How One Ice Cream Shop Growth Hacked Its Way to Success
Wed, 7 Jun 2017, in Leadership
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When I was in high school, one of my early stints in the working world included helping out in a small ice cream shop while I was staying with my grandparents.
A small, mom-and-pop place, it really came alive during the summer. One strange thing about our store was that there were no cash registers, just a money drawer and a calculator. We had numerous “cash only” signs, including two at the counter and one in every window and door. That’s in addition to signage on each side of the store.
Some people (especially those who weren’t regulars) routinely expected to pay with a credit card because they didn’t have enough cash on hand. Most had no issue with going to the ATM outside the store, but some were annoyed that they would be charged a fee.
Our boss took the unusual practice of giving ice cream for free to the odd customer without enough cash on them – something that confused me at first. Yet for the short time I was there I constantly saw people coming in just to put money into the tip jar, leading me to think this is how they were paying for previous purchases.
Until that moment, I’ve never witnessed this level of customer service before. After all, this small ice cream business could be losing money especially if others caught wind that free ice cream was being given away. To my surprise, this wasn’t the case and our sales were growing steadily.
With so many businesses failing due to risky managerial decision – why did this strategy work? Perhaps my boss knew more than I cared to admit.
He understood what made customers unhappy.
We certainly took note of what customers were doing in our store. If they didn’t have enough cash on them they felt let down and looked disappointed.
Still, the decision to let customers go without paying wasn’t a popular one. As a result, there were some objections, since other customers (ie. those standing in line) could interpret this however they liked. This could mean a drop in customer confidence, and by extension, sales.
Ultimately however, this was a decision that had to be made because my boss understood what set of behaviors his customers were looking for (convenience and a sense of trust). He also understood something else.
In a fast-moving, technology-saturated and rapidly changing business climate it’s difficult to accurately predict customer sentiment. Even if you have all the information needed to make an educated marketing decision based on past experiences and future intent.
He didn’t assume or jump to quick conclusions.
It would have been logical for us to insist that customers pay for their ice cream no matter what. It would also be fair to assume that no one would object to this, either. Yet making the opposite decision is what actually led to a boost in sales at our store.
Companies that know how and when to use the wide array of research tools available today have a big competitive advantage in generating insights that lead to growth.
So while you’re developing a understanding of what behaviors customers want, inconsistent customer perspectives amidst a fast-moving market, new technologies, and rapidly changing business models can make it all too difficult.
When Tropicana wanted to introduce a new look to their “orange with a straw” orange juice carton, they invested in a large redesign campaign complete with customer outreach, focus groups and surveys. In the end, sales plummeted so much that Tropicana quickly reverted back to the old design without so much as a word.
By contrast, Unilever took a different approach. Before launching their TreSemme shampoo line, they heavily researched online beauty communities to figure out their habits, lifestlyes, daily routines and issues associated with hair care. Due in part of this research, the shampoo was a success and eventually rose to the top of the US hair care market.
He used information his customers were already sharing.
While we could live without a credit card machine, we couldn’t skimp out on our website. There were three reasons for this. Firstly, virtually all businesses are already online. Second, today’s customers prefer to look at a brick-and-mortar’s site before visiting them in person:
- to find out whether you carry a specific item
- to look at prices of your products
- to get in touch with your business
- to check your hours or location
And third, a website gives you an opportunity to gather data on these customers. Online data when matched with store activity can help you make better marketing decisions and improve communication with customers:
Keep track of their phone number and email. Phone numbers can be input into the CRM system and associated with previous customer engagements to anticipate behavior better. This can result in more appropriate messaging and marketing to customers.
Connect on social media & monitor engagements. Make a note of what customers (or fans of your product) engage on social media, leave reviews and share your content with their followers. Then reach out and show your appreciation with gifts, coupons, etc.
Offer suggestions wherever possible. If you can suggest a solution based on the information you know about your customers, do it. Our store could have used geotagging and order history to map customer behavior based on neighborhood, income, etc.
He never asked customers what he already knew.
In today’s world, businesses have a tremendous amount of information on their customers – and our ice cream shop was no exception.
Most customers were repeat customers, so we could tap into what they bought before, what their purchase preferences were and how they liked to communicate with us – social media, in person, etc. Besides, our loyal customers wouldn’t object to getting push notifications of the latest specials (or new flavors) as soon as they came out.customers are willing to share data, but are you giving them in return?
Indeed, if that’s what it took for customers to get their order how and when they liked it, some level of data collection would be welcomed. And it’s not hard to see why:
We’re all constrained by time – and everyone’s accustomed to this fact of fast-paced life. True, customers expect quick (and sometimes near-immediate answers to their questions) and companies are pressured to deliver.
Yet it’s easy (and deadly) to focus your time, energy and capital on something that doesn’t make any significant progress or financial sense. A prime example of that is asking customers for information you’re already aware of.
The hidden power of trust and loyalty
The majority of businesses spend a lot of time on focus groups, interviews and use all kinds of tactics in hopes of attracting customers. Yet few consider how trust and loyalty can override behaviors uncovered by lengthly CX research campaigns.
Businesses forget that the primary goal of their customer success initiatives should be to add value to the customer as well as the company. This sometimes requires constant change, iteration and adaptation. The first step however should be all about identifying the ideal experience you want your customers to have – and work from there.
Even if you don’t take credit cards.