By: Walmart

Earning return business

When you make client service decisions, do you weigh the cost of losing the client in your decision?

I’m talking about the hard cost of losing that client, not the often fuzzy, sometimes made up, and frequently inaccurate cost of a loss, that usually includes the 10-20 people (on average) that an unhappy client will tell after a poor experience – even if it’s their fault. While that does tend to happen, it’s this unhappy client I’m focused on, not their friends, family and coworkers. That’s the one you’re almost sure to lose in a badly handled situation.

What will it cost you if that person never comes back? Not their friends, not someone who reads what they say on Facebook, but them.

Let me describe a recent adventure at Best Buy to give you some context.

Best Buy?

A couple of months before the iPhone 5S came out last year, Best Buy (BB) had an offer to upgrade from an iPhone 4 to a 5 at no cost. The only catch, which I didn’t view as a catch, was that we had to renew our cell contract with Verizon.

We’re happy to reward their early investment in Montana cell infrastructure by remaining with them, at least until they give us a reason not to. As such, renewing was a zero friction event. More like a two free phones event.

BB has a different device insurance than Verizon and we felt the coverage was better, so we put BB insurance on our phones. The one part of Verizon we aren’t a fan of is the corporate stores, so handling all warranty/damage claims in BB seemed like a much better idea. Little did we know…

Earning return business sometimes means bending the rules

My phone recently developed a loose charging socket, probably from me catching the cord on something too many times. Near the end, I had to get creative to get it to charge. So I go up to the nearest BB store and show it to them. The guy at the counter starts the replacement process and checks their records. He says our insurance was cancelled for non-payment.

Hmm. We dig further and find that our debit card number changed in February. We didn’t think about the connection when that change occurred, and they couldn’t charge the insurance to the old card, so the cancel was legit. Unwise, but legit. After a single email to get our attention – they cancelled it.  The email went to an account that gets a lot of spam and isn’t one that I monitor, so it was missed.

While still in the store, I ended up on the phone with the BB insurance guys. Staying mellow paid off, as the agent was willing and able to reinstate the insurance without paying back premiums, setup future payments with the new card number, tweak the email address and allow us to continue the warranty replacement process.

Yes. You read that right. They didn’t even charge the unpaid months in the past.

Preserve and Protect Lifetime Client Value

The potential lose-a-client error, in my mind, was them allowing the insurance to cancel after a simple email. Are you that willing to let a recurring charge client go away? Pick up the phone, people.  One email is not enough effort.

Here’s why: Had they denied the claim, which was clearly their right, I would probably never do phone business with BB again. If they handled it poorly enough, they could have lost all my BB business.

But that isn’t what happened.

Someone is presumably training the folks at BB insurance to think about the long term and what marketing people call LCV – lifetime client value.

The question you have to ask is “Is the incremental value worth the lost lifetime client value?”

In BB’s case: Is it worth the incremental replacement cost of a phone, minus the payment of insurance premiums, to keep a BB client? I think it is, particularly compared to the cost of losing a client, perhaps forever.

In my case, it could have added up to decades of purchases by my wife and I, and perhaps our kids. I suspect that would add up to more than an insurance company’s wholesale price of a refurbished iPhone 5.

Are you thinking about the incremental cost of the service you provide vs. the lifetime client value when training your staff? You should.

Accelerated change redefines your market

Last month, Harvard Business Review’s Brad Power wrote a short piece about something software people have known for years, even if they ignore it: The rate of change is accelerating.

http://blogs.hbr.org/2014/06/how-the-software-industry-redefines-product-management/

An excerpt from Power’s piece:

I spoke with Andy Singleton, CEO of Assembla, a firm that helps software development teams build software faster. He told me the story of Staples vs. Amazon. As you might expect, Staples has a big web application for online ordering. Multi-function teams build software enhancements that are rolled up into “releases” which are deployed every six weeks. The developers then pass the releases to the operations group, where the software is tested for three weeks to make sure the complete system is stable, for a total cycle of nine weeks. This approach would be considered by most IT experts as “best practice.”

