It was another early day for Paul. He woke again at 3:00 am and couldn’t get back to sleep. His brain wouldn’t turn off. He had been thinking about his marketing problem for almost an entire year. Paul’s IT service company had been losing clients for a year. Paul struggled to retain clients who were being picked off by larger IT service firms. He felt he’d done everything he could to create a marketing program to attract high-paying clients. He called on business owners, he attended networking meetings, he advertised on Facebook and LinkedIn. He did lunch and learns with prospective clients. He couldn’t figure out why he was losing ground.
His waking thought was, ‘I’ll figure out what to do, if I just think about it some more.’ Sure enough, he came up with a clever idea to keep his existing customers. He decided he would give his customers a 5% discount for being loyal customers. Surely, this would keep his current customers; and would attract new customers who wanted the same discount once they had been a client for at least a year.
Later that morning, he rolled out his new idea to his employees. Understandably, his employees were not excited about Paul’s plan, once he told them that he’d need to freeze salaries until they got new customers.
It took about a week to roll out the new program to his customers. A few customers were excited to get the news that their IT service bill would be going down instead of up. Unfortunately, Paul got a notice from another client who was cancelling, after she received the discount notice. The client’s name was Amanda. Amanda had been a client of Paul’s for 3-years, liked Paul and was happy with the service she was getting from their company.
When Paul called Amanda, she told Paul another company called IT Specialists gave her a deal that she couldn’t refuse. The price was actually higher than Paul’s, but she felt they offered more IT services that her company needed now that they were a little larger.
After Paul hung up the phone, he was distraught. He thought, ‘How can we compete against these big guys? I drop my prices and it still doesn’t seem to make a difference.’ He remembered meeting a guy who called himself Coach Russ. Coach Russ was a business coach. Maybe, it was worth giving Russ a call to see if he could help Paul turn around his IT service business.
After Paul contacted Russ, he had Paul do an exercise called a Business Wheel. In the wheel, Russ asked Paul to rate his business on a scale of 1 to 10 in eight distinct areas of his business. He brought his completed wheel to Russ for their first session.
After introductions, Russ looked at the wheel that Paul had completed and said, “I notice that you rated yourself a 4 on Marketing. Can you tell me, in your own words, why you gave yourself this rating?”
Paul responded, “Our marketing is terrible. I can’t seem to attract new customers; and the customers I have are leaving to go to the big IT firms because we aren’t good at communicating how we’re better than those firms.”
“Interesting. I notice that you rated Operations an 8. Can you tell me why you rated your company an 8 on Operations?”
“We have excellent technical people. They’re trained on the latest technology and we get compliments all the time on how well they’re serving our customers.”
“When customers leave, what’s the reason they give you for leaving?”
“They say the big guys give them services they can’t get from us.”
“Can you give me an example of a service that the large IT companies offer that you don’t offer?”
“I don’t think the big guys actually DO anything differently than us. They just say things differently than we do; and convince the customer they’re getting more service.”
“I’d like to introduce you to a concept that I use to coach my business owner clients. It’s called Core Energy Coaching. What do you think?”
“Sure! As long as it will help me keep customers and get new ones.”
“Let’s start with marketing, because it sounds like you’d like to work on that first. I’m going to give you three statements and I want you to tell me which one best describes your message to your clients.
- ‘Our service is just as good as anyone else’s, but at a lower cost, buy from us.’
- ‘Our IT professionals are friendly and courteous and will focus on serving your needs.’
- ‘We offer remote troubleshooting that will save you time and money when you have a problem.'”
Paul seemed a little confused, “I think we say all of that in our marketing.”
“I understand. But, if you were to pick one of the statements I made, which one seems most like the message you give your customers.”
Paul seemed a little embarrassed and then said, “I guess it’s the statement about lower prices. We just offered a 5% discount.”
Russ responded, “Thanks for your honesty. I think that’s probably the message they are hearing.”
Paul seemed a little defensive, “We did have some clients who liked the discount we gave them.”
“I’m sure that a discount is always appreciated. I’m not as concerned about the specific message. I’m more concerned about the energy at which you’re interacting with your current clients and your prospective clients.”
Paul seemed even more confused, “What do you mean by Energy?”
“The three statements that I gave you carry with them a different level of energy. The statement about cost is at Level 2, while the statement about great service is at Level 4, and the message about a feature and benefit is at Level 5.”
