3: Creating The Right Sales Environment
Because products are not unique, and because price is not the primary motivator for the affluent customer, the focus on competition is in creating "the right sales environment" to attract and maintain affluent customers.
The author does not define this term, but goes again into a series of anecdotes that imply what it might mean: catering to the client's emotional needs, providing a higher level of service after the sale, efficient use of time, making it convenient for the customer, etc. There are quite a lot of little stories, each of which repeats one of the points in the previous chapter about decision-making.
Then, a list of ten things to avoid, which actually includes eleven things, and most are merely inverting the decision-making factors: neglect, poor service, complacency, inefficiency, inconvenience, technical deficiency, manipulation, deceit, failure to listen, using technical jargon, and being impersonal.
Seven Principles
The author suggests seven principles for a successful "sales environment."
(1) Relationship-building
The relationship with a seller is more critical to winning the business of an affluent customer than the product (given they can buy the same thing from someone else) or the price (which is among the least important factors in the motivation of an affluent customer).
Specifically, a vendor must take the initiative to build a long-term professional relationship with an affluent client rather than pushing for an immediate sale. The latter is not likely to be successful and, if it is, the customer will not repurchase and may discourage others from doing business with you.
From a management perspective, this means placing primary emphasis on customer retention rather than new-customer acquisition.
(2) Convenience
Affluent customers value their time and are willing to pay a premium for convenience, and will seek to avoid inconvenience.
Convenience of location is specifically mentioned: the time to travel to a vendor is considered part of the cost of a product or service, weighed against the benefit to the customer in assessing the option to buy from you. The author mentions services that come to the customer: home delivery, a mobile repair unit, etc.
Convenience of schedule is also mentioned: most affluent people are professionals or business owners who are reluctant to take time away from their work to handle personal matters. Being available outside of normal office hours (evenings and weekends) is a major advantage if your competitors are not.
(3) Seamless Selling
The flow of the sales process, from initial contact to closing the deal, must be a natural and comfortable progression from the customer's perspective.
Many of the policies, procedures, and practices retailers put in place are designed to make it simple and efficient for their employees, not the customer.
The concept of control is also significant to the affluent customer, who is accustomed to being in a position of authority and has a negative reaction when someone else attempts to control or manipulate them. An affluent customer is most satisfied when he feels that he is "driving" the interaction and others are in a supporting role.
This is often the root of their contempt for salespeople, in that a salesman is in a subordinate position and their attempt to control the buyer is seen in much the same light as a subordinate who attempts to wheedle or control their boss.
(4) Quality
Affluent customers are willing to pay a higher price for products and services, but expect to get a better product or service in return.
The near-affluent or nearly-affluent customer may be inclined to brag about how much he paid for something as a way to one-up others who can't afford it, but the affluent customer will brag about getting a good deal: his peers can also well afford it, so the ability to pay a lot for things is less significant in terms of esteem than getting good quality.
Remember that an affluent customer has likely done his homework, especially for high-ticket purchases, and in that respect has often sold himself. Even where he has not, he will be more interested in gathering factual information from a salesman and making his own assessment of whether the product is "quality."
Independent assessment is also significant: the affluent customer knows what is important to him, and a company's claims of what constitutes a quality product are not influential with the customer.
The author gives the example of Cadillac, a brand that was once synonymous with quality. The author doesn't go into detail of how they lost that association, but it's clear that the phrase "The Cadillac of [product]" once connoted the very best in quality, and now is a snide joke that implies something is overpriced and inferior.
(5) Attentive service.
The author uses Ritz-Carlton as the pinnacle of attentive service, which shows great care and attention to detail, even seemingly minute details, in delivering a peerless level of service to their guests.
It's remarked that the late twentieth century was a time in which efficiency was the goal, and companies cut a lot of corners to reduce their operating expenses and eliminate what they considered to be waste, which has been devastating to customer service. The net result has been tremendous efficiency, but egregious service - products are made as cheaply as possible, and companies of as little as possible to ensure quality of service.
As the author travels much, he relates some personal experiences of hotel rooms, and there's little difference between a business-class property and the very cheapest discount properties. If they did anything less for you, you wouldn't stay there at all, and if you ask for anything more, expect a significant charge to be added to your bill.
(6) Efficient service
All interactions must be highly efficient and hassle-free for the customer. Things such as waiting time and paperwork should be eliminated or cut to a bare minimum.
The author suggests two critical metrics: how much time it takes to do something and the number of errors that occur. I the first can be decreased without increasing the second, do it.
This also goes back to the notion of control: a vendor that insists customers do certain things that make the business operate more smoothly is imposing on the customer, often unnecessarily, and never to the customer's liking.
(7) Integrated service
The service a company provides must give the customer the sense of dealing with a single entity. His is true whether your firm engages vendors to provide parts of an overall service, or if there are various internal departments that do different tasks.
Passing a customer from one department to the next, or attempting to avoid responsibility by suggesting it's someone else's fault or responsibility, is intolerable. To the affluent client, this is a sign that the business is not well-run and does not have control over its people or its vendors, and is ultimately incompetent to serve them.
Integration is also meant to connote consistency: firms often neglect things that they feel are inconsequential to the quality of service, but everything impacts the experience of the customer: a messy bathroom in a five-star restaurant, or an expensive piece of jewelry placed in a cheap plastic bag, are inconsistencies a customer will notice in dealing with your firm, and such things plant doubt and distrust that is difficult to uproot.
Other Notions
The author refers to the example of discount retailers, Walmart being the current king of this demesne, in which the entire focus is on operational efficiency. Their chief (and only) method of success is offering a low price, and a dreary customer experience. The firm generates a very small margin of profit, but sells in sufficient volume that the balance sheet looks good. But their sales associates make minimum wage, and have little hope of getting any better.
(EN: The author fails to mention that many affluent people shop at Walmart. This doesn't undermine his opinions, but does call attention to the fact that there are purchases for which affluent customers are not significantly different than any other income group. While they might be willing to pay a premium for quality and conveniences for certain things, they clearly do not expect or desire red-carpet treatment when buying low-ticket staple goods, nor do they necessarily take a condescending attitude toward bare-bones retailers.)
The author relates some survey results on the factors ranked as "very important" for major purchase decisions:
- 83.3% - The features and benefits
- 75.8% - Careful evaluation and comparison [sic]
- 39.8% - Discounted price
- 37.5% - Responsiveness of sales and service personnel
- 23.0% - Opinions of their immediate family
- 14.8% - Opinions of their peers
While "price" ranked third in this survey, notice the significant drop in percentages after the first two items.
A stray note is that affluent customers are focused more on benefits than on products, which suggests that marketing should focus what the customer gains by owning the product: don't' sell them a television set, but a solution for home entertainment. The product is merely an object that helps them to achieve a goal.
But importantly, the goals are defined by the customer, and this is often misunderstood by salesmen who presume to tell the customer what their goals ought to be, rather than learning what they are. This offends the affluent customer.
The author then spins anecdotes and narratives, filling the pages for the remainder of the chapter without adding any new information.