“Best practice”? Not really, but let’s continue:

But Amazon has a completely different architecture and management process, which Singleton calls a “matrix of services.” Amazon has divided their big online ordering application into thousands of smaller “services.” For example, one service might display a web page, or get information about a product. A service development team maintains a small number of services, and releases changes as they become ready. Amazon will release a change about once every 11 seconds, adding up to about 8,000 changes per day. In the time it takes Staples to make one new release, Amazon has made 300,000 changes.

While this situation is old news to software businesses and even to some non-software businesses that develop their own software, the thing you need to be aware of is that this accelerated rate of change and implementation stretches far beyond software.

You may have heard the phrase “software is eating the world“. In many cases, that’s about software disrupting and improving businesses and sometimes eliminating jobs. It’s also about technology and accelerated change in businesses that haven’t traditionally depended on technology.

This rate of change is reaching into many other niches – some faster than others. The question isn’t “Will it touch yours?”, instead the question is “When?”

Consider Amazon

You might be thinking that Amazon is a relatively new company so it was easy for them to start off producing systems as Power’s piece described. Trouble is, that isn’t the case at all.

While Amazon Web Services (aka AWS – the cloud services side of Amazon) has been around since 2006, Amazon has been around since the mid ’90s. They had to remake themselves to pull this off – but they chose to do so before someone else forced it on them.

Three dimensions

A few years ago, if you were in the engineering prototyping business, you might have a turnaround of a few weeks to a month, depending on the type of pieces you prototype.

Then one day, a 3D printer showed up on a local doorstep. Without a massive capital expense, delay and shop build out, a local engineer could now start turning out prototypes your clients could touch and feel in hours or for larger items, a day or two.

Perhaps you can work with that person to partner on projects and you both win. If you don’t, who will?

You can have a 3D printer on your doorstep tomorrow. What makes you different from the lady down the street who owns one?

The choice

Today, you probably have a choice in the matter.

You can either determine what needs a remake or restructure and make those changes (and experiments) on your terms, or you can wait and let someone else determine the time frame and terms for you. Most of us would prefer not to have someone else calling the shots.

I know, you’re busy. You’ve got this fire and that fire to put out. You’ve got soccer games to get to. I get it. I have those too and so do many other business owners.

It might be hard to justify any sort of disruption, even in thought, if your business is humming along on all cylinders right now.  That’s exactly what the disruptive businesses want. Keep doing what you’ve always done, because it’s still working.

Meanwhile, someone out there is fighting the same fires, perhaps as their business hums along, and all the while, they’re restructuring their business for this new reality.

What if they’re in your market? What if you did it first?

Consistency drives word of mouth business

Last week, my wife and I went to a place we’d been looking forward to for some time.  Our 31st wedding anniversary dinner was the perfect occasion to try a new (to us) place, so we went to a local Cajun restaurant whose entree price ranking is $$ and name includes “Orleans”.

Long time readers know I rarely name poor performers. I’ve made note of the theme, price range and part of the name to set the expectation you’d expect to find there.

Expectations vs. Reality

The combination of Cajun, $$ and Orleans implied white tablecloths, a Bourbon Street vibe / atmosphere and good Louisiana cuisine prepared to order, perhaps with an emphasis on seafood.

The menu’s broad selection of Cajun seafood dishes nailed that, but expectation delivery faded from there. There was little to tie the ambiance to New Orleans. The table settings resembled something you’d find in a pizza joint. This created a bit of disconnect with the pricing, menu and the restaurant’s name – which implied fine Bourbon Street dining.

Despite arriving at about 7:00 pm on a Wednesday, the place was empty. Warning bells went off, but we figured we’d give it a shot anyway. After being seated, I noticed the floor was filthy. It seats 30-35 and on a busy night, I can see how the staff might not be able to get to the floor between turns. However, the dining area has a tile floor and the place was empty except for us, so finding it consistently dirty throughout the restaurant was pretty surprising.

The chef arrived at the restaurant at the same time we did. Rather than going to the kitchen, the chef sat down in the dining area with a couple of web site consultants and discussed the menu, photos and what should be changed on their site.

