Customer Service

The 4 most important words in business: How. Can. We. Help.

This firstly applies to our people. (Yes, our people first, customers come next.) If we are constantly asking how we can help them do their job; provide more training; deal with a customer situation; provide better service; improve communications, we will have a group of people who know we’ve really got their backs. And, as Tony Hseih the renowned CEO of Zappos famously said, “You can’t provide good service from unhappy employees.”

Asking the right questions and then listening to what is said (and meant) is the first step to a workplace where our customers will receive the very best service.

Making these four words a mantra for our people to be asking our customers will provide the same level of response. It’s simply not good enough to assume we know what the customer needs; in many cases, if we are providing the answers, we are better placed to provide the answers than the customer. It’s a matter of asking the right questions.

To understand the customer requirements, we need to have a complete understanding of the problems that the customer is experiencing. Only then can we have any chance of providing a solution.

The third group within our business relationships where these four words are appropriate is that comprising our strategic alliances – those providing us with a service – suppliers, consultants, financiers, advisers and accountants. If we’re asking them this question, they will provide us with information that allows us to do the same in return. The outcome will be that they will be of greater benefit to us and our business.

By encouraging the use of these four words at every opportunity internally and externally, our businesses will be the better for it.

Now, How Can I Help?

What makes a great rural town, if not its community?

Here are two stories I have heard today, relating to how communities work – or don’t – in regional Western Australia.

The first is a sad story; one that I was surprised to hear. There’s a butcher in a wheatbelt town, operating his shop for some years and a strong community supporter. Across the road is the local IGA store and for years, they did not directly compete, each allowing the other to specialise in their respective markets.

Recently, and apparently out of the blue, the IGA owner decided to compete directly with the butcher. The previously reasonably strong relationship has become (perhaps, not surprisingly) toxic and it threatens to divide a community. This move is a threat to the livelihood of the butcher. The impact of this business strategy has the potential to affect families, local sporting clubs, the vibe of the town and the community at large.

This is the world of free enterprise and I would certainly not advocate any means to legally enforce the IGA manager to change his ideas. However, I would appeal to the community to remember that this is not about the comparative price of a lamb chop; it’s about all the elements that comprise a community.

Is the community going to be better or worse off with open warfare by two businesses?

And will it be better off if one is forced to close?

 

I described this situation to another butcher I happen to know who, in the past, operated a shop in another town not too far away from the previous one.

They had an almost identical scenario – but for one notable exception. In this case, the IGA manager purchased his meat from the butcher at full retail price and sold it frozen. He then added a margin for the “convenience shopper” who would usually be buying out of normal hours.

His IGA masters said they wanted him to sell meat, and buy it from IGA. He refused. Other IGA’s were going into fast food, making pizzas. He did not follow suit. That was the domain of the local café. The café owner purchased pizza meat from the butcher. They all supported local sporting groups.

My butcher friend’s wife recently went back to that town. “It’s still a pleasant place to go back to”, she said. “After 10 years, I still get smiles and hugs!” And all the shops that existed then are still open today.

Which town is a better place to live?

Which has the stronger community?

Some pitfalls exposed in a quickly scaling business

 

Businesses that take a decision to grow (“scale” is the current preference) also take on the associated risks. It is widely acknowledged that uncontrolled growth is a leading cause of business failure, so that particular risk is heightened where there is a lack of meticulous cash flow management.

However, a recent example within a client’s business exposed another risk that, in this case, was not anticipated. The business has been on an expansion program over recent years, both vertically and laterally. It was growing within its existing business model and, at the same time, introducing a number of additional services.

While careful cash flow management was ensuring the finances were in check, some cracks were appearing within the management structure. A senior manager was experiencing stress as what she perceived the requirements of her position appeared to be getting out of control.

One of the major failings was that of not addressing the changing requirements of the position as the business expanded. Assuming every position within a business has a Position Agreement – or any similar label to clearly detail the specific requirements and expectations of the position – then regularly reviewing such an agreement is also vital.

These types of agreements (more commonly referred to as Job Description, which in my view, do not provide a sufficient level of clarity) are either absent, unclear or out-dated in many small businesses. This leaves the business vulnerable, as the holder of positions become disenchanted as, over time, their changing role bears little resemblance to the one for which they were original engaged. This growing frustration (exacerbated where there is an inadequate communications structure) can lead to conflict and even resignations.

