March 1, 2014
Build a blue chip clienteleBY ROD McDONALD
In 1980, I had a customer who was most enjoyable to chat with. He was a Chartered Accountant for a national accounting firm and he had worked with many businesses, of all sizes. I asked him, if there was one piece of advice that he would offer to any and all, what would that advice be? Without hesitation his response was: “The first rule of business is: Know who you are doing business with.”
His advice was a simple, well-known adage. Those who do not appreciate the implications of that simplicity are headed for trouble.
By the mid-‘90s, I was quite well established. A young man requested a meeting with my greenhouse manager and me. He showed us the blueprint for a new greenhouse he was planning to build, south of town. We asked about his financing and he assured us he had all of that secured. His mission that day was to sell us bedding plants for the next spring. Fair enough. He offered us a price that was thirty per cent below the norm. We asked how his price could be that low. He offered us some insights into his business plan and his math was greatly flawed. We tried to explain his mistakes and suggested he needed to adjust his price upwards, if he wanted to stay in the trade. We were trying to help a new and inexperienced person to find his way, nothing more.
Arrogance is the most costly of any attribute that we can possess and he was not the exception. He did not want advice from us, only a signed agreement to purchase bedding plants. When both of us hesitated, he let us know that we did not have long to decide as one of our competitors had already booked ten thousand flats! He thought that statement would get us to move quickly. He was surprised, perhaps even shocked, when the greenhouse manager said, “Sure, you can sell plants to him but how do plan to get paid?”
A wave of confusion came over his face. I joined in, explaining that his potential customer rarely paid his bills and that there were many suppliers who would not ship to this man any longer. It was true. And the first rule of business is to know who you are doing business with. He was about to learn that number one rule to a depth that he would remember for the rest of his life.
Know who you are doing business with applies not only to suppliers, subcontractors and bankers, but also to customers. Not all customers are created equal. There are some who will never allow you to make a profit, not even a nickel, off of any sale. You do not want those people as your customers.
As a young man, starting out in this trade of ours in the late 1970s, I truly believed that all customers were created equal. I would accept every request for a landscaping estimate and I would always provide estimates to those who called first. I never gave any caller priority over another. I was young and still in my egalitarian phase.
After a few years of this equality, I grew weary. I realized that there were neighbourhoods where I would have to prepare a hundred estimates before I got even one sale, and then there were other neighbourhoods where I sold eight of ten estimates. The math slowly sunk in and I became a percentage operator. I suspect the second rule of business might be (with apologies to the Dilbert cartoon character): Learn to work smarter not harder.
I started giving priority for estimates to past customers, their neighbours, friends and relatives. I also gave greater priority to those neighbourhoods where I had had my greatest success. I learned the importance of screening potential estimates and the longer I stayed in the business, the better I got at carrying out that task.
My best advice I can offer anyone as to screening estimates is to choose your words carefully. You never want to sound as if you are running an inquisition. My standard response to a request was to say, “I am always curious as to how people have heard of my company so that I can better spend my advertising dollars. How did you hear of us?” They would volunteer their answer, and if it was, “I was just going through the Yellow Pages and calling everyone,” well...you know the priority position that response received.
I would often test out a caller by listening to what he wanted carried out and then give him a rough range of the cost. This rough cost would either confirm or deny if we were on the same page. Those expecting something for nothing quickly revealed their hand.
If you operate a quality greenhouse, garden centre or any other walk-in retail operation, there are certain things you must do in order to build a blue chip customer list. First, your operation must give the appearance of being a good place to do business. Dirty, unkempt businesses that are held together with duct tape and binder twine are not apt to be gathering places for customers who qualify as blue chip. Quality customers enjoy shopping in clean, organized places with lovely displays. Bargain hunters do not care and are driven by one thing: low prices.
There was a well-known law firm that had a waiting room with mahogany panels, oak floors and receptionists who brought you a cappuccino. They had spared no expense in decorating the area. Their thinking was they wanted to prepare their customers (they call them clients) for the bill they would be receiving.
The same should apply to you. Your entrance will define who you are as a retailer. It should be readily apparent that this is a place where customers shop for excellent products and service, not two-for-one specials.
Heather Lowe worked with me for many years. This summer she visited a garden centre with her sister. She told me, “you had to walk through two inches of water to get in the front door. There was no way to avoid the puddle, it was that large. That greeting told me right away what I was about to experience inside their store, and my suspicions proved true.”
Cleanliness is not next to Godliness, it is Godliness and you had better enforce that concept in all areas of your operations. Most customers will never say anything to you about how clean your place is, but let it get a little bit dirty and they will speak up.
If you allow the bargain hunters a foothold into your store by giving them special discounts, they will be back and this time with friends, all demanding discounts. You have now trained a group of people to haggle with you over price. You cannot afford to do that both in time and in dollars. Your price should be your price, end of conversation.
Building a blue chip clientele requires that you serve that group of people to the point where they don’t want to shop anywhere else. Simple things such as timed deliveries (no “we will be there sometime tomorrow”) or even free delivery on large orders. Learn their names and what they like to grow. When you get in a new peony, give those peony growers on your list a phone call or text. Let them know. They will appreciate being on your call list. Everyone, even you and I, enjoy being made to feel special.
Last Saturday evening, I took my wife on a date, to our favourite lounge at The Hotel Saskatchewan. Even at our age, it’s important to go on a date (or at least I tell myself it is). We hadn’t been there for nearly a year. Our favourite bartender saw us enter. We had just been seated and there was a tall ginger ale on the table in front of me and a glass of white wine for Maureen. That is how you make someone feel special. Service is so diminished, so wanting these days, that anything that you can offer that qualifies, will be noticed and appreciated.
When it comes to an internal service motto, the one I developed was: There is nothing that you should not be willing to do for a good customer. There is nothing that you can do that is good enough for a bad one.
You build a blue chip clientele, one customer at a time. That is how it is done. They reward you not only by becoming regular shoppers, but by bringing a friend, every time they shop. I would often hear a regular customer explain to her friend how the garden centre was laid out and where everything was. The customer often knew the place as well as I did. That was a goal I enjoyed achieving.
There was a garden centre in Regina, years ago when I first began my career. They occupied the number one position. They are no longer in business, having died a slow and painful demise. The owner saw the writing on the wall but never reacted to it. He told me in 1984, “Customers are no longer loyal. You have to train a whole new group every four or five years.” This was his lame excuse for having lost a blue chip clientele. They had abandoned him for two reasons. First, his place was dirty and messy to the point that one customer called it a “hillbilly garden center.” Second, his service was nonexistent to the point that he refused to assist little old ladies by carrying out their peat moss. That is how you destroy your business.
A solid customer base, one that appreciates your operation, will pay dividends again and again. That is how you stay on the road to success.
Rod McDonald owned and operated Lakeview Gardens, a successful garden centre/landscape firm in Regina, Sask., for 28 years. He now works full-time in the world of fine arts, writing, acting and producing in film, television and stage.