Your referrals leave an impression

Recently, I received an email from someone who described a rather unpleasant home improvement job, which involved the purchase of materials and a subsequent installation of them. We like these things to be boring – meaning everything went smoothly with no drama.

This one doesn’t appear to be turning out that way.

When I say rather unpleasant, the job describing to me included the theft of building materials by a contractor who was referred by the company where the materials were purchased. They also described bill padding on two occasions by the contractor, once for materials, and once for the labor. I’m told the referring supplier reimbursed the customer for the stolen materials, and that the contractor first offered to reimburse for the padded bills and then disappeared.

A few things about this merit discussion: First, there’s probably more to the story. Second, these situations almost always leave clues before bad things happen. Finally, this is really about how much care are you (the business owner) take when you refer someone to help your clients.

Do no legal ties mean no responsibility?

Referrals made in these situations are typically made to businesses with no legal ties to the referring business. You can understand why a referring business would make a point of distancing themselves legally from the folks they refer, but *does the lack of a legal connection matter to the consumer*?

Only legally, if that. And only until you establish a pattern of referring people to your clients regardless of how the referred vendor performs. The corporate line will almost certainly be one of maintaining that legal separation and that the consumer must be responsible for selecting a contractor.

The thing is, if you are going to go to the trouble of referring someone, why do it poorly and without conviction?

Taking the wimpy, “no legal connection” angle is not how you make business personal. I understand that there’s a desire to avoid burdening the corporate parent with the possibly sketchy behavior of a local contractor. What I don’t get is why you would recruit and refer contractors with so little care that it’s simply a matter of time before you run into trouble.

Even if there’s no business relationship and no legal responsibility accepted by the referring company, only a fool would believe that a referral doesn’t reflect on the one who makes it. So why do it poorly?

Why not refer well?

The smart business who makes these referrals will recruit, select and refer contractors that are so good that they leave the kind of impression that you can’t wait to refer them to your clients. Help your customers choose by giving them the tools they need to choose the best contractor from your vetted list of referrals.

The smart business who makes these referrals won’t stop there. They’ll follow up with every referral after the job, perhaps during each job until they’ve developed a level of confidence in the contractors they refer. It isn’t enough to recruit and select well – you have to keep it up. These people represent you whether you like it or not. Make sure they do it well and make sure they understand the importance of the work you’re sending to them.

The consumer bears the burden too

Part of the story that I left out up to now is that the referred contractor asked the customer if they could pay in cash because of some irrelevant reason.

If you (the consumer) don’t immediately disqualify a contractor who asks this question, you shouldn’t be surprised if (when) you have problems with them. In this case, that’s what happened. I told the consumer that this should have been a red flag to expect trouble.

When I get this question, I ask myself what else they want to skip.

Will they skip work that would result in dangerous construction? Will they skip town with my money? Will they skip town with materials? What else might they do while having access to my home or business? Did they skip buying insurance? What else did they shortcut?

The smart business will remind their clients that while working this might save you a few bucks, it might also cost them a lot.

The quality of your referrals matters. Make sure they’re worth giving.

When the smoke clears, will your reputation?

No one in the Pacific Northwest has to be reminded that this is the worst fire season since 2003.

Depending on what you do a bad fire season could be a boon, a bust or a non-issue to your business. Over the last couple of weeks, we had communications and marketing oriented conversations focused on the folks whose businesses are placed at risk by a bad fire season.

There’s a different kind of business impacted by fires, natural disasters and similar events: those who provide things like tanker trucks, field rations and related convenience items, construction supplies (lumber, drywall, tools etc) and so on.

If a scene like this summer means that you will be extra busy for the next year or so, perhaps more, good for you – particularly if you are a trusted member of your community (business and otherwise).

However obvious this may seem, it needs to be said…

A reputation setting recovery

The way you and your staff serve your clients from now until the recovery is over – regardless of what’s being recovered from – will set the tone for your business’ future.

Some will eventually give you a second chance, but for most, this is the one chance your business will get to show its colors. It will seal the reputation of the business, its owner(s), managers and staff.

