Who is Minding the Back Door for Your Business?

 

Most companies I know spend a large portion of their budgets on driving new business through the front door.  Far fewer spend even a fraction as much in a directed effort to avoid having those precious customers walk out the back door.  The prevailing assumption is that by providing pretty good service and having largely satisfied customers, the back door is covered as well as it can be, and everything else is controlled by external market forces.

 

In fact, retaining and developing profitable customers is the result of having a solid and aligned organizational culture focused on building relationships that generate loyalty.  According to Fred Reichheld, researcher, consultant, and author of The Ultimate Question, a loyal customer always returns, brags about your organization and provides (free!) word of mouth advertising.  They are willing to pay more to work with you and, when there is a mistake, they are more forgiving.  The ability to cultivate loyal customers is a profitable and powerful competitive advantage.

 

Satisfaction vs. Loyalty

 

There are 2 measurements that can help you understand and manage your customer relationships: customer satisfaction and customer loyalty. Many organizations assume that high levels of satisfaction translate into customer loyalty when, in fact, customer satisfaction ratings are more closely linked to your customers’ perception of product and service attributes rather than to the value they gain by doing business with you.

 

Satisfaction is a measurement of, “I expected it and I got it; therefore, I’m satisfied.”  If this were translated into a grading system, satisfaction translates into a grade of “C” on a traditional report card. This is precisely why your “satisfied” customers routinely shop around when it comes time to buy again. The desired score is obviously an “A,” an “A” always equates to loyal customers. An “A” implies that customers got more than they expected and their expectations were exceeded in some way.

 

High perceived value, as defined by your customers, creates loyal customer relationships, and research has demonstrated that customer loyalty is the best predictor of your future strength and growth potential. Perceived value occurs at the intersection of what customers want and what they get from you versus what they could get from your competition.

 

In order to create and sustain loyal customers, it is necessary to consider every contact with each customer as an opportunity for you to provide value—every time. Every service point is critical and every service point has a level of expectation from the customer that must be understood and managed. We call these contact points, Points of Connection (POC).

 

Points of Connection

 

Employee impact starts from the way they treat and relate to each customer at a given POC and their treatment of customers stems from the employees’ attitude. Attitude drives behavior, and behavior determines outcomes.  If the employees’ attitudes are positive, their behavior will be positive and supportive of the customer, which will generate results consistent with the expectations of the customer.

 

To effectively manage POCs they must first be identified. Once identified, you must clearly understand what value your customers’ desire from each POC. If there is a disconnect between what your customers expect and what currently exists then it imperative to ensure that proper employee development and process improvements are put into place to correct it.

 

Case Study

 

My friend, Jennifer Cassels, owner of Park Avenue Title Agency in Green Brook, NJ, exemplifies the cultivation of customer loyalty.  In the mortgage industry, the ability to overcome obstacles and close loans within tight timeframes can literally mean the difference between success and failure.  Jennifer works very closely with her clients – many of whom are real estate attorneys and mortgage lenders – to help them however she can to facilitate timely closings.  I’ve heard stories from her clients regarding her willingness to go “above and beyond” the call of duty to get transactions done – all the while providing accurate title services with a smile.  Additionally, she manages the POCs very well.  For example, you’ll always get a live person on the phone during business hours and she has a widely acclaimed closing cost estimate calculator on her website.  By managing POCs effectively and by going out of her way to solve her clients’ most pressing challenges (i.e. “how am I ever going to get this loan closed by Friday?”), Jennifer has created a loyal and growing client base.

 

Conclusion

 

Making the strategic decision to create a loyal customer base is one of the most important commitments you can make to the success of your business.  As Janelle Barlow and Paul Stewart say in their book, Branded Customer Service: The New Competitive Edge, “The customer service experience must be aligned with organizational promises.”  When your customer’s experience is not reflective of what has been advertised, promised, or expected, their trust in your business is undermined, which results in more traffic out the back door and lost revenue opportunities.

 

To build loyalty, your team must learn how to create strong relationships through frequent points of connection and deliver unique service experiences as expected and promised by your marketing and sales activities.  The immediate impact of delivering an exceptional experience based on what you’ve promised is a winning combination and a powerful weapon against the competition.  It will also help to ensure that the customers you work so hard to bring in the front door never even consider looking for the rear exit.

