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  • Aspire » Customer Service

    29 Feb

    satisfied-customer

    We talk to business owners a lot about how their business is doing – and most of the time that conversation centers around revenue or profitability. And while that’s great…your financial metrics are important but they really don’t tell the whole story. It’s possible (and actually fairly common) to have good financial metrics and have an unhealthy or risky business. That’s why the Value Builder approach is so useful – Value Builder looks at 8 key drivers of the value and health of your business. Financial Metrics are just one of those drivers.

    Another equally important metric that you should be thinking about on a regular basis – especially when it comes to your ability to scale your business – is Customer Satisfaction.  Intuitively it makes sense that Customer Satisfaction is important – you might have a great business model, strong financials, a great marketing plan and strong operational metrics, but if your customers don’t actually like you or your product very much you’re not going to last very long.  Even if you’re just average in Customer Satisfaction you’re going to have a hard time growing the business.

    But how do you know if your customers are happy? Most business owners assume their customers are satisfied – maybe that’s based on a gut feel they get from talking to the sales team, or it’s from anecdotal emails or online reviews. All of those things can be interesting feedback – but they don’t actually tell you, in a statistically valid way, what your Customer Satisfaction or Customer Loyalty really is.

    How do you determine Customer Satisfaction?

    How do you really quantify Customer Satisfaction? That’s the question that struck Frederick Reichheld back in the early 2000’s.  Back then, a lot of large companies were using really complex surveys or combing through customer retention data but there wasn’t an easy or conclusive way to look at Customer Satisfaction or Loyalty that correlated to growth and referrals. Through substantial research over the course of a couple of years, Reichheld and his team finally identified what he called The Ultimate Question – one simple question that strongly correlates to tangible business success and growth. Here’s the question:

    “On a Scale from 1 to 10, how likely are you to refer this company to a friend or colleague?”

    The answers to this question fall into 3 categories (also part of the statistical research). Answers between 1 and 6 are considered to be Detractors – people who aren’t going to say nice things about you.  Answers of 9 or 10 are your Promoters – those customers who love you and are actively out telling people how great you are. To pull it all together, Reichheld realized you needed a simple way to look at the data.  His solution is what’s known as the Net Promoter Score – a single number that can give you a strong, statistically valid answer (especially if you trend over time) of how your customers actually feel about you and your prospects for growth.

    The Net Promoter Score is easy to calculate – it’s simply the number of Promoters less the number of Detractors.  Let’s say you survey 100 customers and 40 of them are Promoters and 15 of them are Detractors. Your Net Promoter Score is 25  (40 – 15 = 25).  If you want to learn more about Reichheld and his process for figuring this out – here’s a link to a great HBR article: The One Number You Need To Grow

    What does this actually mean? What’s a good score?

    Every industry is different (as an example, phone and cable companies don’t tend to score very well), but the overall average Net Promoter Score (NPS) is around 15. Really great companies (think Apple, Google, etc.) score in the 50’s or higher.  Eventbrite – the online ticketing platform is notable because they’ve focused their entire growth strategy around promoters and improving their NPS.  They score close to 90, which is a big reason why they’ve received a lot of venture capital money and strong valuations over the last few years.

    How are you tracking customer satisfaction?

    When’s the last time you formally pulled together actual data on customer satisfaction for your business?  If it’s been awhile…or more realistically if you haven’t actually done it – here are a few ideas that might be helpful:

    * Use the Net Promoter Score concept and question – it’s easy, it’s used by most of the Fortune 500 because it works and you can quickly get useful data.

    * Frequency of the survey depends on how often your customers buy from you. Generally twice a year makes sense unless your customers only tend to buy every couple of years or so (i.e. car buyers), then you probably want to cut back to shortly after they purchase only.

    * Best practices with NPS are to survey anonymously – there are tools out there that can help you with that.

    Most businesses these days are driven or at least strongly impacted by word of mouth. If you don’t have a good way to figure out what your customers are saying about you, then you’re flying blind and you’re at risk.