In the case of my client, he was sufficiently perceptive and a willing communicator as to be able to address the issue at hand. It has provided both he and his senior manager with opportunities to discover much about their respective strengths and to align those strengths with job role requirements and the business structure. Along the way, they have also discovered the power of self-awareness in dealing with such circumstances.

In the meantime, once the roles are clarified, they will introduce a review process whereby all positions are re-examined on a regular basis to ensure they remain relevant.

Net Promoter Score: A great system badly weakened in the hands of poor execution

 

“On a scale of 0 (being highly unlikely) and 10 (being very likely) how likely are you to recommend our product/ service to a friend or colleague?”

That was “the Ultimate Question” Fred Reichheld posed when he wrote the book of the same name. And, of course, he was right; what other question could be more important? Especially when its supplementary question was added: “What was the reason you gave that score?”

By asking the question, the enquirer immediately gauges the success (or otherwise) of the quality of the service offering, understands the elements that are appreciated by the buyer and gets immediate feedback on elements where they are disappointed. The latter provides an opportunity to examine these areas and to make changes that will ultimately improve the score.

Fred Reichheld’s theory went on to propose that those that scored the business 9 & 10 were likely to be “net promoters” of the business; people who would recommend the business and become evangelists. Scores of 7 & 8 indicate that customers were ambivalent as to the service (called “passives”) neither promoting it, nor being particularly annoyed. On the other hand, customers giving a score of 6 or below, were likely to be detractors of the business, actively denouncing it.

The idea, of course, is to explore how customers feel and what the business needs to do in order to create a greater number of evangelists for the business. The benefits are enormous, especially when considering the reduced cost of advertising – when you have huge numbers of net promoters, you don’t need much in the way of costly direct advertising.

You might well have heard this question asked, as there are a number of high profile corporations using it in Australia.

Except they are not. Well, not using it as it was intended.

Two that I have come across are Bigpond and Westpac and neither “close the loop” as the system suggests for its most beneficial outcome. This part of the process involves contacting the respondent, thanking them for their response and asking details of how the problematic area of the service affected them and how it might be improved. This shows a genuine concern and a sincere effort in improving service delivery.

In the instances I have encountered, neither organisation came back to me to find out the details of my concern. As such, the whole systems fall flat, leaving customers and employees alike, even more disillusioned.

In fact, in the case of Westpac, employees’ Key Performance indicators (KPIs) are apparently attached to the Net Promoter Score they receive from customers. Employees hate it! Furthermore, a customer recently told me that they received a call from the Westpac employee belligerently asking “Why didn’t you give me a 10?”

The system has apparently been implemented without the engagement and full understanding of employees. To add insult, there is no closing the loop – customer feedback does not seem to be sought – and certainly not heeded. Under these circumstances, both employees are put offside by a system that, used as intended, goes a long way to improving customer service, customer loyalty and a more profitable business.

When I quizzed Fred Reichheld on this issue, he agreed that linking customer feedback scores to front line compensation can a big mistake. He expressed the wish that more firms would focus more closely on closing the loop quickly and effectively—especially with detractors.

On the other hand, there are many business that are examples how it works well. In the US, Apple, Allianz Insurance Group, Zappos and eBay are just a few that attribute growth and astute customer awareness to the use of NPS. OK, these are all big companies and they commit an enormous investment to the program. However, the principles of the system and the philosophy behind it are equally applicable to smaller businesses and, in many ways, it is simpler to execute at the smaller end.

Net Promoter System (Score) is a great tool and one that should be considered by all business owners. It is just a great shame when some of our corporate leaders in Australia do not use the system as intended. And this has the potential to trash it for those who do.

KEEPING GREAT CUSTOMERS

 

 Great customers keep coming back. Furthermore, they like your product or service so much that they tell other people. (Who buy from you and, as they also become great customers, keep coming back.)

 

Under these circumstances, who needs to advertise? Well, we all do actually, as not do so means we are taking those same customers for granted. However, our advertising, marketing and promotion can take on a far more positive slant, rather than an appeal for new people to do business with us.

 

I don't get how so many businesses get this so wrong. After so much having been written and readily available on the subject of customer service, why is customer service so poor in so many places?

 

The "Golden Rule" of life is that we should treat people as we would like to be treated. THIS SHOULD NOT BE HARD! Often, when business owners are confronted with evidence of poor service, they blame employees.