At no time during our visit did the chef enter the kitchen – including from the time we ordered to the time we received our food. Likewise, neither the waiter or cook staff approached the chef’s table for guidance. I suspect that the chef has their hand in their sauces and general guidance of the kitchen, but in a place this small in this price range, I expect direct chef involvement in the food and perhaps even a table visit on a slow night in an otherwise empty restaurant.

Instead, there was no welcome, no eye contact, no thank you and no time in the kitchen. Nothing from the chef.

Speaking of empty, it was quiet enough to hear the microwave beeping just before my wife’s étouffée arrived. Despite the microwave, the étouffée was surprisingly tasty and easily the best part of her meal. Oddly enough, the waiter discouraged her from ordering the entree, so she ordered a small cup to get a taste of it despite the waiter’s recommendation.

The inconsistency returned with my wife’s Shrimp Pontchartrain entree, which turned out to be a massive platter of heavily salted pasta / sauce with little sign of shrimp.  Meanwhile, my Catfish Tchoupitoulas was very good. I’d definitely order it again.

Quality and branding inconsistencies can damage any business – even if they don’t serve food.

Police your inconsistencies

Inconsistencies plague small business and can destroy repeat business, as well as word of mouth business. The more processes, systems and training you can put in place to root out these issues, the closer your business gets to marketing itself by reputation.

Our visit included a number of inconsistencies with the business’ pricing, name, menu and food.

The menu listed numerous chef and/or restaurant honors, yet the most recent award was four years old. The years without an award stood out as much as the period of years where consistent annual awards implied high quality. If you can’t show award consistency, don’t list the award years or list them as “Five time winner”. Meanwhile, address the inconsistencies that caused the wins to stop.

Whether you operate a three star restaurant or a tire shop, cleanliness is important. It’s a signal that a business cares and pays attention to details, while sending a message about the cleanliness of other parts of the business that you cannot see. Given the filthy condition of the dining area floor, would you expect the walk-in cooler, prep table or kitchen floor to be clean?

What inconsistencies can you address to increase repeat and word of mouth business?

By: Senorhorst Jahnsen

Busy business owners have no time for this

Last time, we spent a good bit of time talking about the need to help your staff perform their best work.

What about the stuff that no one would consider their best work, but is “work that must be done and since no one else is here to do it, I will.

Studies have been performed to determine what CEOs do during their work day – mostly to see what makes the great ones so special, productive and different from the average ones. One thing stands out: the average CEO says they only spend about 25% of their day doing what they feel is meaningful work.

Meaningful work did not include “pushing paper”, reading emails and attending meetings that they felt had no business attending.

Does that sound similar to your typical day as a business owner / manager? I believe business owners have no time for this.

Avoid strategic work

Management may unintentionally avoid strategic work by spending too much of their day doing low-value work – and often make it worse by doing it manually.

It starts by not seeking a better way to deal with tasks that we’ve always done a certain way because that’s the way we learned.

When business owners and managers make meeting arrangements or other appointments for themselves by playing phone or email tag with the other people involved vs. using a tool like Doodle that can resolve the “Sorry, I’m busy then but I can meet two hours later” problem automatically, rather than by repeatedly interrupting each person involved in the appointment.

You may also spend time opening mail, sweeping the shop and performing other low value tasks. No question, these tasks must be performed. However, are you the one who should be doing those things?

I don’t think so.

Business owners have no time

Is it not valuable to sweep the floor? To make sure the windows are clean? To open the mail? To drive to Costco to pickup a truckful of TP? To answer the phone professionally and be helpful to the caller?

Of course these things are valuable, but that doesn’t mean you have to be the one to actually perform those tasks. Your job is to make sure your systems assure that this work happens and your training makes sure it gets done the way you would do it so you have the time to focus on the CEO work that you and only you can do.

Devaluing it by saying the work is below you sends a dangerous message to your staff. It isn’t that this work is below you. In fact, if you think that, you should rethink it. It’s very dangerous to believe this work is below you, because you will eventually communicate that belief to your staff, explicitly or otherwise.