    Do you use the Net Promoter Score or some other consistent approach to quantify your customer satisfaction? What would it take to start tracking it? What kind of response do you think you’d get? We’d love to hear your thoughts – share them in the comments below.

    Shawn Kinkade  Kansas City Business Coach

    15 Feb

    -Customer Service is the new marketing.-

    Imagine a business where you clearly have a competitive advantage. You offer something valuable that others in your industry either won’t or can’t offer. Customers who need or want your service can clearly see what you offer is different and they appreciate that difference – they’re willing to pay a premium for it and they’re much less likely to shop around. That’s a great place to be.

    If you sell a commodity (no competitive advantage), then you default to competing on price. And that means that you’ll eventually be forced down to the barest of profit margins and customer turnover – a lot of work for very little to show for it. Jack Welch summed it up nicely:

    “If you don’t have a competitive advantage, don’t compete.” – Jack Welch

    If you’re a technology based company, there’s a chance that your superior technology is your competitive advantage – although these days it doesn’t take long for other companies to figure out how to achieve similar (or better) results if they throw some money and people at it.

    Maybe you’re lucky enough to have a really strong patent or some kind of substantial geographic advantage that others would struggle to match – good for you, but that’s likely a very small percentage of all the businesses that are out there.

    For everyone else, all of the ‘main street’ businesses, all of the service businesses – there is one competitive advantage they can create…even if the product or service they offer is essentially the same as others in the marketplace.

    They can offer real, tangible, great customer service.

    I know what you’re thinking – we already offer great customer service…but do you really?  Think about it. Almost every business will claim they offer great service but start asking around and it won’t take long for you to hear an overwhelming number of customers say they consistently receive lousy customer service from all sorts of businesses. Obviously both of those things can’t be true – and at the end of the day, the customers get to decide what great customer service actually is.

    A local example of great customer service as competitive advantage…

    I had the chance to hear a local business owner share the story of his 2 year old start-up. He’s created a Wireless Internet Service Provider – basically he’s delivering internet capabilities to homes and businesses in a specific geographic area. The technology he’s using is good, but it’s not anything that others couldn’t use and it doesn’t offer a substantial difference in terms of customer experience…from the technology alone.

    What does offer a substantial difference in customer experience is how he’s chosen to roll out his service. His approach has been simple: Give the customers what they want. Here are some of the ways he’s doing that:

    • Responsive and timely service: Customers can call at any time and get an immediate change to their service levels (connection speed).
    • Responsive and timely installation: His teams won’t work in the dark, but outside of that they’ll work around your schedule – weekends, lunch, whenever it works for you…and if the delay is more than a day or two, they’ll figure something out.
    • Lots of options: He’s created virtually every tier of service you can imagine, and if you still need something different, he’ll work out how to give it to you.
    • Local call center: When you call them, you’ll speak to someone who’s local to your area and who’s empowered to help you.

    With this approach plus an overall culture of customer focus, this new business is growing very quickly, keeping it’s customers and charging a reasonable premium.

    If you’re reading this article, then you’re getting internet service from someone – phone company, cable company, mobile provider, etc.  Think about the last time you had an issue with your internet service…and the experience you had dealing with it. I know in my case, it started with a 60+ minute phone call and 2 visits (not at my convenience) out to my house and I’m still not thrilled with the outcome.

    The bar for great service is really low when it comes to Internet Service Providers – the but reality is that’s true for almost all industries. We’re swamped with bad service at every turn and if you can offer a quality option and include great service…you will have a strong competitive advantage.

    How about your business?

    When’s the last time you did a customer survey and found out what your customers think of you? Are you receiving any complaints?  Is there any way for your customers to easily let you know what they think?  Are you getting consistent referrals from your customers?  What do you do (if anything) to ‘Wow’ your customers on a regular basis?

    Great customer service isn’t rocket science, but it does take a specific focus and effort, and a culture of service to really make it work. Is great customer service a competitive advantage? Are you experiencing it?  We’d love to hear your thoughts in the comments below.