 

But wait! See how this all ties in with recruiting and retaining great staff? You can't provide great service from unhappy staff. A sound recruitment process and ongoing staff engagement are the first and second legs of customer service; without them good service is bound not to happen.

 

In his book "The Ultimate Question" Fred Reichheld introduced "The Net Promoter System". First, the ultimate question: On a scale of 1 - 10, what is the likelihood of your recommending our product or service to a friend or colleague? (You may have been asked this by representatives of a number of Australian businesses who have adopted NPS. Unfortunately, few of them seem to follow it through and “close the loop” as recommended by Reichheld.) When you think about it, what else needs to be asked – other than his recommended follow-up question: What is the reason you gave this score?

 

In defining Net Promoter, Reichheld says it is only those who give a score of 8, 9 or 10. Below 8, they are ambivalent, and below 4, Net Detractors!

 

This provides business owners with information on how well (or how poorly) their business is performing from a customer perspective, and why. From this point, the NPS can be measured on an ongoing basis, details of customer feedback can be gained and improvements made. Simple and effective.

 

A number of extremely successful business have, in fact, based much that success on the implementation of NPS. Employees are asked about their positions within the business – and in some cases, the ONLY answer is "my job is a Net Promoter of......".

 

It does not matter what position a person holds in a business; at some point they come into contact with the public and have an opportunity to promote the business. As Dan Pink ("To Sell Is Human") says, "we're all is sales, now". No-one is exempt from selling the business which employs them.

KEEPING YOUR PEOPLE GREAT

 

Following on from my recent blog on recruitment ("Getting Great People") is the issue of retaining those people and encouraging their growth as they help you grow your business. It's most often referred to as "engagement".

 

We talk about engagement, but often, I fear, don't full grasp what is involved. Statistics out of the U.S. and Europe (I am not aware of any such surveys having been conducted in Australia) show that only around 30% of employees are fully engaged, 50% are unengaged, while the remaining 20% are actively disengaged.

 

"Actively disengaged" means that they are so dissatisfied that they are looking for alternative positions and are probably a disrupting influence in the workplace. "Unengaged" means that they just turn up for the pay packet, are disinterested and make no positive contribution to the business. On the other hand "engaged" employees do make a positive contribution and have the best interests of the business at heart.

 

These statistics are damning. Too many employers blame the employee; but who employed them? And, having done so, who has tolerated their substandard performance? And why does the employee feel and act this way?

 

Just as the recruitment process is long and ongoing, so is that of engaging with employees. Yes, it's about communication, but it's also far more than that. Having taken the great time and effort to get the right people, the employer should have developed a relationship that deserves nurturing. People react positively to being granted a degree of autonomy in decision-making, otherwise known as trust. (The opposite scenario is called micro-managing.)

 

They also need to have the confidence that they can speak with freedom and to express opinions that will not be ridiculed. It is the job of the business owner to ensure there is a forum that welcomes such discussion. Much has been written about creating an harmonious workplace; but is an environment where everyone thinks the same (usually blindly following opinions that the owner has expressed) a good thing? Innovation, creativity and growth come from a diversity of opinions and, with the proviso that all ideas, no matter how whacky, are received with respect, this diversity should be encouraged.

 

Personal growth is another aspect that has shown to be a basis for staff retention and this means placing a great emphasis on training. More educated employees is not only good for them, it's also good for business. Training at the Container Store in the U.S. - voted one of the best places to work in that country for many years running – first year, includes full-time employees receiving 263 hours of formal training compared to industry average of 8 hours. It works!

 

Employees spend around 30% of their lives at work. Doesn't stand to reason that they want to enjoy that time? As such, they want to feel they are secure, that they have a caring workplace environment; that they are a valuable part of a team; that they can grow within the business; that their contributions are respected and rewarded appropriately and that they are part of the growth of the organisation.

 

It is the job - maybe the most important part of the job - of the employer to ensure such an environment exists, is maintained and is further developed. Again, it's great for the employees and it's also great for business.

GETTING GREAT PEOPLE

Not long ago, I posted a blog making the point that business is (always) all about the people; employees and customers - in that order. (You cannot provide good service by unhappy employees.) It starts with recruitment, however most of us (being untrained in the process and not understanding of the consequences) treat it as something that must be done as quickly as possible, taking the minimum time.

 

NOTHING is more important than getting this right. The future of our business depends on it to a very great degree. As such, we must not merely react to a need and appoint the first person who appears to fit our requirements. The process must be thorough, detailed and ongoing.

