If you ask a business owner what they do better than their competitors, they’ll all tell you they deliver the best customer service. If you ask them to define customer service they will talk about pricing, products and all the usual things.
If you’re in the floor covering business, having competitive pricing, a good selection, competent installers and being nice to the customers is not customer service.
This is what’s expected in the industry; it’s the price you pay to be in business. Once you deliver the basics, you can begin to think about customer service.
In order to deliver customer service you must know your customers and your competitors. Without a clear understanding of these two, you can’t possibly begin to deliver your drop dead customer service. You can’t know too much about your competitors or your target customer.
Lowe’s Companies is a great example of the new guy on the block with a great understanding of the competitor and their customers. With this knowledge, they’ve been able to establish a prominent position in the market place.
Lowe’s Companies was originally opened as Lowe’s North Wilkesboro Hardware in North Wilkesboro, North Carolina in 1921 by Lucius Lowe.
Throughout the years, Lowe’s went through various formats, name changes and partners. In 1961 Robert Strickland and Leonard Herring took the company public. By 1962 Lowe’s operated 21 stores and reported annual revenues of $32 million.
In the 1980’s, Lowe’s began to feel the pressure from the economy and the new competitor, The Home Depot. Lowe’s format was smaller stores and located in more rural settings and they were considering entry into a larger, unknown marketplace. They probably knew if they didn’t change and become a big box store, they would be history.
Lowe’s took an interesting tact; they started opening across the street from their competitor– The Home Depot.
Many people were astounded by this move; why would you open across the street from your major competitor? Wouldn’t this be suicide?I thought so.
Despite being the new guy on the block, Lowe’s had developed a strategy that allowed them to penetrate the large markets and sit side by side with their largest competitor.
Opening across the street took a lot of moxie. Lowe’s looked like their competitor and carried most of the same products. How did they expect to thrive?
Here are things that Lowe’s understood about their competitor. The competitor had more money, had been established in these large marketplaces, and spent more on advertising. If Lowe’s could determine a competitive advantage, they would benefit from The Home Depot’s aggressive stance in the marketplace. They were bound to get customers by just being across the street.
Lowe’s also knew from the beginning, the Depot’s primary customer was the construction trade. Early in the game, Lowe’s decided their customer was a female. This was before pink hard hats and red hammers were popular.
Did Lowe’s know they were ahead of the new female consumer trend or were they just trying to establish their presence?
The Lowe’s stores were squeaky clean. Their associates carried cell phones and the overhead paging system was gone. The stores carried household items that were not available in the Depot. They carried items such as small appliances, shower curtains and a huge quantity of window treatments and small lamps.
Customers would often complain about having to bend over to pick up something in the Home Depot and find their clothes filthy. In addition their kids were crawling under racks and coming out covered with dust bunnies.
The female customer noticed the difference between the two stores and the word was out. Lowe’s was for women and Home Depot was for men.
At one point while doing training at Lowe’s I was asked by a manager what did I think the associates should be doing when they didn’t have a customer. I suggested they call their customers and follow-up on their installations. I was quickly told it would be better if they continued cleaning because women hate dirty stores! Wrong answer.
This is a great lesson for any business. Can you both compete and benefit from your competitor? Most business worry about how to compete and don’t think about how to benefit from their competitor and what they’ve bought to the marketplace.
I was told by a large mall builder that if you have a new product, it’s often better to let someone else blaze the trail. Trail blazing is expensive and doesn’t always work. If it works, it’s time for you to come and benefit from your competitor’s hard work. Just give it a new twist and the road to success will be less costly.
Looking for more on competition? Check out my blog on The Times Union, http://blog.timesunion.com/success/you-cant-deliver-great-customer-service-unless-you-talk-to-your-cusotmers/2480/
Lisbeth helps businesses build loyal relationships with their customers through customer service training and social media marketing. Her book, Red Hot Customer Service can be purchased at her web site, www.lisbethcalandrino.com.