    Shawn Kinkade   Kansas City Business Coach

    15 Dec
    photo by Axel Buhrmann via Flickr

    photo by Axel Buhrmann via Flickr

    I suspect I’m not alone in this, but I hate car shopping – in my experience the stereotype of a used car salesman generally runs true, overly slick hard core salesman who is pushing you to buy something that may or may not work out for you. It’s kind of like gambling but with people you don’t like or trust…and there’s no upside. The best you can hope for is that you don’t get screwed too badly.

    And the experience is usually pretty painful – from the ineffective but still annoying ‘negotiations techniques’ to lots of waiting and painful paperwork. We actually had one dealership hold our current car hostage when we took a test drive – they were trying to force us to keep their car overnight…and didn’t want to give us our car back! And unfortunately that’s just one example of many over the years of bad car shopping trips.

    With that background, it was a pleasant surprise this weekend when we had a positive shopping (and buying) experience with King’s Auto in Overland Park. We were in the unfortunate situation of having to replace a car that we’d only had about 6 weeks – our kids got rear-ended leaving school…luckily everyone will be alright (some hobbling and soreness for a while) but the car was totaled – leaving us in need of another shopping trip. Thankfully this one went about as well as you could hope for – we don’t pick up the car until next week, but I’m optimistic that we ended up with a car that will work out well for us.

    What drives a positive car shopping experience?

    There were several things that Kings Auto did to make it a positive experience – and many of those things would apply to most businesses – as you read through this, are there things here you could apply to your business?

    1. Positive Reviews online

    We started our shopping process the way most people do these days – we went online to see what we could find. I ended up on Cars.com and came across several vehicles that fit our criteria that were nearby at Kings Auto – and then I checked out the Cars.com reviews of the dealership which were overwhelmingly positive – which made me comfortable with the idea of checking them out in person.  *Note – I later found some negative reviews on Yelp for their service and repair business but that didn’t really impact what I was looking for, which was to buy a car.

    When people find your business online, what kind of opinions do they see? How does that information impact you?

     

    2. Friendly and Positive Greeting

    King’s Auto is family owned and in our case, the owner (and his son) were the only ones there on a Saturday morning. Although it’s a fairly small lot, there were 2 or 3 other groups shopping at the same time…so reasonably busy for just 2 people to handle. Despite that, the owner greeted us warmly and asked us how he could help. His style was friendly and not pushy – he gave us plenty of room to just wander around and check things out first.

    What’s the first impression (in person) that people have of your operation? Is it warm? Cold? Friendly? Rude? Have you made any efforts to purposely create a consistent impression?

     

    3. Educational but not Directive

    Since this was a car for our kids – we weren’t looking for anything fancy and we had a definite price point that we wanted to stick to. Since we had done some research online, we were aware of a few options but the owner asked us what we were looking for and suggested some additional options. Most of them were above our price point, but it didn’t feel like he was pushing us…it was more making us aware of what else he had that was close to our criteria (on a small lot there wasn’t a lot that was under our price point).

    What’s your sales style? Do you focus on helping or on selling? Which do you prefer when you’re shopping?

     

    4. Make it Easy

    After driving a few different cars (he just gave us the keys and let us go – no paperwork at all) we ended up with one that was a good fit. The price had recently been reduced and it was in good shape. We had seen the Carfax report but they confirmed all the information without us asking (where the car came from, what kind of maintenance history it had, # of drivers, etc.). From there is was a fairly painless 20 minutes or so of filling out the required paperwork and paying (they even took Discover – which made it very easy). All in all it was quick and easy – they clearly knew what they were doing and had it down to a simple process.

    Do you focus on the customer’s experience? Have you done the work to make it easy for them?

     

    Customer Experience matters…a lot!

    There are a lot of elements to worry about in a growing business, but the top of that list should be the customer’s experience. In today’s connected world, a bad experience is easily shared and nothing will impact a business more than a bad (or great) reputation. In fact, engineering a great, consistent customer experience is probably the best marketing you can do – and yet it’s generally not done very well.

    When’s the last time you thought about your customer experience? Do you agree that it’s critical? What else could King’s Auto have done to make it a better experience? (In my opinion there are some small things, but they got the big stuff right). We’d love to hear your thoughts – let us know what you think.