Below you isn’t the point.  The real issue is that in smaller businesses, you’re often the only one who can perform the business’ most valuable work.

Me and only me?

Exactly.

One of the ways that you can identify this work is by breaking down the work you do into two lists:

  • $10 an hour work
  • $100 an hour work

Put the work you do in a typical day / week / month into those two categories.

There’s probably work done at your place that’s between those spots, but we’re talking about the work YOU do.

Now that you have your list – look at all that stuff on the $10 an hour list. My guess is that all of it can be delegated.

Now look at the $100 an hour list. How much on that list can ONLY be done by you and no one else?

Make a new list, call it what you like – say a $25 an hour list. Everything that’s on the $100 an hour list that someone else can do to your satisfaction, even if it takes training, systems, etc – put it on that list.

What’s left on the $100 hour list should be the things that only you can do. Here’s the kicker… there’s probably a $500 or $1000 an hour list of things you should be doing but never get around to. Dangerous to let that work slide.

Review the lists regularly. Business changes and so does your work.

Next Stop?

Have your managers and senior staff take a look at this process and see what they should be working on vs. what they can delegate.

By: Keoni Cabral

Help them produce their best work

Ahhh, summer solstice. We revel in these long days of sunlight in part because we can enjoy our favorite summer pastimes after leaving work for the day.

For some companies, summer is a time to coast, or at least do little more than get by until September since so many staff member vacations are on the summer calendar. Because of this, it can feel like nothing big happens during the summer months.

For many tourist-based businesses, it’s go time.  All the marketing, prep, process / system building, cleanup and training are front and center. For others, it’s marketing / prep / analysis time.

For retail, it’s often prep time for fall & winter holidays, working on marketing calendars, orders, e-commerce updates, etc.

No matter what business you’re in and what summer does to your workload – summer is a great time to implement improvements that help your staff produce their best work. The return on investment is high and in most cases, the cost is fairly low.

Shedding TEERs

I use an acronym called TEER to describe the most common ways to improve staff performance and results.

TEER stands for Training, Equipment, Environment, Roadblocks.

Training is a fairly obvious one and includes not only skill, process and equipment training, but personal development as well.

Equipment is a great way to improve staff productivity. Have you entered a hotel and had the desk personnel ask you to pardon them for being so slow because they were waiting an interminable time for the check-in computers?

Such frustrations are reflected in their interaction with guests, and can produce mistakes because the check-in desk staff may hurry to make up for that slow computer when it does respond. If your budget is limited, update these machines first vs. that computer in the back office. The back office computer has a much lower daily impact on guest experience, despite being slow when running the nightly audit.

Environment is primarily about the space where your staff spend most of their day. It could be a desk, cubicle, home office, auto parts counter, warehouse or mechanic’s bay. Is their environment optimized for performance and quality?

An office environment can often be transformed by a second (or larger) computer monitor, regardless of the work being performed. Other spaces can be improved simply by reducing trips to retrieve tools and materials. Simple things add up. Staffers may have suggestions that they’ve been “afraid” to make. Ask.

Roadblocks are all about doing whatever you can to eliminate the things that impede progress or productivity.

Roadblocks are often connected to the other TEER components. More often than not, roadblocks tend to be situations, paperwork and processes created by management (present and former) that simply need to be reconsidered or made more efficient. Don’t be your own worst enemy.

Forgetting management

Often times, management tends to focus on personal development and related efficiency improvements and forgets to implement them beyond the management group. This can lead to an undesirable disconnect in culture. TEER can produce solid value for management just as it does for your staff.

Do your senior managers get training to improve their skills and productivity, but not middle managers? What about the reverse? While management may not need the same training as their staff, the need is still there at every level.

Likewise, the equipment that managers use may be different then that of their staff, but better (or additional) equipment that makes them more productive is just as valuable. I mentioned the benefits provided by a larger or additional monitor earlier, which can provide equally strong improvements for managers.

