Being ready for a new customer

In a sport, when a player isn’t ready when the play starts, bad things tend to happen. In some sports, a penalty. In others, the opposing team gains an advantage, sometimes big, sometimes a few points. In business, being ready when “the play starts” means you might get the business. Not being ready may mean you don’t get the sale. Sometimes this means a lot, sometimes a little. Worse yet, not being ready may mean you don’t get the customer. Not getting the customer is a critical failure. Few of us have a business where we can afford to miss out on customers. Some of us have businesses where if we miss out on that chance, we may never get another chance to sell that customer.

Being ready times lifetime customer value

Never having a chance to sell to the customer you missed can be costly. Any car dealer worth their salt can tell you how often (on average) they see a repeat customer. Do the math, and you’ll know how many cars they can sell that person’s family over a lifetime – assuming they don’t mess up the relationship. Factor in the relationship habit that often creates in children, referrals to friends and referrals to other family members and before long, you can see that the value of establishing that first relationship can be sizable. The same can be said for real estate, legal and financial assistance, among others. A relationship created by being ready when a new customer steps into your world as a real estate agent, attorney, lawyer or similar can result in a lifetime of steady, lucrative business, despite having the possibility of having years pass between transactions. Again, the family and friends referrals can mount up in value.. if you’re ready.

However, this type of substantial lifetime customer value creation isn’t limited to big ticket businesses. Retail, restaurants and many other businesses benefit from long-term relationships created by that first transaction or event… if you’re ready.

What does not being ready look like?

Not being ready comes in many shapes, colors & sizes. Are your people trained for the job you sent them to perform? Do they have the tools they need? Do they have the training to do that work? Do they have the materials needed? This includes brochures, business cards, safety gear, proper clothing, etc. These may seem like obvious questions, until if you ask your customers whether or not the people they work with seem prepared. I suspect you will find that they encounter ill-prepared staffers more often than you would like. Ask them if they encounter unprepared people at other businesses – without naming the business. This eliminates their desire to avoid embarrassing someone on your team, but provides examples you can use to check on your own team’s state of readiness.

Training your team is part of being ready

Making sure your team is trained is critical to making sure they’re ready for the opportunities they encounter. One of the areas I often see untrained team members is in front line positions that senior team members don’t want to staff. A good example is a real estate open house on a weekend. The listing agent can’t be in more than one place at a time when they have multiple houses open simultaneously, so the team members they book to staff the other homes is critical. If you’re the listing agent sending untrained or barely-trained people “into harm’s way”, consider the possible cost. If you send an ill-prepared team member to staff an open house, their lack of preparedness and/or tendency to act more like a house sitter and less like you can be costly. Will they collect leads? Will they follow visitors around the house like a new puppy? Will they have the home info learned well enough to answer questions without having to read the spec sheet for visitors? Make sure they have a process to follow.

A similar situation arises when a restaurant’s wait staff comes to the table not having tasted the food, wine, and other things their restaurant serves. While this might seem surprising, it happens frequently. Part of training your team is tasting the things you want them to sell. Recommendations from your staff matter.

Think about your encounters over the last week. Were they ready to serve you? How did their level of preparation make you feel about that business?

Photo by Leo Hidalgo (@yompyz)

Chaos, frenetic activity and burning buildings

Years ago when the photo software company first started, it was not all butterflies and rainbows. Quite the opposite. Day one was full-on chaos. On Friday, the check was delivered and a jointly-written email (and written letter) from the old owner and I went out to every client. On Saturday, the code assets arrived. On Monday, reality arrived with a vengeance, along with a few hundred new-to-me (and annoyed) clients.

Instead of day one of a software company being a blank page full of “OK, what do we want to do and where do we start?”, day one was about the phone ringing off the hook. Most of the people calling eventually told me they were glad that someone took it over, but that was well after an awful lot of rescuing people (and their businesses) from the software equivalent of a burning building. While I didn’t create the situation, that didn’t matter. My purchase of that software meant that I also bought the chaos and inherited the responsibility (if not the blame) for it.

