No Good Rotten Customer!

That No Good Rotten Customer!

Some readers will cringe while reading this and others will quietly lament. If there is one thing that ALL business owners and managers will agree on is that dealing with challenging customers can certainly take the fun out of the day. There is no business that hasn’t dealt with a challenging customer; I don’t mean one that tries to negotiate on price or other terms but rather one that causes so much grief that makes you question your future existence in business. If you’re in business any length of time you know what I mean.

Although I don’t believe there is any one good answer to alleviate painful encounters with difficult customers, there are certainly practices to improve a customer’s experience and minimize the frequency of complaints and difficult situations.

Here is why these are important:

• ·         Customer is vocally disruptful in store and turns away other potential customers.
• ·         Customer becomes violent and creates a harmful situation for you or your employees.
• ·         Customer posts derogatory remarks online.
• ·         Customer litigates and causes negative brand awareness.
• ·         Customer is unhappy and you don’t know it (the worst of them all). Negatively affects brand virally.
• ·         Customer has unrealistic expectations from lack of market awareness.

Rules are meant to be broken, policies are not. Explain in the most simplistic detail as possible what your relationship is to your customer and how the exchange of money for your product or service will take place. If they are not happy with your product or service, what will you do to make it right with them? Allow the customer to view your policies before every transaction. If you’re in retail than place a sign near the register, put it into your menu or flyer or incorporate it into a bounce-back coupon. So many companies feel the need for ‘small print’ to minimalize their liability and ultimately forget the basic customer experience. They then refer to the fine-print when there is an issue. If you’re one of these companies than consider having a ‘policy’ and then a terms and conditions for potentially ambiguous details. A policy should be readily displayed and touch on every aspect of your interaction with the customer in as simplistic detail as possible.  

If ‘policy’ is too corporate of a word for you than consider ‘credo’, mission statement or ‘our tenets’. We have suggested this to others and a common concern is one of fear that they will lose business because a ‘policy’ looks contractual and connotes a defensive mechanism with most. Like anything else, there is a right and wrong way to do it. Make them very legible, easily read (in Lehman’s terms of course) and very accessible.

A customer is not always right, but don’t react with this mindset but rather become proactive with it. It is impossible to be everything to everybody. Not everyone will like your product, or service or even you. The sooner you realize this and profile these ‘non-customers’ the less likely you are to have to deal with challenging customers. Then some would say; yes Tom, but this sounds prejudicial and just wrong. It is not; it is your business to know who your customer is and who they aren’t. If you service your non-customers than you run the risk of losing far more value in than sale than you received and risk damaging your brand by isolating your real customer market.

Businesses that have been around for years have learned their customer’s persona and don’t try to be everything to everybody. Focus on your specific market, tailor your simple policies to the market and make them readily available.

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Give To Get

Give to Get

Business is the exchange of value. To conduct business requires the exchange of resources. This includes time, money or knowledge. It really is very simple; to get you have to first give. This is true today as it was 2500 years ago, but the popular belief in today’s world is to give with an expectation of getting. We all want an immediate return.

What if you give with no expectation of getting; to give and hope to receive- but not expect it? Some would argue this is gambling or just plain carelessness.  The difference is the mindset in which it’s given. Every business in every industry has the ability to provide the unexpected to their customers. Giving without any expectation of immediately receiving can pay dividends well beyond the margin gleaned from a few sales. Giving plays on the individual physic and connotes reciprocity. Giving correctly and nobly can pay dividends ten-fold. But, it requires changing the way you think and work for it to be effective.

As a macro example of this logic look at Google. Google provides free software to the world. If the world embraces it, Google makes the software just a little bit better or different and sells it to a small minority (enterprise) of buyers. Google spends millions of dollars investing in software and then gives it away to the masses for free.  

On a much smaller scale I had a friend that owned a busy convenience store on the North side of Chicago. Every Tuesday and Thursday he would bring in two high school students between 3-8pm. Their job was to “hang out” in the dispenser area and pump gas. They also handed out free mints. No big deal, right? But when was the last time you saw someone pumping gas for you?  His average inside sales were 5% less those two days but his month-over inside sales have increased 12% and fuel sales up 4%! Even with the added payroll he’s still north of a 5% increase in NOI. My friend provided a service that was not expected and it paid dividends.

I had another friend that sold cars. He would send out a Happy Anniversary card to each one of his customers every year along with a short hand written note thanking them for the business and then include something relative to the customer that he learned earlier. He would send an anniversary card for 10 years to the same customers. He would NEVER solicit trying to sell or refer another customer. Yes, the underlying spirit is a sense of marketing but he does something that very few people do and does it with little to no expectation of a return.

Most of us walk around day-dreaming and thinking about our own issues without seeing what’s right in front of us. We have all experienced situations in business when somebody did something for us that was totally unexpected. Think back right now; are these people still in business and successful?  I’d bet most are quite successful.

It’s such an easy concept but hard to practice; if you want to be successful then do the unexpected for others. Plan it without any expectation of an immediate return.     

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SWOT

SWOT

You’re pulled in a thousand different directions and find it difficult to prioritize tasks and focus on what matters. We learned a simple ‘hack’ years ago that engages the staff, helps direct attention and gets things done: “SWOT” Strengths, Weakness, Opportunities and Threats.