Captain Obvious, you say? Perhaps, yet we continue to see examples where businesses have behaved so badly that governments feel obligated to put “no gouging” laws into place.

The thing is, pricing is the least of your problems. People understand that pricing gets a little crazy when resources are constrained. Supplies are often harder to get, and they’re often competing for scarce transportation facilities including berth time at port, dock time at warehouses, much less truck drivers or semi-trailers to haul those supplies. Qualified people are in demand, which tends to create overtime hours.

Do your clients want to wait or pay overtime-related costs? Ask them.

Communicating the challenge

When these situations occur and drive up your costs, communicate the situation as frequently, quickly and clearly as possible. Communicate what you’ve done to try and work around the situation. Ask your clients for ideas and connections in their network that could help you serve them a bit better.

You never know when a client might have access to resources or connections that could solve a problem that’s simply “killing” you – and those things may be out of reach without a little insider help. Even worse, if these clients know what’s blocking your progress and they know their resources / connections could help but you keep telling them you have things under control – how could that damage your relationship / reputation?

It’s OK to ask for help.

Resource problems aside, be sure that any abnormal delivery timeframes, costs, staffing challenges or other potentially damaging issues are communicated well. Transparency works. Small businesses use it as a competitive advantage vs. larger, better funded competitors during good times, why not use it during challenging, resource-constrained times for the same reason?

Call volumes are unexpectedly high, but your call is important to us…” – something you’d never say to a client before putting them on hold. Yet you only get this greeting when reputation damage is most likely to happen.

We don’t remember that the cable internet met their 99.9% uptime goal last year, but we remember each of the 43.8 minutes of downtime per month that this uptime goal allows for – and that the downtimes happened at inopportune times.

We remember when we consistently get a transparent answer or explanation.

The mindset that risks it all

The “they have no choice, I will get (and keep) the business no matter how I act” mindset can infect everything from sales and service to receivables and delivery. Once observed in one part of the business, it’s a matter of time until it crawls elsewhere.

I won’t belabor this, because the kind of business owner or manager who would let this behavior happen wouldn’t likely read my work. Despite that, check out the short 30 seconds it takes Vince Lombardi to describe the obligation that team members have to do their best on every play of every game.

Print readers, see https://www.youtube.com/watch?v=HKN3rvrWyvg&feature=youtu.be&t=0m50s

 

Take bad competition seriously

I don’t talk much about competitors.

I avoid it for a couple of reasons. First, because you have far more to gain by investing time and effort into improving your own business. Second, worrying about what someone else is doing is usually a waste of time since you have no control over their behavior.

There are a couple of exceptions:

  • When a competitor does something smart.
  • When a competitor repeatedly damages the reputation of your market.

We’re going to spend most of today focused on the worst of these.

When a competitor does something smart

When you do something smart, a competitor will copy what you did – perhaps. Other times, competitors will watch what you did and fail to see value in it, fail to understand it, or decide that it’s not a good fit for their business.

Sometimes, you’re the one watching that happen. You owe it to yourself to pay enough attention so that when a competitor does something smart, you can analyze what your action would be. For example, if you run a high end hotel and the other high end hotel in town adds valet parking,  you’re going to need to think about how to respond.

The key here is not usually the thing being done. It’s seeing the move for what it is. Deciding why it was done and what it accomplishes isn’t always obvious. Consider it carefully.

Competition damaging the market

Usually a competitor who can’t get out of their own way will find a way to go out of business. This allows us to ignore them and let them flame out on their own.

Sometimes we aren’t that lucky. When that happens, what we’ll find is a business (and owner) who damages their own business, but not bad enough to make it fail. You’ll see this in markets with enough demand that even a poorly run business can find a way to make enough to survive.

The problem is that a business run this poorly creates a reputation that can damage every business in the sector. If there’s more than one of them, it’s a matter of time before their combined reputation stains an entire market full of businesses.

Including yours.

Don’t take it.

Are you willing to let your competition destroy the reputation of the market you’re in? Of the business you’ve worked so hard to build?

Think about the effort you invest to market and sell what you’ve worked so hard on. What would it take to accomplish the same thing if your reputation wasn’t what it is right now?