Without question, this is the worst kind of multi-tasking (as if there is a good kind). As a whole, my newly acquired clients looked more or less like this: Everyone panicking. Everyone worried about being able to take care of their clients. Everyone wanting a solution as soon as possible. Immediately would be OK too, of course, but most of them were surprisingly reasonable and patient (thankfully). I “inherited” it all via the purchase, so I clearly asked for it. Over the next few months, it took daily (or multiple daily) releases of software to bring all of that chaos to a halt. Back then, one (or five) releases a day seemed like such a big deal. Today, web-based software that runs companies like Uber and Etsy deploy thousands of changes per day.

That isn’t why I bring up this story. The chaos is.

Chaos management

If you’ve ever been in a situation like this, you know that it’s easy to panic. To this day, I am not sure why I didn’t – other than having been in the software business for 15+ years at that point. Despite having been responsible for plenty of high value, high pressure systems prior to that, I always had others to help out if I needed them. This time, I didn’t. Sometimes you want something bad enough that you might even forget to panic. Maybe that’s what it was. I don’t say this to humblebrag. I mention it because I’ve taken part in numerous situations where other people were involved and I want you to think about the impact of this sort of chaos on your customer-facing staff members.

Business owners might find it easy to shrug off the panic and take the chaos in stride. You may have dealt with experiences that allow you to juggle all of this and handle it without freaking out. Where you have to be careful: your staff. If they’ve never been in this kind of situation, it’s on you to make sure they get the support they need and the guidance that helps them deal with the customer service equivalent of Black Friday at Wal-Mart.

If you haven’t dealt with this before, there’s a simple strategy that’s easy to forget when the overwhelm hits: One at a time. That’s it. While it’s simple and obvious, if your team doesn’t get a calming influence and “one at a time” (or something) from their leadership (whether it’s you or one of your managers), they could panic. They could shutdown. They could unintentionally say or do something damaging to your relationship with the client.

Responsibility for handling and communicating all of this is on you (and your managers). Your team needs your backing and guidance – and preferably know this in advance. They need to know that they can escalate to you or a manager if things get bad. Obvious (again), but it’s easy to forget these things if you’ve been out of the trenches for a while.

As for clients, I suggest this as a starting point to reduce panic on the other end of the phone:

  • Communicate early and often.
  • Make sure clients know you understand the situation’s urgency and severity.
  • Deliver incremental progress. Don’t wait for perfect.
  • How your team handles recovery from a mistake is often more important than the mistake itself.

Train them to make it easy to buy

Last week, we discussed the importance of training your employees to use systems well beyond the cash register, including those strategic to the company. While a normal cash register transaction is a typical customer interaction for a retail or service business, there are always the random circumstance that isn’t part of the “poke a few buttons, swipe their card or give them their change” process. In those situations, do you make it easy to buy?

What happens if you’re out of stock? This past weekend, my wife and I had an encounter with a young, polite employee of a national U.S. corporation who was dealing with an out of stock issue. The out of stock item could have been a simple logical issue rather than a physical one. Had the employee been properly trained and provided with the right systems, she would have be trained to “make it work” (hat tip to Tim Gunn), take our money and be resourceful. It didn’t turn out that way, but that’s not her fault. It’s management’s responsibility to make sure she has the systems and training to handle situations like this.

When easy to buy is out of stock

I suggest you put some thought (and some action) into training your people to make it work, rather than to say no and refuse a client’s money – where it makes sense. When it isn’t possible to make it work, your team’s training and systems should be ready to take over.

Think about what happens when an item is out of stock.

  • Do you place the item on backorder?
  • Do you have notification systems in place for your team so that they know when the out of stock item is back in stock?
  • Do you have notification systems in place for your clients so they they know the out of stock item has arrived so it can be scheduled for delivery or pickup?
  • Is your staff trained to handle an out of stock situation in a way that preserves the sale, preserves the client relationship or creates a positive memory for the customer?