    Shawn Kinkade  Kansas City Business Coach

    28 Jul
    photo by David Goehring via Flickr

    photo by David Goehring via Flickr

    Business owners are drawn to marketing ideas like a moth to a flame. It feels like the one piece they need that will finally complete the puzzle of their business.

    Great marketing is the holy grail to hungry, struggling businesses.  Most business owners have said something along the lines of: “If I just had some great marketing that would drive a ton of new customers my way, then I’d be set!”

    It’s the dream of easy living, you turn on the switch for the marketing machine and new revenue just starts flowing in and everything is golden.

    But if you’re an existing business that already has customers…and your focus is strictly on getting new customers, then you’re marketing in the wrong place. Your first priority should be to market to your existing customers.

    Why would that possibly make any sense?  Great question…I’m glad you asked.  Consider these statistics from Scott McKain’s book “What Customers Really Want

    • A Loyal customer is worth 10 times more than a new customer
    • 91% of dissatisfied customers will never purchase anything from your company again
    • Most companies spend 6 times as much money trying to attract new customers as they do trying to keep existing customers happy

    And check out some of these additional statistics from some other noteworthy sources:

    • Increasing customer retention from 10% to 15% can double revenue (Harvard Business Revenue)
    • A change in customer retention of just 5% can produce a change of 125% in profit – Frederick Reichheld author of ‘The Loyalty Effect

    Bottom line – if you’ve been in business for any length of time, the real gold mine is your existing client base. Unless you have a strictly transactional kind of business, they’re more likely to buy from you again (if they had a good experience) and they are the source of positive word of mouth (free and effective marketing).

    Quick Quiz Question

    When was the last time you thought about ways that you could ‘wow’ your existing customers and show them the appreciation they deserve?

    If it’s been more than a few months…or if your answer was ‘Never’…then it’s probably time to do just that.

    Try these 10 steps as a way to build consistent, meaningful customer service:

    1. Remember a customer is for life: You’re not processing a transaction, you’re starting a new relationship and you and your staff need to treat it that way.
    2. Little things make a big difference:  Details matter and people will notice if you smile, if you’re dressed professionally, if your business is clean, if your emails have typos. Get the little things right.
    3. First impressions count: Along the lines of getting the little things right, whatever a new customer sees first is going to set the tone, so find a way to make a great first impression.
    4. Make it a system: What ever you end up doing, it needs to be repeatable and you need to be able to hire in normal people to make it work.  Consistency is key.
    5. Train every team member: Having a system won’t help if you don’t train your team and continually work with them to improve. This should be an ongoing, evergreen effort.
    6. Hold regular staff meetings and review: Only the people talking to customers on a regular basis will be able to tell you what’s going on. Meet with the team to get regular feedback and ideas.
    7. Genuinely thank customers and invite them back:  If you really value someone, you thank them for what they did and you encourage them to come back…and you mean it!  The whole team needs to feel this way.
    8. Do the unexpected extra!: Find a way to surprise customers with great service. Go the extra mile where it will be appreciated.  It shouldn’t be a big thing (in terms of expensive) but meaningful.
    9. Deliver a Critical Non-Essential every time: Find something that your best clients value that you can give away for free. The car service that washes the car with an oil change, the restaurant that includes a surprise sample appetizer or dessert with the meal…be creative.
    10. Follow up: Make sure you have a consistent way to follow up with your customers – and the focus isn’t on selling more, the focus is on adding value (which may lead them to buy more).

    Having great customer service isn’t easy and it will cost you time and money, but that’s an investment that will pay off quickly and as noted by the statistics above, have a much bigger pay off than marketing for new clients.

    Are you doing most of the things on the list above?  Some of them?  What would it take to start doing more?

    We’d love to hear your thoughts – share them below.

    Shawn Kinkade  Kansas City Business Coach

    14 Oct
    photo from State Library of New South Wales via Flickr

    photo from the State Library of New South Wales via Flickr

    Great customer service isn’t as simple as just being nice to everyone (although that’s not a bad start).

