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Are you really listening to your customers?(Credit Column)

Business Credit

| June 01, 2004 | Colombo, George | COPYRIGHT 2004 National Association of Credit Management. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan.  All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)Copyright

You may think that you're listening to what your customers have to say but, if you're like many business owners and managers, what you aren't hearing is hurting your ability to provide first-rate customer care. Let's take a look at how a couple of entrepreneurs listen to their customers and you'll see what I mean.

Our first entrepreneur owned a boutique that sold upscale women's clothing. Terry wanted to establish a brand name and identity tot his store in anticipation of creating a national chain. He knew how he wanted to position his chain in the marketplace and believed that his selection of merchandise would be critical to his success. To his credit, he spent a great deal of time in the store getting a feel for which fashions were hot and which were not.

Two or three times a week, however, a customer would ask him if he carried lingerie. He'd explain patiently that he didn't carry lingerie and then recommend a store in the area that did. Terry got frustrated with his customers' apparently endless interest in lingerie. "If they want lingerie," he'd sigh, "they should go to Victoria's Secret." Apparently, they did. Terry never opened a second outlet and his vision of a national chain of upscale shops died when he shut his store only two years after it opened.

A different approach to listening is demonstrated by Sonny, an entrepreneur who focuses on specialty software. Developing software can be risky and expensive, especially for a small company. Sonny, however, established an enviable track record over the years. He almost never released a product that was poorly received.

Sonny's secret for success was simple but audacious. Rather than investing money in speculative software development, Sonny would produce a mock-up package for a product he was thinking of introducing, then show it around to buyers at the handful of distributors that dominated the industry. If he couldn't get enough orders to cover his development costs, the product idea was quietly shelved. Sonny would make some sort of plausible excuse to the distributors, cancel outstanding orders for the never-finished software, and move on to another more promising project.

So, which entrepreneur do you think was listening to his customers more effectively?

The Science (and Art) of Listening

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Source: HighBeam Research, Are you really listening to your customers?(Credit Column)

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