Business Turnaround

It shouldn’t have been a surprise, really.

The local Blockbuster shut down last week. Online rental, video streaming, and movie on demand dominate the brick and mortar video industry. And, although I’m sure all of these in-home options played a part in the demise of our local Blockbuster, there was another factor involved here. In our little central Texas town “going out to rent a movie” is considered “Entertainment.” So I think what really took this big boy down was the little kiosk called Redbox. It’s convenient, it’s cheap, and you still get to leave the house to choose your movie. Never mind the fact that browsing takes place on a video screen. Hey, I told you it’s a small town. We’re easily entertained.

Twelve years earlier Blockbuster moved into our town and ran almost all of the mom-and-pop video rental stores out of business. Ironic that this giant was brought down by a little red kiosk with a footprint the size of a phone booth.

Did Blockbuster see Redbox coming? Or were they scanning the horizon for a bigger predator competitor? What about your business? It’s not always the big-boxes and the mega-retailers you have to worry about. Sometimes competition comes in a small package.

Just ask Goliath.

“We don’t take that card.”
Digging in my wallet for cash, I said “No problem,” but mentally I deducted 10 points off of the service scale for what the business books call a “customer sacrifice.” Sacrifices refer to the gaps between what your customer wants and what you are willing to give. In this case, if I want to shop here I have to sacrifice the use of my American Express.

Maybe that sounds like a small thing, but it’s a classic example of the sacrifices businesses ask their customers to make every day, like:

* Waiting in line.
* Taking a number.
* This section closed.
* Please use other door.
* No bills larger than $20.
* For faster service, press 1.   
* We're all out of that flavor.
* We don't take reservations.

I’m sure you can make a list of your your own. Sacrifices usually negatively impact your time, money, or convenience. Almost all businesses demand some sacrifice from their customers. And I know most businesses have perfectly sound reasons for doing so. I'm not saying they aren't reasonable. I'm saying that customers don't care.

Business owners try to justify the sacrifice. In the case of AMX, I’ve heard this story more than once: “Well, you see, American Express charges the merchant a higher percentage for handling its card, than blah, blah, blah.” And as a merchant who does offer AMX, I happen to know that's true. But, in "customerspeak," that’s your problem, not mine. I’ve even had some salespeople tell me that they are trying to keep their prices lower and taking American Express would force them to charge more. Funny, I know their competitors accept American Express and charge the same price as they do. Besides, it’s not my job as the customer to guarantee the size of their profit margin.

Most of the time, you don’t recognize the sacrifices you ask your customers to make, because you see them as minor inconveniences.

Perhaps.

But, accumulate enough of them and soon you’ll have a customer exodus on your hands. Customers are getting better at spotting a sacrifice and chances are you have a competitor who’s successfully eliminated the same sacrifice you’re asking customers to make.

In 2008, customers will increasingly become more selective about where they spend their money, and they’re certainly not expecting to make sacrifices. Close the gap between what your customers want and what you’re willing to give, or your competitors may close it before you.

If you have examples of sacrifices you’ve experienced when you’re the customer, send them in a comment to this blog, or email me at [email protected]. I'd love to hear from you.

“It’s a great day at Jack in the Box!”

Hard to imagine someone saying that, isn’t it? Especially, at 6:00 in the A.M.  But, my wife, Frances, calling from her cell phone, assured me those were the words that came over the speaker when she pulled in to the drive-through to order a large diet Coke on her way out of town.

“Then,” Frances continued, “when I drove up to the window, the woman handed me the drink and said, ‘No charge. It’s my treat.’”

“Truly, it must be a great day at Jack in the Box,” I replied.

“It’s going to be a great day all day long,” Frances said.

“Because you got a free drink?”

“Well, yeah!” As if I could miss something so obvious. Now you need to understand something: With Frances, it isn’t a matter of whether or not the glass is “half-full or half-empty.” It’s more like, “if the glass is half anything, a free refill is surely on the way.” “Optimist” is not a strong enough word. She believes the universe is always conspiring to help her, and interestingly, it seems to be doing just that. I mean, I never got a free drink at Jack in the Box. Hmmm….

Anyway, my point - you know there’s one in here somewhere – is that a successful outcome for a customer experience is when it causes people to talk about it. There are entire blogs devoted to the importance and impact of word-of-mouth. And for the cost of a cold drink, an employee at Jack in the Box transformed an ordinary drive-through experience into "service that delights." And Frances told others about it. And now I’m telling you.

Adding the delight factor to your customer service doesn't have to be expensive. Lots of businesses have vending machines available for the “convenience of our customers.” But, a refrigerator filled with complimentary soft drinks and bottled waters for their customers – that’s convenient. Some tire companies offer free flat repair if you buy your tires from them. But, a tire company that offers to fix your flat free no matter where you bought your tire – that’s going the extra mile*. A bakery advertises, “daily newspapers for sale.” Yawn. Now if they gave those papers away to their customers – that would create more buzz than the donuts and coffee.

How about a jeweler who replaces your watch battery for free?

Can you think of some others?

*Discount Tire will repair a flat tire for free regardless of where you bought your tires.

The remarks below are from aspiring actor and documentary filmmaker, Wanjiku m., of Nairobi made in response to an earlier Business Turnaround blog post titled, What Customers Want.

Personal attention is very important and here in Nairobi Kenya, it is highly lacking. Many are the times I go to a restaurant or a shop and I want to pull out my hair because half the time the person behind the counter really doesn't care what you want. So long as you give them money for their products, they really couldn't care less how you are doing or if you are a regular customer. One of my dreams is to hopefully open up a customer care college in the heart of Nairobi and have the government pass a law that will force all service industry professional attend at least one semester to learn how to deal with clients...like I said, a dream :) . Anyway, I long for the day my waiter will say "Hi Wanjiku, will you be having the usual?" cause it really doesn't happen here.

It doesn’t happen here much either, Wanjiku. Your idea, though, for a customer care college is inspiring. Imagine if the Chamber of Commerce and the Visitors Center got together and came up a plan for training the staff in all of the businesses along the main corridors through the city. It could be a customer care program specifically focused on how to be gracious and helpful to visitors.
Soon your town’s reputation would grow as a friendly place to stop and shop.  So Wanjiku, you dream isn’t so far fetched at all. Imagine what a forward-thinking Chamber of Commerce could accomplish by following these three steps.

1. Chamber and Visitor’s Center invests in a customer care program that focuses on training individuals to have good verbal communications and interpersonal skills.
2. Map the restaurants, service stations, and convenience stores located along major corridors that pass through the city.
3. Provide the customer care program free to the merchants marked on the map. Encourage collaboration between business owners. Provide multi-channel methods for receiving the training program. Example: Off-site, on-site, or online seminars.

Abilene, Texas executed a similar program in its reinvention effort to become a hub for tourists traveling across state. Today you’ll find Abilene listed in the Top 10 Leisure Destinations of Texas alongside metropolises like Dallas, Houston, and San Antonio.

“Thank you for calling 1-800-CONTACTS. My name is Tracee. How may I help you?”

A live voice! Imagine that. Maybe it was just a really, realistic recording.

“Hello,” the voice was practically singing. “This is Tracee.”

Convinced it was a live human, I responded. “Hello. My name is Mike Dandridge and I’m a moron.”

The friendly voice laughed and said, “Oh, I find that highly unlikely, Mr. Dandridge.”

“Just wait. You haven’t heard my story. You’ll change your mind. You see, I ordered my disposable contacts online because I figured that if I tried to order over the phone, I’d go through voice mail purgatory. Well, I ordered the wrong contacts and didn’t figure it out until I’d thrown out the last pair of my old ones. So, I called your company and someone took care of it immediately – got the right ones on the way, and sent a “Return” for the ones I’d ordered by mistake. When I received the correct contacts, I tore open the boxes and put in a new pair. That was a month ago. This morning, I decided it was time to dispose of the ones I’d been wearing. But then, after I inserted the new ones, I couldn’t see a thing. After I looked again at the box, it dawned on me what I’d done. I had kept the contacts I’d ordered wrong in the first place and sent back the correct lenses by mistake. Like I said, ‘I’m a moron.’”

“Not at all, sir,” she insisted. Then she laughed – not in a mean-spirited way or anything, just sort of a sympathetic giggle. Then she said, “I’m sorry for the mix-up. After all you’ve been through; let’s get you taken care of right now.”

Two days later, the new contacts were in my hands. Two days after that, a handwritten Thank You note arrived from Tracee, with an apology for “all the confusion,” and a five-dollar gift certificate. Either by intuition, or instruction, Tracee completed five small steps that made the transition from set-back to solution appear seamless. Here they are:

1. Empathize. Become an advocate, an ally for your customer, not an adversary. She sympathetically saw the humor in the situation, yet she took seriously the problem.
2. Take ownership of the situation. Do whatever is within your power to fix the problem. If you’re the boss, empower your employees to do the same. She  didn’t pass me off to another department. Didn’t say, let me get back to you. She fixed it. Right then.
3. Lessen the customer’s inconvenience in body, mind, and currency. The last thing your customer wants is a recitation of shoulds and shouldn’ts from your company’s return policy. She understood the importance to me of having the correct lenses and she made true on her promise to provide a quick resolution. Plus, she gave me a $5 discount. It’s not much, but where do you think I’ll place my next order for contacts?
4. Manage the memory of the customer. Take the sting out of a negative experience. When I got off the phone with Tracee, my wife asked, “What are you smiling about.” I’m sure I’ll be telling this story in the future wearing the same idiotic grin.
5. Extend the experience. Offer an invitation, an enticement, a reason for your customer to return. Think of it as a courtship. A handwritten Thank You Card? Who sends handwritten cards anymore? Exactly.

Note that she would have followed this same procedure had her company made the mistake instead of me. It’s never a good idea to assume that everyone in your company intuitively knows what to do when something bad happens to a good customer. They don’t. It’s important to have a systematic outline for dealing with potential problems. Share these steps with your colleagues or staff, because no matter how much you pride yourself on your service, eventually something will go wrong. It may even be the customer’s fault. It doesn’t matter, as long as you’re prepared to resolve any setback – when good things go bad.

Where do we do get our notions about what qualifies as exceptional customer service?

Fast Company's editor, Mark N. Vamos believes it comes from "an unspoken expectation that's rooted in an idealized image of early-20th Century small-town commerce. We want to feel as if we're looking the proprietor in the eye over a wooden counter. We want the owner of the hardware store to know us. We want the waitress in the cafe to call us by name and pour our coffee with cream, no sugar, without being asked."

I slipped that into my "Wish I'd written that" file. He concludes that the companies best known for superior service are those that have learned how to leverage technology and training in such a way it actually personalizes the relationship between the customer and the business. You might enjoy his complete “Letter from the Editor" in the September issue.

This month the magazine features their Customers First Awards. The winners are described as those businesses that "transform ordinary transactions into entertaining experiences - delighting customers..." Sound familiar?  If you're not thinking about your business in the context of providing a compelling experience, you're missing a unique opportunity for a deeper connection with your customers.

We do personalize the relationship with the people and companies with whom we do business, just as our ancestors did when they looked the local merchant in the eye across a wooden counter. That is what Roy Williams defined as the “Personal Experience Factor.” Provide lousy customer service and the PEF drops below freezing. