Big is not better

Here’s an extract from Knowledge@Wharton, an online magazine from The Wharton School of Business that I subscribe to.

After losing $60 billion in the last decade — and billions more recently when a cloud of volcanic ash grounded flights across Europe — airlines are looking to consolidate as a way to return to profitability amid continued struggles with high fuel prices, competition from low-cost carriers, and a limited customer pool that shriveled even more during the recession. But experts are skeptical about the “bigger is better” strategy. Many observers say the carriers have proved downright flighty at following through on making changes that improve operations and put the customer first.

Continue reading “Big is not better”

We need to get our act together before expecting others to get their’s together

From his book Winning with People, John Maxwell (who I think is one of a small handful of people who really understand leadership) takes a look at some principles that address victory over self. Here’s one that I think is a gem:

Who we are determines how we see others. This principle says once we get our own act together, we will be able to help others get their acts together. It’s impossible, if I am an unhealthy leader, to have healthy followers. I have to fix myself. We don’t see others as they are; we see others as we are, because each of us has his or her own bent and that colors our view of everything. What is around us doesn’t determine what we see. What is within us does. For example, if I am an untrusting person, how you think I will see you? I will see you as untrustworthy. So anything that is unhealthy about me is going to spill onto you. That is what leaders have to understand. But as a leader, if I can get victory over myself, if I can fix John Maxwell, the odds are high I can help and fix others.

Are all your clients profitable to service?

As I have discussed in a previous blog posting, time and billing systems that are in general use masquerade as practice management systems but even those that have the potential to provide useful management information are not generally used for that purpose.  The only “management” support they give is to monitor time charged by people for billing purposes. Continue reading “Are all your clients profitable to service?”

Is your product return policy customer-centric?

Back in February, 2010 I posted some thoughts called Moments of Truth (MOT).  Here’s another one that you might want to share with your clients and ask them whether their “Returns Policy” is working to their advantage.

I’m in Australia at the moment and I just returned from a visit to the Ballina’s Big W store owned by Woolworths (for the benefit of our readers abroad, one of Australia’s “leading” retailers.)  The experience I had was less than great.

Let me explain. Continue reading “Is your product return policy customer-centric?”

Some Thoughts on Networking

I do lots of presentations each year that might be best described as networking events. Given that professional service firms rely very heavily on referrals and given that your network of contacts is a potentially rich source of referrals I thought I’d share some thoughts on how to make the most of networking opportunities. Here goes:

  1. Before you attend a networking event find out as much as you can about what the theme of the event is, who is likely to be there, give thought to who you would like to meet and what you would like to discover by attending. Do your research on the people (and their organization) who you expect to be there – when you get to meet them you will seem well-informed an on the ball. What better credential could you have as a representative of a professional service firm in the knowledge industry?
  2. Never be late for the event. If necessary get up 30 minutes earlier that day! When you’re early you can scope out the room, learn the names of people, get comfortable with the group and decide where you want to sit and who you want to get to know.
  3. Do NOT try to use the occasion to sell anything. Your purpose in being there is to meet people and to establish rapport through learning as much about them and their needs as you can. That means take your business cards by all means but do not take your brochures – if someone wants to learn more about you and your services, set up a later meeting (perhaps over a meal) and talk shop there.
  4. Take a small pocket notebook to make a note of things your discover, people you meet, promises you made etc. On this point take note of Stephen Covey’s 5th Habit – seek first to understand before being understood: develop your listening skills rather than your talking skills. You’ll be amazed at how fruitful this turns out to be for developing strong relationships.
  5. Never sit next to one of your associates. The purpose of attending the event is to meet people, why on earth would you want to sit next to someone you already know?
  6. Dress appropriately for the event. What is appropriate should have been determined as part of your discovery process that I discussed in point 1 above. Need I add, comb your hair, brush your teeth, polish your shoes, change your shirt if necessary – sorry, am I sounding like your mother?
  7. Follow up the people you met who you would like to form a relationship with.

Sources of Differentiation for Professional Service Firms

Most accounting firms offer pretty much the same work product as every other firm in the industry.  Traditional compliance services have the character of commodities in the sense that customers find it difficult, if not impossible, to make a judgment as to the quality of the work product and must therefore form their value judgment on the basis of their experience with the firm. Continue reading “Sources of Differentiation for Professional Service Firms”

Moments of Truth – Use Them or Lose Them

My daily ritual starts with an investment of 2-3 hours “sharpening the saw” as Stephen Covey puts it.  Typically this will consist of a 1 hour workout followed by a visit to my favorite Starbucks store for some reading and reflection.  These couple of hours are the most important in my day because I know they are good for my mind, body and soul.  They set the scene for the rest of my day.

The service experience I have at Starbucks stores is, for the most part, very good.  But like all businesses it’s occasionally disappointing.  The challenge for every business is that the bad experiences will always be judged by reference to the good ones so the better you are on average the worse your customers feel when you let them down.

Earlier this year I made several bad choices when I was skiing at Heavenly, South Lake Tahoe where I spend most of my time when I’m in the US. The consequence of these choices was a broken arm and two broken ribs.  Needless to say I was not a happy chappy.  In fact, because the arm was broken at the top of the (not so) humerus bone it could not be set and all I could do is wear a sling for 5-8 weeks.  This stopped my workouts but it did not stop my Starbucks visits.