How many times have you heard people discuss putting off a transaction with a vendor because of prior experience with another vendor? You know of markets that already have this problem.

How would you cope with a business or group of businesses that do things to cause the public to think less of the rest of the businesses in your market?

Are you sure they don’t already exist? If not, how do you find them?

Finding bad eggs

Whether these reputation-damaging competition exists or not, you’re likely to find the scoop on the social review networks where your clients report their experiences.

In general, Yelp is the best place to start since their reviews aren’t limited to any single type of business. They do have more restaurants (for example) than many other types of businesses, but their coverage is quite broad.

In some cases, you’ll find more industry focused social review services, such as TripAdvisor. Finally, if your client community includes students, their school / university may have a review service, ombudsman or similar.

You should be reviewing and responding to comments on these services on a regular basis, but in this case, you’re looking for your competition.

If you find consistent patterns of client abuse and reputation damage that span a number of your competitors, you have a decision to make.

What to do

If you can take the guilt-by-association reputation damage, or you don’t think it will affect you, stick to working on your business – but keep an eye on it.

If it’s more than you can take or it gets worse, you have a few choices:

  • Buy them out.
  • Turn up the competitive heat.
  • Decide what you’re willing to do to save your business. Remember, your business and its jobs are at stake.

Are you willing to lose your business because they don’t care about theirs?

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?

It Starts With Trust

Earning, retaining and regaining the trust of your customers has been central to this blog from the beginning.

We talk about a lot of different things that all come down to creating an atmosphere of trust with your clientele. That trust will build a relationship and that relationship, even if impersonal, is what makes business personal to your customers.

A few questions came out of recent conversations on these topics and the best ones were these:

  • How can an impersonal business relationship truly be personal?
  • How does a vendor recover from a massive loss of trust?

Come on, Steeeeve

How can an impersonal business relationship truly be personal?

Easy…it starts with trust.

For example, I have a relationship with Apple CEO Steve Jobs. Do we know each other personally, like I do some of my readers? No.

Despite that, I know enough about him from his behavior and the behavior of his company to trust him – at least enough to invest in his company’s products and recommend them to others who trust me.

His behavior and the behavior of his company over time tell me a few things:

I trust that when he walks on stage to speak about new products:

  • He is going to announce things will often seem as if they were designed specifically for my use. Not because he has me on speed dial, but because his company has habitually built products which do just that.
  • He is going to announce products that will be publicly available today or very soon.

 

How is that different from others?

Some companies build something not to fill a need their customers have expressed,  or a need that they’ve discovered through vision and research, but because (for example) they compete with Apple in some other way and perhaps feel obligated to compete there too.

Those conversations seem to start with “Wouldn’t it be cool if…” or “Well, if so-and-so did it, so can we…”

When you come to market with a product with that much R&D behind it and no one blinks… somewhere, somehow, your company simply isn’t listening well.

Example, HP just cancelled WebOS and their TouchPad tablet one day after Best Buy publicly complained they’d only managed to sell 25,000 of the 270,000 devices they ordered. While it seems to me that this is a strategic buying error on Best Buy’s part, it isn’t as if HP can’t be held accountable for making a product that can’t compete in the marketplace. No question that the iPad and other devices hurt them badly, but they’ve known about the iPad since at least January 2010.

Again…listen well.

Some vendors announce new products years before they plan to ship – and in some cases they never deliver them. In the most extreme cases, they pre-sell them and then fail to deliver. Some repeatedly toss out anticipated release dates and never meet any of them. Try recovering from a misstep like that, even if it wasn’t intentional.

Trust starts in the mirror

How does a vendor recover from a massive loss of trust?

At the risk of being Mr. Obvious, you start recovering by earning back the trust you lost (or earning what you never had).

Start with this: Say what you’ll do, then do what you said. If you stumble, own up to it. Seem too simple? Laugh it off if you like, but as Tom Peters says “There’s not much traffic on the extra mile.”

Some of you will point to Jerry over there and you’ll say “He’ll never come back no matter what we do.”

You might be right, but more Jerrys will leave if you keep acting the way you do now. If you don’t change, how can you expect them to? Even if you don’t get Jerry back, there are others who will recognize your efforts with each bit of trust you earn.