    Commerce Bancorp (not the one here in Kansas City, the one founded out in New Jersey) was established by Vernon Hill in 1973 and went from 1 branch to 470 branches by 2008.  Even more importantly, they had a deposit base that grew 30% per year between 1996 and 2001 (vs. an industry average of 5% growth).  They were extremely successful…and they broke almost all of the rules in terms of how ‘conventional banking’ was done.

    Hill’s strategy was to flip the banking model on its head.  Be great at service and convenience and choose to be bad at more traditional banking things like offering the lowest rates on deposits and fewer products overall.  He believed (correctly as it turned out) that there were a lot of banking customers who were fed up with short hours, bad service and rude tellers…if you could get those right, people would talk and you would grow.

    But in order to deliver that great service and those convenient hours, you can’t also do what the other banks do.  You can’t pay for highly experienced financial professionals as tellers – they’re too expensive and they often don’t like working with the public.  You can’t afford to pay out the best rates of deposit and maintain longer hours.

    That’s where the first truth of Uncommon Service comes into play as documented by Frances Frei and Anne Morriss in their recent book Uncommon Service. They wrote the book after working with lots of companies around the world and observing that despite the need and the value for great customer service; very few companies actually get it right.

    Truth #1- You can’t be good at everything

    Just as we saw with Commerce Bancorp, if you really want to stand out, if you want to be great, then you also have to choose where you want to be great…and just as importantly where you don’t want to be great. The real magic comes in knowing what your customers value most and value least when you make those choices.

    If you try to be great at everything, you will either be crazy expensive or you will end up being mediocre across the board (much more likely outcome).

    Question: What are you choosing to be bad at in your company?

    Truth #2 – Someone has to pay for it

    Excellent service comes with a price – as we learned in Truth #1, part of that price is choosing what to be excellent in (and what not to be excellent in)…there’s an opportunity cost.  Beyond that, you will drive more expense as you offer more/better services – and there has to be a way to pay for that if your model is going to be sustainable.

    The good news is that payment can come from several places – you can charge extra for it, you can offer service in a way that reduces costs (think online FAQ or ordering vs. phone calls) or you can develop self-service options that customers love (think ATMs at banks, online boarding pass printing, etc.).

    Question: Where are you spending the most on customer service? What could you do to reduce that cost?

    Truth #3 – It’s not your employees’ fault

    Are there times when your customer service is great…but it’s not consistent?  Do you have some employees who get it and do a fantastic job…but for some reason others can’t seem to pull it off?  In either case – whether it’s occasional greatness or excellence from a few ‘super hero’ employees, it’s your customer service model that’s that’s the problem, not your employees.

    If you ever find yourself thinking “well they just need to try harder” after a service failure, then you’re on the wrong path. When you build in the right system and training that enables every employee to get it right, then you’re onto something.

    Question: What’s the most complex part of your service? How could you streamline or simplify that so it reduces issues and can be more repeatable?

    Truth #4 – You must manage your customers

    Customers play a huge role in the overall outcome of the service.  It only takes one really indecisive customer to hold up a line for a long time at McDonald’s.  To make it even more challenging, your customers can have just as much impact on your service capabilities as your employees, but you have no direct control over them.

    The customer isn’t always right – especially if they aren’t the right customer for you. Figure out who you work best with, design your service around those customers, educate them on how things work and then incent the right kind of customer behavior.

    Question: When’s the last time you heard directly from customers on what they don’t like about your service? Go to the source to figure out the real issues.

    It’s all about the design

    Great customer service is critical to long term success…and it doesn’t happen by accident and you can’t just rely on a handful of superstar employees to take care of it for you.  Consistent excellent service happens when you design a service model that meets your customer’s most important priorities, is affordable and can be run by all of your employees. Add in a great culture and you’ve got a lot of people talking about you…in a great way!

    How do you stack up against the 4 Truths of Uncommon Service? We’d love to hear your thoughts – share them in the comments below.

    Shawn Kinkade   Kansas City Business Coach