As with other areas, a focus on managers’ work environment may or may not match the environment concerns of the staff, but it’s just as important. Changes to reduce interruptions, lower noise levels, or provide standing desks and/or better chairs can make a serious difference in work quality and health.

Healthier people do better work because their health issues aren’t a distraction. This doesn’t mean getting rid of folks with health issues, it means helping them deal with them where possible – and it isn’t always about physical health.

For example, when someone whose work is repeatedly interrupted suddenly has that situation improved, the change is more than about productivity.

Finally, do managers have their own roadblocks? Absolutely.

What improvements can you make to help everyone work better?

By: Paul Miller

Even black cats need a reason why

I didn’t do a Friday the 13th promo yesterday. Did you?

In my case, I didn’t get a promo out despite a monthly reminder on my calendar. Yes, every month a week or so before the 13th, a recurring reminder prompts me to check if there’s a Friday the 13th that month. This month, there actually WAS a Friday the 13th, which is a great time for a promo tied to the “holiday”.

I do this and recommend it for my clients for Friday the 13th and other oddball “holidays” because they’re a reason why, even if it is a quirky one. You can always craft a unique story between a product or service and almost any normal or oddball/unusual holiday. For that matter, you can make up a holiday that’s all yours. It isn’t like you’d be the first to do that.

A reason why

Before we do that, let’s go back to the business reason for doing this in the first place: A reason why.

There are all kind of reasons to do a promotion, but they are more productive if there’s a reason behind them – even if the reason is downright silly.

A few years ago, a Baltimore business had an 11% off sale after a snowstorm dumped 11 inches of snow in the area. The online business hadn’t slowed since snow didn’t disrupt their nationwide retail traffic, but the 11 inch snow was worth celebrating so they had a little sale to commemorate it.

Please understand that when I say “promotion”, I am usually NOT talking about “a sale”.

In particular, I’m absolutely not talking about the 40-50-60% sales that stores seem convinced are a daily requirement to keep a mall store open, or at least to generate the traffic they think they need.

I don’t spend much time in malls, but a recent visit had more stores with BOGO and 40-50-60-70 (yes, 70!) percent off sales than I’ve ever seen.

Either their original prices are fantasy or they are in serious trouble.

What exactly is a promotion?

Since I’ve made it clear what a promotion isn’t, I should also make it clear what a promotion IS.

A promotion draws attention, giving your clients and prospects a reason why. While it might include some sort of discount, it doesn’t have to. A well-executed promotion certainly doesn’t need discounts to make it successful.

Promotions commonly attract a specific type of client and prospect to your business. The newbie, the expert, the confused, the investigator, as well as those categories of prospects and clients within each product/service niche you offer.

Fine tune your reason why

A local home brewing store can have a promotion to introduce brewing to their clientele, yet still narrow the audience and get a specific kind of buyer. Instead of having a Saturday in-store brewing day promotion / event, they might have one focused specifically on India Pale Ales (IPA) and then rotate through other styles. In a large market area, they may want to narrow IPA days down to double-hopped or dry-hopped IPAs.

When doing this and focusing on one brewing style, they might stock up on fresh IPA-ready hops and have several brews in different stages of brewing so they can teach each stage’s hopping techniques.

Doing this with a dozen different styles of brewing on the same Saturday would be out of reach for most home brew stores – and would likely hurt business by confusing those who are paying attention.

Worse yet, if prospective home brewers (ie: newbies) show up at the promotion and happen to be folks who don’t like IPAs or the hop’s influence on that style’s taste, they might never come back.

Attract, Educate, Train, Sell

Whether you sell home brewing gear and supplies, or power tools for artisan woodworkers (hmm, do those mix well?), you’re likely to want to separate promotions by audience type so that you don’t attract newbies who need broad knowledge to make a decision with experts focused on tightly defined niches.

The point of the promotions described above is to attract, educate, train and of course, sell. No matter what you do, you’re likely to have prospects and clients interested in what you do that fall into groups you could arrange into newbies, confused, investigators and experts.

What are you doing to give them a reason why?