I just wanted to share what happened the other day. A customer walked in to ask about the prices of cement and steel bars and then asked if we could deliver immediately. He recounted a bad experience with another store that almost caused his goods to miss the boat he was taking back to his town.
In our place, fishing is the main livelihood. Most of my regular customers are very particular about brands when buying plywood, epoxy and other requirements. They look for quality and do not go for cheap products that would have to be replaced in a few months.
But walk-in customers are usually particular with prices. They normally canvass first and eventually buy from whichever store offers the cheapest prices. In the provinces, we find it difficult to explain to such customers that they would be saving money in the long run if they bought the better, although more expensive, product.
Since our customers come from our city’s small neighboring islands, I have entertained the thought of having a truck loaded with goods like cement and other products available at the port area very morning. The customers usually arrive about 7- 8 a.m. and leave around 11a.m. to 12 noon. This is why they want to have their purchases delivered to the board immediately.
Here are my thoughts on what was shared.
The reader has a great idea. To avoid the price trap (products selling because of price), he plans to "bring" the hardware store to the port. This innovation is very entrepreneurial. He knows his customers well. Even without the benefit of formal research, being sensitive and observing the customers (when they are not looking) have proven to be effective in understanding their needs.
He saw the customers coming in between 7-8 a.m. He noticed they go to the various sources of supplies and then negotiate, purchase and arrange for their delivery to the port. He realized there is time pressure on the customer because the boat leaves at about 11 a.m. to 12 noon. If the supplies miss the boat, the cost to the customer is high. The customer either has to stay overnight (cost of staying over) or go back without the supplies (cost of delay) and then come back the next day (transport cost again).
* Provide customers with peace of mind. The customer needs the hardware products on the boat by 11 a.m. Think of the mental stress the customer undergoes when it is already sailing time and the hardware items he bought are not yet in the pier!
This is the opportunity the reader is looking at. If the hardware items were available in the port area before loading time, the customer would have peace of mind. This would take away the issue of price. Clearly, the master-entrepreneur’s differentiation is anchored on peace of mind, not price.
* Difficult things are easy to do; the impossible will take some time. Do not say that it is hard to give your customers a detailed explanation of the benefits of a better but expensive product. If they arrive at 8 .m. and leave at 11 a.m., you have a minimum of three hours to talk to the customer. Now that you have assured him of the delivery, he is less stressed and has more peace of mind. More importantly, he will be available to engage in some small talk.
Here is an excellent opportunity to use the time and provide the customer better criteria for choosing hardware products. In today’s world, customers are more informed. Entrepreneurs can provide customers a decision framework to apply the information they have.
Master entrepreneurs provide customers not only information but a checklist of criteria that will help them make better decisions. Needless to say, such criteria and information will point to the best product or service needed by the customer. This, as a matter of fact, also happens to be the product or service being sold by the master entrepreneur. This is so because master entrepreneurs only carry products or provide services that will meet the needs of the customer in a differentiated and superior manner.
Do not forget to keep on observing and being sensitive to the customers. Observe them when they are not looking. This is the only way to keep ahead of the competitors. Be the top innovator of your game. This way, you control the game. This way, you control the destiny of your competitors.
(Alejandrino Ferreria is the associate dean of the Asian Center for Entrepreneurship of the Asian Institute of Management. For further information/comments, you may mail him at: ace@aim.edu.ph. Published "Entrepreneur’s Helpline" columns can be viewed on the AIM website at http//: www. aim.edu.ph)