Having been in business many years now we have learned to become macro-managers; it didn't used to be this way. We felt we needed to know what was going on in every single facet of our business. To grow a business you must learn to delegate micro responsibilities so you can focus on the big picture. It is impossible otherwise. So when we have staff that explains a particular problem we always insist on a solution. If they don't have an immediate solution we ask them to sleep on it and come back with a resolve. We don't accept problems without proposed solutions. While some may believe this is antagonistic or thwarts open communication, it actually engages employees and invites constructive ideas. This approach also instils a sense of ownership in a common cause.

We have monthly management meetings that always incorporate a discussion of our company’s SWOT. Our SWOT is dynamic and always evolving. Each manager is asked to bring a new SWOT to the monthly meeting; one sentence  per SWOT line-item. So every month we get 12-14 new SWOT analysis to discuss and evaluate for improving our business. If there is duplication in any of the SWOT line items these get prioritized. When our staff brings us a problem with a proposed solution, it's our monthly SWOT meetings that contribute to this practice. Our SWOT allows us to macro-manage our business and spend our time where needed for growth. 

SWOT’s help discern problems and solutions. They enable critical thinking during times of change and offer a sense of involvement and ownership with the staff. Every organization should have a SWOT, no matter if you have 1 employee or 1,000. SWOT’s are dynamic and will help you effectively manage and grow your business. SWOT's help you prioritize.

If you're just starting a business, have a SWOT on your desktop and review it monthly. Set a calendar reminder. It promotes thinking in a way that is often obfuscated by the other tasks that are constantly vying for your attention. It is a tool for direction and focus. It helps to push the 'reset button', regroup and focus on what matters.  

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"Three P's"

Three P’s: People, Product, Process

Marcus Lemonis on The Profit has given new life to the “Three P’s”, when in fact this has been a sage business mantra for many years now. Marcus extolls the importance of these three areas, noting that without a keen knowledge and proficiency in each of these areas no business in the world is sustainable.

Every person in business faces challenges on a regular basis. Challenges are either interim or systematic. Interim challenges are commonplace and usually caused from a mistake or a life episode. Systematic challenges are those that have endured for some time and create issues that continually affect the whole. Left unchecked and to ‘correct itself’ can be catastrophic. Stagnant or decreasing sales is a systematic challenge. Employee turnover, high-return rates and excess inventory are all systematic.  

If you are at a crossroad with systematic challenges in your business, dissect your operation into the Three P’s and do a written cause/effect analysis for making changes in the problematic areas. Thinking about the challenges in this regard helps bring clarity and decisiveness in following through with difficult changes.

A company we worked with years ago had seen zero growth for several years. Margins were thinning and the staff was consistently at odds with each other. The owner hired a friend to evaluate the problems and chart a course of action. After applying the Three P’s analysis he discovered that management seldom returned calls from the staff promptly (sometimes not at all) and seldom replied to their emails and texts. This went on for years and became the ‘norm’. No malice or ill intent, it’s just the way they evolved. What the owner’s friend discovered is that the staff didn’t feel engaged in the business and that their input was of little to no value; they felt insignificant. After some ‘tough love’ at the top and stringent restructuring, management improved their poor communication habits and the staff is now far more engaged in the business and accountable for improving sales. Engaged staff means more productivity.

In the brief example above, people are engaged when they know that their opinion and ideas matter. Everyone wants to be significant, to make a difference and to be recognized and appreciated. If people aren’t recognized or shown appreciation for what they provide they are no longer engaged. People that aren’t engaged won’t produce any more than they are expected to. Had the owner’s friend not applied the Three P’s analysis to their stagnant growth challenge they may never had realized how their poor communication habits with their staff were systematically affecting the company’s growth.

Use the Three P’s while creating a business or to ‘right the ship’ of an existing business experiencing systematic challenges.  People, Product and Process

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Business Culture

Business Culture

If a brand is the face of a company, the culture is the body. Just like a human body, a company’s culture can become toxic if it is not nurtured or cared for. Many companies fail because of a poor culture. Similarly, many thrive for decades because of a good culture.  The culture begins with the owner and ends with the staff. A few elements determining culture:

• ·         Management’s relations with staff
• ·         Coworkers’ relations
• ·         Internal Communication
• ·         Training
• ·         Organization & Systems

I had the privilege of working close to a true restaurateur and gentleman. He built 47 locations within a 35-year span. They had about 50-60 employees per store.  A waitress at one of the stores had an accident at home and incurred a $6,000 medical bill. She returned to work two weeks after the accident and received a check for what would have been her normal earnings during that period. Within the next couple weeks she opened her medical bill and found it had been paid in full.

This waitress had been with the company for almost 10 years. Some would immediately think he had a special interest in this waitress, but he did not. He had a genuine care for his staff and his customers which clearly contributed to his success. Employee retention was the highest in the industry and his company became the flagship for a nationally-known franchise. This folks is culture.

Customers ‘sense’ the culture. If the culture is healthy the customers know it. If it isn’t, customers are buying because of price. Price alone is not a sustainable model. If sales are declining or stagnant, analyze your culture and make healthy changes.   

Treat others as you want to be treated. Respect others and show appreciation in their efforts. It’s ALWAYS the people that make the business.

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