Oh the weather outside is frightful, but it’s not snowing in the south-western tip of Africa. The wind’s howling and four seasons are constantly…
Last week, when I was home lazing in front of my laptop, my mother commanded me to go out and buy a few groceries and other household items (although I think the instruction was more out of concern for my laziness rather than an actual need for the groceries). So I ventured out and arrived at the main street and became instantly confused by all the store options. But almost immediately, one particular shop caught my attention and in a moment I had made the decision.
I ended up spending over an hour at this store and learned a number of surprising lessons from its owner about everything from customer service to marketing. Here are a few:
Social media and customer engagement
In an hour, this owner must have serviced around 30 customers, but he made a point to speak to every single one of them, whether it was asking person X when his son was coming home from college for the holidays or speaking to person Y about her mother’s health. In fact, as soon as he saw me, the first thing he asked me was who I was and where I lived.
Many businesses believe social media and customer conversations should be outsourced. I firmly believe that the organisation’s own employees should be the ones engaging with and learning about the customer, one-on-one. Consistency in communication is very important for the company’s brand image.
Deep understanding of customer preferences
I asked the store owner for a bottle of shampoo, telling him any brand would do. He replied that my family generally prefers a specific brand. It’s a simple example, but this guy knew all about his customers’ preferences. And this was not a once-off case. It happened twice more to different customers while I was there. I tried to imagine all that data in his head, and was amused and surprised at the same time.
Recruiting the influencers
While I was in the store, I asked the owner why he was giving out free chocolate to some kids. He smiled and said that those kids will go home and tell their parents about his store and how they got free toffee. This in turn will lead to repeat purchases.
He had nailed the concept of ‘recruiting the influencers’. Now, I am not advocating bribing or sending gift boxes to the influencers, but the point is that you need to recognise and capitalise on the importance of getting key influencers to like your business.
The owner personally delivers to all his customers’ houses during his lunch break and after shutting the shop at night. He also takes returns. I asked him if he encountered any problems with returns. It turns out very few people actually return goods and this is mostly the case with bulk purchases, in which case, he anyway ends up selling more in a day than he would generally in a week.
He also makes a point of discussing the quality complaints with his distributor. This ascertains that the distributor is always on his toes and delivers the best quality product to this store.
Differentiation based on pricing strategy
I decided to probe further and the next part turned out to be very interesting. This owner finds out from other customers what the other stores’ price points are. Then, he differentiates his pricing considerably for a few high-margin products.
He gave me the example of a product that costs INR 102 wholesale, with a minimum recommended price of INR 139. So, the store owners have a margin of INR 37 off the shelf. He immediately priced the item at INR 118 against the neighbouring store’s INR 125.
I wondered how many units he would have to sell to make a decent return on the premise of selling more volume to offset for the lower margin. His long-term thinking blew me away. It turns out the whole thing was about the conversation that it would start in the circles about how his store was selling stuff cheaper than the others nearby. He knew that people tend to generalise and the specific product would end up not even getting a mention in those conversations.
Thoughts on competition and competitors
This store owner resides 6 kilometres away from his store. He had figured out way back that he was not going to sell very much near the area he lived in. After scouting for possible areas, he decided to move his store to my community, which already had 10 similar stores. He did not see that as fierce competition, but as an opportunity to cater to a larger population.
There is a lot of hype about disruptive innovation and unique ideas. But we must not forget that sometimes it’s just about building a ‘better mouse trap’.
Find the gaps
His store is open 24/7 (well, not literally), while the other store owners in the area open shop at 9:30am, despite the fact that they stay nearby. His store opens by 8am and is generally the last one to close at 10pm. Even on Sundays while the others are enjoying a holiday, he keeps his store open. Guess who’s selling while the others are busy sleeping?
No wonder he has a vocal army of loyal customers singing his praises and encouraging more of their friends and family to do the same.
This article by Abhash Kumar originally appeared on Trak.in, a Burn Media publishing partner. Image: David Schofield via Flickr.