The first morning I visited the Tahoe store with my arm in a sling the delightful baristas on the early morning shift who always give every customer the warmest greeting imaginable wanted to know the full story so, basking in the attention and looking for sympathy, I naturally obliged.  While I’m talking about this I want to share a very important point.  The “welcome” you and your team give to your customers and prospects is one of the most, if not THE most, important drivers of customer delight.  In his great book, The Invisible Touch, Harry Beckwith reports on a survey of 200,000 customers of VetSmart, the business that provides the veterinary facilities for the Petsmart chain of stores in the US.  The survey revealed that the greeting was the single key to customer contentment.  He said:

Of the pet owners who reported that they felt “very welcome” when they entered VetSamart, 98% reported that they were very satisfied with their overall experience.  No other factor–the reasonableness of the fee, the cleanliness of the facility, or the clarity with which the vet communicated to the pet owner–mattered remotely as much as the greeting.

This is precisely what we hear from the clients of professional service firms all the time when we conduct Client Advisory Boards and it’s why we believe your Director of First Impressions is so critical to the success of your own customer service strategy.  The welcome establishes the mindset that frames the rest of the visit and therefore the entire experience.  If the welcome is ordinary or, worse still bad, it’s downhill from there but I digress…

Two days later when I visited the store one of the baristas who I shall call Heather (because that’s her name) gave me a get-well card signed by her and her co-worker Nina.  It literally blew me away.  Jan Carlzon, when he was the CEO of Scandinavian Airlines coined the phrase “Moments of Truth” in his book of the same name which is listed amongst the 100 most important business books of all time and definitely worth reading.  This phrase is now well entrenched in the customer service vernacular.  Now, the great service I always get from (most) of the Starbucks crew is not a Moment of Truth–I’ll call it a MOT, that has become my expectation, but receiving that card was a MOT.  It told me that these people actually care as opposed to just going through the motions of customer service.

However, there can be “good” MOTs and “bad” MOTs often from the same establishment.  Here is a bad MOT that I experienced at the same store, same time in the morning (5:30am) but different baristas.  This store opens at 5:30am every day.  I’m there withing 5 minutes of that time. About 2 weeks ago, I get to the store and I see a guy walking around outside and frantic activity going on inside the store.  I attempt to open the door and the barista inside looks at me with a frown and waves me way as he goes on with stocking the food cabinet.  His co-barista goes about her work intentionally not having any eye contact with me or the other gentleman standing at the door.  That was bad enough but it was 28 degrees F which is 4 degrees below zero or, to put that another way, damn cold. I waited for another 5 minutes then decided to visit another coffee shop.  This was a bad MOT.

The following day when I visited Starbucks, the young man who was on the previous day’s shift was there and I asked what had happened.  He gleefully acknowledged that it was his fault, he was late getting to the store and went about this work as though nothing had happened.  I think he apologized but the moment certainly was not memorable.

This experience begs the question: what could the baristas have done on the day they were late opening?  One option was to do what they did — piss off a couple of customers while they work like crazy to get the store ready.  Another, much better choice in my view, would have been to let us into the store (remember there were only 2 of us and there are rarely more than 3-5 customers before 6am anyway.)  The baristas could have then said “We slept in, sorry.  It’ll take us a couple of minutes to get ready.  If you’d like to take a seat we’ll get your order ready as soon as we can and your the beverage of your choice will be on us.”  A response like this would have immediately turned a bad MOT into a good MOT.  I know what the margins are in this business and I know the lifetime value of a customer.  It would have cost the company a few pennies, it would have given me and the other guy something positive to talk about and it would have given the baristas a sense of having recovered from a bad situation.

I’m not going to stop going to Starbucks because of this experience.  It is one bad one out of several great ones and many very good ones.  The team at this particular store, and the one I frequent when I’m in Reno, deliver a consistently good experience so the business has a good solid balance in what Stephen Covey calls its emotional bank account with me. Because the balance of the emotional bank has steadily increased, the occasional withdrawal for bad service or an unpleasant experience can easily be accommodated but a string of bad experiences will ultimately result is a lost customer. Importantly, a successful recovery from a bad MOT results in a large deposit but an unsuccessful response to a bad MOT results in a large withdrawal.

Most businesses today offer their customers a reasonably good service experience when things are tracking along in an orderly manner.  But they get tested when things go wrong and it’s precisely at those times they have a great opportunity to actually show what they’re made of.  These are the MOTs that should be embraced as opportunities to exhibit greatness.  The biggest challenge to delivering a great customer experience comes not from a willingness of team members to do the “right” thing but their failure to know what that could be (i.e. a lack of ‘scenario training’) and, perhaps most important, the company’s failure to empower them to make fast decisions in circumstances where a rapid response is called for.  Once team members “get into the swing” of delighting customers it becomes second nature.

Regular scenario training is one way to get this happening.  Use Towards Awesome Service as a catalyst.  This needs to be supported by a policy of publicly celebrating service failures and recoveries so that all team members fully understand that failure is an opportunity for greatness to be revealed.

When is the best time to plant a tree?

A couple of days ago I was skiing at Lake Tahoe and I shared the Gondola back down the hill with a couple from California who had gone up the mountain to sight-see.  I asked them if they skied and they answered with a categorical “No, we’d like to but we’re too old.” Continue reading “When is the best time to plant a tree?”