Do you have Customers or Clients?
One of the most important questions a business can ask itself is: Do we have customers or clients? While people in both categories purchase things from you, there is a dramatic difference between the two.
For those who don’t know me well, I am an avid boater and fisherman. If I have any time, ever, I choose to spend it with my family, on the water, chasing fish. This means that, over the years, I have purchased more than my fair share of gear. Having 5 kids means that most of my gear purchases are preceded by looking at the best of the best, and then purchasing something far more affordable…with the exception of one thing. My coolers.
Coolers are an interesting study. All of them are about the same: white rectangles of various sizes whose sole purpose is holding ice and keeping stuff cold. While this seems simple enough, the surprising truth is that while you can buy a 25-quart cooler at about any sporting good store for $25, just around the corner on the next aisle you will find a comparably sized cooler selling for around $300.
A company called Yeti has figured out how to sell coolers to people that start at $300 and go up to over $1400. Does it hold ice? Yes. Do they measure the size based on how many cans you can fit in it? Yes. Does it hold ice for a remarkably long time? Yes. But is it worth more than 10 times what its competitors are worth? If you ask me and other loyalists, yes. Yes it is.
Recently, however, I was introduced to a new entry in the cooler market, a company who has blatantly copied the design and product line of Yeti coolers and is now selling their products for 50% of what Yeti sells their coolers for.
Now, based on my gear purchasing history, my budget constraints, and my desire to keep my catch icy cold, I bet that you know exactly what I did next. I went out and bought myself a new, shiny, ice-holding, YETI cooler. The reason why is a study in the difference between a customer and a client, and it’s a model we should all strive to replicate in our own businesses.
Why did I pay twice what I could have paid for a product? Why did my loyalty to a company and its brand keep me from doing what I do in almost every other purchase in my life? And most importantly, how do my cooler purchases have anything to do with selling more charters, to more people, for more money? Let’s begin by tackling that first question.
Why did I pay twice what I could have paid for a product?
I know that this may sound crazy to some people, but we all do it. Why do you buy the Advil brand headache medicine instead of the store brand when your head is throbbing? No matter who you are, there comes a moment when you are buying something and price is NOT the key motivator. In my case, I already own a lot of Yeti products, not just because of the brand, but because they work really well. They have never let me down, I have never had an issue with any of their products, and I own a lot of them. Some people would say that I have “drunk the Kool-Aid,” but the truth is that ever since I first purchased a cooler from them, they have earned my business. I watch their content on social media. I look for them to show me their new products. I don’t think I have ever liked a post on Facebook or shared their latest products with my friends, but I am paying attention and I have their stickers on my boat. I can’t say that I would ever purchase another brand of cooler… ever. I am a client of Yeti; I no longer shop when I purchase a cooler. I just go and buy another tried and true.
I was recently talking to an operator and they were telling me about something that had happened in their market where a competitor was targeting their customer base. She got a call one day from a CLIENT who said, “This guy called and offered a super discounted rate to book with them. We’re not going anywhere, but I thought you should know.” That is a client. The low rate didn’t entice them; rather, it was about a relationship they had with a company.
The truth is that I don’t buy coolers from anyone else. If I did, I would feel like I was cheating on someone. In fact, when I first saw the new company who was ripping off their entire product line and selling it for less, I was upset. I wanted to somehow help “defend” my guys!
Why did my loyalty to a company and its brand keep me from doing what I do in almost every other purchase in my life?
Some may argue that I did it because they are the best coolers out there. While I do believe that they are an exceptional producer of coolers and it is truly amazing how they manage to hold ice for so long, they are not alone in that space. Since they revolutionized cooler technology, many companies, including huge names like Coleman and Cabela’s, have brought products to market that do just about the same thing and cost less. The truth is that loyalty goes far beyond product. In the past, I have talked a lot about the fact that when we sell “product,” we are doing ourselves a disservice by commoditizing what we do. At the end of the day, whether we sell coolers or motorcoach charters, there is always someone else who does it just about as good as we do and is willing to charge less…and sometimes way less.
Loyalty that converts someone from a customer to a client is about building a relationship with the company that you are buying from. In my case, it was not about going to a factory or even ever talking to the owners. It was about feeling like the company culture was something that I could get behind. It was about feeling like they felt the same way about the outdoors that I do. It was about feeling connected.
I can tell you that this was not an accident. In fact, I’m sure it represents a big part of their intentional campaign. I have often thought about the meetings they must have had as they started to launch their coolers.
“Ok, so here’s what we are going to do. We are going to manufacture a cooler that does a great job of being a cooler, but we are going to sell it for 10 times what anyone has ever paid for a cooler before. Cool? Cool. Let’s get started.”
Imagine the looks on the faces of the marketing and sales teams!
In our industry, we find ourselves constantly “sharpening the pencil” to try to whittle off a few percentages here and there to compete with our local market on price. I did it when I sold charters because that is the way it was done. But the truth is, it doesn’t need to be done that way.
So how do we take the lessons of a wildly successful cooler company who has transformed millions of people from cooler customers to hardcore brand-fanatic clients and put them to work for our charter businesses?
The first and most important step is to realize that price is not the ONLY motivating factor when it comes to people choosing a transportation company. Often a relationship is worth far more than a few hundred dollars. Next, ask yourself what you need to do to actually have a relationship with your customers. If you have high value customers, what do you need to do to make them a client? Is it going to meet with them, thanking them for their business, and asking what you can do to be a better provider? Is it taking them to lunch and talking about their kids? Is it sending them a thank you card?
Whatever it is, do it, and do it consistently.
Next, look at your company culture. Is everything you do, from social media to invoicing, representing your company in a light that will entice people to be your client? Or, are you just an easy, inexpensive company to buy things from? Think about ways to better engage with your customers about things they care about. Make them feel like they are part of your family, and that you want for them what they want for them.
I imagine that when Yeti came to market, the big players like Coleman and Igloo were sitting around laughing at a company who had the audacity to think they could sell coolers for such outrageous prices. It is not hard to believe that companies who had competed on price for so many years would have thought that the folks at Yeti were off their rockers. Today, both companies have coolers that compete with Yeti’s performance, and yet again, they are trying to compete on price.
We, as an industry, offer a remarkable product. We offer safety unmatched by any other mode of transportation. We are better for the environment than any other group transportation solution available, and we are priced at a point so far below our competition that it is almost humorous.
It is time that we embrace the fact that the way that it has always been done is not necessarily the way it will be done in the future. There is a groundswell of emerging energy that is going to change the way that we market our products to the buying public in the motorcoach industry. The future is bright and when we look back, we will see that this moment was the beginning for those companies who chose to become the Yeti of the motorcoach industry.
Customers pay the bills, but clients are our future. Look at your company and see what you can do to turn more customers into clients and you will find a brighter, more consistent, and sustainable future. Having more clients will also open more doors, including the ability to better control pricing and help set the ball in motion for selling more charters, to more people, for more money!