Each customer you lose because of something you did to lose the trust of that customer. You delivered late. You didn’t deliver at all. Your quality was poor. You treated them poorly.

These problems can be repaired. Just like trust.

 

Never underestimate the “little nobodies”

Today’s guest post comes from Amber Karnes, who did a great job of analyzing the rise and fall of Urban Outfitters most recent product thievery and how social media played a role in the fall.

One of the messages small businesses should get from this is buried deep within this quote from Amber:

When I worked as the webmaster (and often-shouted-down social media champion) at Fortune 500 railroad Norfolk Southern, I had a hard time explaining this concept. Their PR heads would say, â??Why should a big corporation worry about cultivating a relationship with some railfan who only has 600 followers? Shouldnâ??t we go after the big ones? These little nobodies canâ??t do us any damage.â? Well, today proved the opposite.

Take care of your fans and they will take care of you.

Need evidence? There is now a 3 or 4 week backlog at the Etsy store of the business that UO ripped off.

PS: Thanks for the heads up, AG.

Follow up: “Nobodies as Influencers”

How many pennies would you sell your reputation for?

My wife’s birthday was this weekend, so as a last bit of her gift, our youngest son and I took her to one of her favorite restaurants in the Valley.

As we sat down and caught up on junior’s just-finished semester at Pacific, the “so, what are you gonna order” discussion starts.

My wife has a favorite entree there – and to my knowledge has never ordered anything else in our many visits to this place over a period of roughly 5 years.

But this time, she asks for something else.

Turns out that the last time we visited, she ordered this item and the creamy sauce was more watery than creamy and just “didn’t seem like it used to”.

My son likes that dish as well, so he ordered it anyway.

Taking Pride

Most of my son’s jobs have been in the fine dining and/or catering business and the chefs he’s worked for are a couple of the finest we have to offer in our area.

His dish arrives and sure enough, he notices things that would have never flown at his employers’ restaurants.

Chipped plates, for example. His arrives with a small handful of chips around the edges of the plate. Both mine and my wife’s have them as well.

He tells us that someone with pride in their work would never serve these entrees on chipped plates (this is a restaurant with entrees from $14-29).

He also notices that the sauce is thinner than usual and not seasoned as it was in the past.

Reflecting ownership

“Something’s changed here”, he notes. “Do they have a new owner?”

I’m not sure of the timeframe but I do recall a change of ownership sometime in the past.

While that may or may not be the instigation of the change in entree quality of this place’s signature dish, it doesn’t really matter because it reflects on the owner, the manager and the head chef.

The chipped plates are a symptom of “Oh, that’s good enough”.

Would you sell your business’ reputation gets sold for the price of a $6 dinner plate? Or .08 worth of garlic, a little black pepper and 4 more minutes on the burner?

How about one less restroom check per day? Or a 25 cents worth of Pine Sol in the mop water?

It happens every day. Don’t let it happen to your business. Don’t teach “good enough” to your employees.

Every little thing sends a message. If nothing else, this is high-value marketing with a low price.

Doing it wrong gives it a high cost and delivers the wrong thing – reputation damage that’s hard to get back.

Did you Google them first?

That person you’ll be meeting shortly.

The prospective employee.

The vendor you can’t get an answer from.

Your kid’s new soccer coach.

That school board candidate.

Those persistent salespeople you’re thinking about giving an appointment.

The people who live next door to that dream house you have your eye on.

Who are they… *really*?

Did you Google them?

Why would you do such a thing? Same reason that 79% of employers do it before an interview.

Maybe to protect yourself and find out a little reputational info about the person, but how about to continue the conversation with something more meaningful than the weather.

Seems like a really obvious thing, but too few do it. If they did, what will they learn about you? What will they find interesting and ask you about?

Probably something you might never mention on your own, even though you care about it.

If you find some less than flattering information, you might just let someone know that they need to think a little harder about what they do, how they do it or at least how much they post about it on Facebook.

Worst case, you might just make a really solid connection with someone over an obscure piece of info you might never have known, and make a *real* connection.