 

I could not say how many times I have heard a business owner say "I would like to get more/better people, but they're just not available."

 

Can't get the right people? You're not trying hard enough. Or should I say, you're probably not going about it the right way.

 

At this point, I must commend Jack Daly's "Hyper Sales Growth" - a text book for anyone involved in business sales. (Jack might not have written it as a text book, but it can be used that way.)

 

Daly says "Recruiting is a process, not an event. It should be ongoing and continuous."

 

Working with a client on recruitment over the past few months, we agreed on a principle: "Always recruiting". We then agreed that recruiting is actually a marketing process. The next point of agreement was the "ideal candidate" and the "target market" were actually, the same thing.

 

The starting point in this long and continuous process is to begin to make a list of potential candidates (having, of course, identified them as suitable, a cultural fit with your team and sharing your values) and then going about the process of building a relationship that will be of mutual benefit. As with any relationship, it takes time to develop trust and confidence; however with dedication to this task, a meaningful relationship will develop to the point where a discussion regarding your needs and the ideal candidate's aspirations will arise and a position with your business is appropriate. By this time, you will have been convinced that you share common values and that the team will be enhanced by their presence. (If not, the conversations will have ceased.)

 

This process may seem arduous and long–winded. However, if you're thinking this way, consider the relative upsides of having great people and the downsides of poor hiring choices. I know of a business owner who believes that poor choices have cost him over one million dollars over past years. And that doesn't take into account the effect on other staff, court cases and claims of unfair dismissal and workplace harassment. These cases may have been dismissed, but the toll on the business owner, staff and on business growth has been inestimable.

 

On the other hand, great people will enhance team performance, build on the positive culture and accelerate growth. (In fact, significant growth will not eventuate without them.)

 

Although it's 30 years ago, when I was first building what was to become my core business, I knew I had to get the right person first up, in that building process. I did not want to simply put a "salesperson wanted" advertisement in the local paper because it would attract people I would have to reject out of hand. Instead, I had the picture of my "ideal candidate" firmly in my mind and compared every person I came across for a match. It took months, but I did get that person who loyally stayed with me for a long and difficult period of early growth.

 

It's a long and ever-ending process, but it's worth implementing.

Earning respect has huge rewards

On a previous blog, I have made the statement that “whole communities would be improved if there was a greater appreciation and respect for small business”.

Of course, what goes alongside this statement is the fact that this respect needs to be earned; business owners cannot expect respect from the wider community just because they run their own business.

So, what do business owners need to do to earn this respect?

Well firstly, it’s about how they treat their customers; the respect must be mutual. No-one can expect to be treated with respect if they do not act respectfully towards others. I guess it’s another way of expressing “The Golden Rule”.

Treating customers well is actually not enough – truly listening to customers’ wants, needs and expectations is the next step along the path towards commanding respect. And listening is not a passive  activity – it requires first, asking questions of the customer. (And this must go a long way beyond, “So yer havin’ a noice day so far, are ya?”) It’s asking meaningful questions that show a real interest in solving the problem at hand; developing a relationship; and demonstrating knowledge of how the product or service can provide solutions.

This requires training along with certain attributes such as empathy and sincerity. Staff training should include what questions to pose and how to get comfortable in asking relevant and purposeful questions.

This is part of the expertise that customers respect, often subconsciously. When the customer concludes a transaction (from the business point of view we hope that this is temporary and that the customer will return) the major indicator will be how they feel. If they feel that the interaction (whether it concluded as a business transaction is irrelevant) was one where they felt they were respected and that there was a genuine interest in their requirement, there is every likelihood they will tell others and that they will return. (After all, unfortunately, this will have been an exceptional experience rather that the norm.)

In summary, the requirements of good customer relationships that produce respect include:

  •  Courtesy
  •  Respect
  •  Sincerity
  •  Genuine interest, and
  •  Product knowledge.

If business owners were to commence a program that developed these attributes, they would be going a long way towards ensuring their business was respected within its community. And if enough business owners did the same, the whole community would be a better place.

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What John Matthew believes about small business

That the owner has risked many things that others take for granted;

That there is no guaranteed income or reward for the considerable effort that is required;

That often, the family home is on the line to support the business and its constituents;

That there is a dignity and self-respect that is earned;

That entire communities would be better places if there was an increased appreciation and respect for small business.

About John | Send me an email