Assuming you have all of that in place, what happens in the meantime?

The interim

In the meantime? In other words, even if you have out of stock situations handled well and have systems and training in place to deal with them, what specifically happens from the moment the out of stock situation is detected to the moment it is resolved? This can be seconds, minutes or months.

While the purchase was meaningless, so are many day to day purchases by your clients. The transaction may mean little in the big picture / long term, what matters is how it is handled. This situation illustrates how easily and inexpensively you can turn a failed transaction into one that people will share with their friends.

Over New Year’s, I took the family to see Star Wars. It was our first movie of 2016. The theater near us has an annual bucket program that works like this: You spend $20 on one of these buckets, which gets you popcorn today and the ability to refill the bucket for $4 for the rest of the year. In case you haven’t been to a movie lately, a large popcorn and two drinks will easily cost $20 these days, so the $4 refill for each movie is a nice savings.

Yet on January 1st, they were out of 2016 buckets. While this indicates broken inventory control, that isn’t the point. The concession stand employee said “We just ran out.” When asked if there was a way to get a rain check or pay for the bucket and take a disposable container for now, she looked baffled. Had management trained her well, she would have had a clipboard at the register, could have charged us for the annual bucket, taken our name and number (or email, whatever), given us a bag of popcorn and moved on. A 20 cent solution to retain a $20 sale for a recurring client.

Trivial but still important

Trivial, but these things that happen to your clientele every single day. How are you training your team to handle them? What systems are in place to deal with issues like this, even if the solutions are as simple as a clipboard?

Word of mouth comes from handling these things gracefully and without disruption. Prepare your team to make it easy to buy.

Leading your team to goal setting

Last week, I suggested that you communicate company goals to each team member so that your company-wide goals have context for them in their daily work and with their department’s goals. That’s only part of the job when working with team members and goal setting. The other part is making sure they have a process for identifying what they want to accomplish and how they will break it down and knock off the steps required to make departmental and personal goals happen.

Goal setting training?

You might be looking at that last paragraph and wondering how it is possible that anyone on your team doesn’t already have a process they’re happy with for goal setting. Have you asked them what process they use for identifying, prioritizing and achieving goals? For a business owner, this may not seem possible, but business owners usually have a different worldview, mindset, background (and so on) from at least some of their staff.

To shine a light on that thought: In all the companies I’ve worked for and with since I started post-collegiate work in the early ’80s, not one offered (much less required) goal setting training of any kind to help employees or teams with this critical responsibility.

NOT ONE. How is this possible?

Even if your team members have a goal setting / achievement process they are happy with, do you know how it fits with the process your company uses? What if yours is better? How will learning yours impact their work and life? What if THEIRS is better? How would that change the lives of the entire team and the future of the company?

Yes, training.

The same way that it’s possible for companies to forget to train their people on project management, process management, product management, etc. The assumption at companies that don’t do this may be that “We hired an experienced person, so we expect you to know this.”

That’s great, but if the experienced hire hasn’t been trained, or uses a sloppy, misguided or incomplete method – who pays for that? Even if the method is good, but it’s incompatible with your company’s process, it’s worth discussing.

Are these things a part of your employee on-boarding? Are you showing them where the health insurance forms are and how to file expense reports, but failing to provide them with information (and training) on the company’s preferred goal setting process? Are you spending any time acclimating them to how project management is done at the company?

Are they being trained on the systems and tools your company uses to communicate, manage projects, collect and review feedback, store ideas, plan projects and identify goals? If not, how will they thrive in your system?

People systems are as important as other systems

It’s all too easy to see a need in a company, hire for it, plug someone into a position and turn them loose like a replaceable part. You may feel that your front line people can be handled that way since they aren’t viewed as a strategic hire. I suggest that they are because they are customer-facing, but it’s more than that and goes back to our discussions last week where giving context to company goals is critical to achieving them.