 

What if It Could Be Summer All Year Long?

(How to Get Your Organization to Run Smoothly Without You)

Ahh, Summer. Summer means barbecues, swimming, baseball games, camping, road trips, and lazy days in the sun. That’s what summer is all about, isn’t it?

Well, for some, that’s just wishful thinking. Many business owners are so tied to their companies that they can’t step away, and a truly relaxing summer vacation is nothing more than wishful thinking. Who are these people? They are the micro-managers, the “do-it-all-ers,” the “wearers-of-many-hats.” They can’t let go. They think that if they take a step back, their business will falter and all their hard work will be for nothing.

In the words of Walt Kelly’s well-known comic strip character Pogo “We have met the enemy and he is us.”

Does this describe you? Are you a business owner who can (and does) comfortably take time off, or do you function as an employee — a slave to the daily grind?

Chances are, you’re the latter, and you’re certainly not alone. As a business owner, it’s difficult to relinquish control and place your trust (and your livelihood) in someone else’s hands. Although it isn’t easy, it’s crucial – crucial to your well being, and crucial to the future of your company. And it’s not going to happen unless you make it happen. You need to change how you think and then structure your organization so it can run without you.

How? The answer is to take these 5 concrete steps toward your freedom:

• Plan – As Confucius said, “A man who does not think and plan long ahead will find trouble right at his door.” Centuries later, his wisdom still holds true. Whether you employ 3 or 300, a right-sized, well thought plan will dramatically improve your competitive positioning and performance regardless of market conditions. A solid plan drives day-to-day thinking and behaviors, which in turn lead to desired results.

• Delegate – Yes, this is hard, but if you’re still involved in every little thing that goes on over the course of a day, you’re too involved. You hired your staff to do a job. You carefully selected people based on their skills, experience, and drive. Let them do what your plan calls for them to do. They can do it!

• Take a long, hard, look at your staff – First, select one person who can be in charge in your absence. Provide the training, mentoring, and authority that they need to succeed. Then let them do their job. Second, remove marginal players from your team. If you don’t do this, you’re cheating yourself, and them. Give the remaining staff your blessing and your confidence.

• Trust – You won’t be able to let go unless you put your complete trust in your people, your plan, and your systems. If a system or process is broken, identify the problem and fix it. It may not always be easy, but it can – and must – be done.

• Test the system – When you’re ready, take two days off. Don’t call, don’t check in – disconnect completely and see what happens. Be sure that your staff knows they can reach you in case of an emergency – but chances are that they won’t need to. Sure, you’ll be tempted to call, check email, etc., but don’t do it. Step forward, don’t slide back!

You started with two days. Next time make it four, then a week, then two weeks. It will get easier. Before you know it, you’ll feel even more in control of your business and will be able to take a stress-free extended vacation, knowing that you have built a successful and competent team to execute your plan.

Just think about next summer when you’ll be able to relax and enjoy your life to the fullest!

How’s Your Focus Working for You?

Focus. 

It’s one of the things we need to be more successful in business – right?  Although I agree in general terms, it is also instructive to consider what you are focused on. Let me cut right to the chase: I believe that most business leaders and sales professionals tend to focus on the wrong thing more often than they should.

Allow me to illustrate this with a few questions for you to answer (and, yes, brutal self-honesty counts):  

•  At the split second in time when you recently met someone new, what (or who) were you actually thinking about?
• When you negotiated the final points of your last business deal, what (or who) were you actually thinking about?
• When you last worked with a dissatisfied customer, what (or who) were you actually thinking about?

For most people who are ok with the brutal self-honesty thing, the answer to all three questions is usually “myself.” 

If this is the case for you, do you think that at those three moments you were really focused in a way that moved you closer to the long-term results you want?  What about all of the other moments in your typical day – is it a stretch to believe that you are focused too much on yourself there too?  And how about others in your organization (hint: if they’re human beings, they’re susceptible too) – where are they focused?

One way to find out what you might be missing is to consciously change your focus during important meetings and interactions away from yourself to the other person.  Then see what happens.  Your thoughts drive your behavior, which in turn drives your results.

Give it a try to see if what you’re focused on needs to change.