Paul interrupted, “I don’t get it. What do these levels mean? And what could this nonsense have to do with me losing customers?”
Russ continued, “You see most business owners act with what I call an analytical mind. They think they can win customers over by changing some marketing slogan, or dropping their price, or some mechanical way they operate their business. They then tend to be frustrated when their mechanical actions don’t yield positive results.”
“I told you, we try to say many different positive things about our company. Not just our price. Price just happened to be the most recent.”
“Regardless of what you try to do, the customer will usually only hear one message. And that message must be consistent with your actions.”
“We do give good service; and we do offer innovative features to our IT service. Are you saying we aren’t acting consistent with these things?”
Russ felt like he needed to back up, “I’m not saying anything about you. I’ve just met you. What I am saying is that people will respond to different messages that are backed up by actions. If you’re losing customers, you’re most likely not communicating or acting in a way that is desired by your customers. If this is the case, your weakness is in Operations; not in Marketing. You indicated that, on a scale of 1 to 10, you feel like you are an 8 in Operations. This means that you THINK everything is going okay. As a core energy coach, I look at the energy level in each area, not the mechanics. You indicated that you wanted to retain your customers by giving them a discount for being loyal. This tactic will appeal to those customers who want a lower price at energy Level 2; but will fall flat on almost all other types of customers.”
Paul felt exasperated, “How on earth are we supposed to try to find a message that works with ALL of our customers?”
“You had to gain these customers at one point. Tell me, what has changed?”
“I signed most of these customers when I was a sole proprietor. I was the technician and the sales guy. I had to hire sales people and technicians to do what I used to do. But, my employees are great people, I don’t know what the problem could be.”
“Chances are that you communicated on a higher energy level with your customers and prospects than the level that your current staff is communicating with these same people. It’s common for a business owner to attempt to communicate at Level 5; and it is common for employees to communicate at Level 1 or 2, if they’re not trained.”
Paul had it with energy levels, “I have no idea what you’re talking about with all of these energy levels. Can you speak in English, please?”
Russ smiled, “Of course. Sorry for the confusion. I really should have filled you in on this language. Level 1 is Victim energy; Level 2 is Conflict; Level 3 is Rationalization; Level 4 is Service; Level 5 is Entrepreneurial; Level 6 is Synergy; and Level 7 is Awareness. I don’t expect you to know what all of these words mean, but it’s important to understand that customers, employees and you will act differently depending on your attitudes and messaging; and this action will result in a corresponding reaction from your customers.”
“I’m still not sure what you’re talking about, but I’m out of options on my end. There must be something to this energy level stuff. I’d like to learn more. Can you help me?”
Russ gave Paul a copy of his book that explained how different energy levels would arise in different areas of a business. He then helped Paul understand how these different energy levels impacted different areas of his business. Once Paul understood more about energy levels, he was able to quickly identify language that was being used by his employees, his customers and himself in different situations. Through Russ’s help, Paul was able to shift his energy levels in different situations.
Paul created five different advertising campaigns that spoke to five different levels of energy of his prospective customers. He helped his sales team identify which message each customer responded to so they could speak with a language that was most effective for each customer type.
After six months of working on HOW he approached his prospects and customers, he couldn’t believe the results. Sales were moving up; and his retention rate had increased as well. He raised prices which, surprisingly, attracted more customers than he lost. In fact, he found that as he increased prices, he kept the good customers and lost some of the customers he would prefer not to have.
One of the biggest eye-openers for Paul was that his technicians were not communicating all of the benefits they offered in a way that made sense to his existing customers. When his customers were approached by a competitor, they switched service providers assuming that Paul’s company didn’t offer the same benefits. The technicians all completed energy level training so they were equipped to communicate with customers. This reduced customer attrition and allowed Paul to rebuild his company.
As a business coach, I help my business owner clients change their mindset in a way that allows them the freedom and profitability they have always hoped for, but never thought possible. If you’d like to develop a Successful Business Mindset, I urge you to complete the free Business Wheel exercise below to see how you can grow yourself as a successful business owner.
As a long-time small business owner, I know how hard it is to create the business of your dreams while struggling with the financial realities of attracting prospects, converting those prospects into high-paying customers, and making money for you and your family. The biggest mistake in my past was not seeking the advice of wise counsel sooner than I did. I don’t want you to make the same mistake. I help my clients see exactly what they need to work on in their business by doing the Business Wheel exercise. If you’d like to try it out, sign up to the right. It’s completely FREE.