.

Let me save you some time. It all comes down to the offer.

And why would you waste your money testing such lame offers as free key chains or racks of pea green suits, anyway?

Want to learn how to make every ad deliver a positive ROI? I highly recommend the Advertising Performance Seminar next week in Denver, presented by the Wizard of Ads Partners. For only $99, you’ll come away with more knowledge of effective advertising messages and positive customer experiences than many of the media sales reps calling on your company.


Chuck McKay is a marketing consultant who helps customers discover you, and choose your business. Questions about testing your advertising may be directed to [email protected]

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