When you take that concept of giving your team context to company goals and apply it to the systems across your entire company, even the front line staffer needs to know your systems and the importance of using them. How else will they determine and achieve their goals? How else will they know the importance of passing along client feedback, much less how to do it?

One of management’s responsibilities is to see that the staff has the systems and training to handle everyday situations. You train them to run the register, but it shouldn’t end there. What are you doing to prepare them to become of strategic value to your company? We see stories on a regular basis where someone started at an entry level position at a large company and somehow managed to end up as the company’s CEO (or as the company’s owner). These things don’t happen by accident.

How you prepare someone to become an integral part of your success is more important as any other training you provide. Train, mentor and guide them – even if you don’t plan for them to become CEO.

Everyone can sell – and they should

This past weekend, the Mrs and I went out looking for a gym. It turned into a lesson in sales and sales prevention.

We had three options: A family-oriented place near our grandkids’ house, a place within walking distance and a place within a few minutes drive, even during our very brief rush hour (which is more like rush-a-few-minutes).

Family friendly

We were greeted at the door, offered a tour to show us the facility and explain how things work, particularly for members who want to involve young kids. When the tour was done, our guide returned us to the front desk crew who greeted us. They answered a few more questions, gave us paperwork and told us what to do next to join.

While it wasn’t clear that the staff had any sales training, it was obvious they had a process in place to help prospective members learn about the facility and the programs they offer. They responded to our unscheduled arrival without difficulty and accepted this work as part of their job.

Drivable

We were greeted nicely as at the family place. The front desk staffer offered to give us a guided tour or said we could look around on our own. We chose to fly solo. When we returned to the front desk, the staffer made sure we understood what made them different from the other clubs in the area, and let us know that there was no signup fee through the end of the month, and did so without making a sales pitch. After getting a few more answers, we moved on.

At this facility, it was unclear if the staffer had been trained sales-wise, but it was obvious they had a process in place to help prospective members learn about the facility and the programs they offer. Likewise, it was clear the front desk staffer accepted this as part of their job. Like the family place, he responded to our unscheduled arrival without difficulty, as if there was a process and some prior training to deal with the needs of prospective members and their questions. It was clear that he accepted this as part of his job. Of all the places we visited, this one left us with the best end-to-end impression.

Walkable

We then stopped at the place that’s a few minutes walk from our home. Proximity is a big deal to us these days. We often walk to dinner, local craft breweries and other activities because these things are fairly close and easily walkable.

We walked into the club and told the young man at the front desk that it was our first time there, mentioned that we were considering joining and asked if we could look around. His response was that there was no membership staff available (midday on Saturday) and said “I’m just the front desk guy.” He seemed a bit uncomfortable with being asked to show us around and/or answer questions. He made it clear that he wasn’t allowed to leave the front desk, so we asked if we could look around on our own and see how well their club fit our needs.

He said “Would you like to buy a day pass?“, so I reiterated that we just wanted to look around for a few minutes and check the place out. He replied that we couldn’t do that. He wasn’t rude, yet he seemed fearful of doing something wrong and appeared to threaten his comfort zone. It made me wonder about his managers and how they treat him.

Nights and weekends matter

The people who work off shifts and weekends are an important part of your sales team. Everyone can sell if they are trained to be helpful. Don’t scare them, prepare them.

The cost of not preparing them

Do the math: Lost sales / year x monthly fee x average-months-of-membership (which each facility should know), then compound that week-in, week-out.

If you lose one $70/month family membership sale per weekend and you retain members for two years, that’s a loss of $87,360. One lost sale per week for 52 weeks, times the lost revenue of $70 for 24 months.

If you retain members for five years, losing one sale per weekend balloons the revenue loss of $218,400. That’s one lost sale / week for 52 weeks, x the lost revenue of $70 / month for 60 months.

Sales training matters – for everyone.