Got business problems or challenges at work? With his Two Cents column, Loaay Ahmed shares his expertise in strategic management consulting to help managers, employees and entrepreneurs thrive.
We have a good database of our customers’ demographics and purchase history. How can we benefit from this information in the best way possible?
LA: Have you considered selling it to companies in Nigeria? The Junk Mail business is always hungry for email lists from the Gulf region. Well, putting the option of abusing your customers’ trust aside, helping your company to become seriously customer centric in a cost effective way is the main benefit management can extract from their own database. While demographics might reveal some semantics like where most of your customers live, how old or young they are and if they were predominantly men or women, purchase history is a much richer profiling tool. From their transactions your team will know how much each customer spends in total, how often they visit, how much they spend in each visit, what they’re buying, what quality they go for, and sometimes if you offer the option, you can tell if their purchases were gifts to others and for what occasion.
Assuming that you have all those details sorted out and have almost 3D profiles of your customers’ purchase behavior, the next step is to know your VIPs. A VIP is not a Very Important Person in the sense of celebrities, royalty and some family members of management. Although for PR purposes it might not hurt to give such customers special attention, the definition of a true VIP is a Very Important Purchaser. Customers who spend the most within any given year earn the top spot. Customers land at the bottom when they spend the least within the same period. Give all customers value for money but do everything in your power to keep the VIPs delighted and continue to spend because without them your business will shut down. All people are equal in the eyes of the law. In business, not all customers are equal…and that’s just my two cents.
Our company is planning a major event and we need to book a hotel. Most hotels offer the same services more or less. How can we better select our venue?
LA: Many local hotels are similar to the early 20th century circus acts. When they setup in a town, they display the most fascinating acts and freakishly intriguing faces. They will shout, talk in rhymes, smile and entertain you enough to think, “I’ll give them a try. They look exciting!” However, inside the tent, you could get a lazy old elephant, boring clown and fat tight ropewalkers that fall halfway. Other times, you see acrobats that defy gravity, funny sketches that will still make you laugh days after the show, and an unbelievably entertaining and memorable experience. Don’t be mesmerized by the hype or overpromises; focus.
In a recent booking for a networking program, the five-star hotel showed up late, had missing chairs, poor audio and food that looked as if it was cooked by the valet staff. Although they provided an acceptable level of service in the past, this time they didn’t pay attention to any details because they had one of their busiest weeks ever. However, when being confronted with their shortcomings they didn’t like it and reluctantly waived the fees. And at the next event, they asked for the payment upfront minutes before the program to avoid giving away another free booking. Once the venue ticks all the points in your success checklist look at the quality of the managing team, see and sample everything you asked for to make sure it works, document every little detail of expectation. When it comes to events it’s all about the people not the venue…and that’s just my two cents.
With so many new print media outlets, we receive endless offers to advertise. They claim that the big brands’ ads in some of their recent issues are paid for but I have my doubts. How can we tell if a new media is really worth advertising in or not?
LA: Signing up with a new media without doing your homework is like marrying someone from another continent without seeing each other first. Be only in publications your consumers read, not everywhere just for the sake of exposure. Also, if any of the major brands advertising in that media shares your target audience and is not a competitor in any shape or form, pick up the phone and ask them for their feedback. Knowing information like the actual reach, response level, type of respondents, and readers profile from real advertisers is more realistic than the media itself unless it has been verified by a third party that you trust.
New offline and online media will keep coming up. There will always be someone who thinks that Facebook is messing up, that Google is evil, or that The New York Times is out of date and that they can do better. Advertising anywhere because it’s free or low cost is the wrong reason. Ask yourself: Does it fit with the brand’s personality? Is there a better channel to communicate with our consumers? Your logo on the moon sounds like a great stunt, but what’s the return on that kind of investment? Think communication, not advertising, and measure it constantly…and that’s just my two cents.
For Loaay Ahmed’s advice on business or work matters, send a short email to [email protected]. Please note that only the questions chosen for publishing will be answered.
Loaay Ahmed is a management consultant and strategic expert. To learn more about Loaay and his consulting service, strategic business therapy, visit knightscapital.com.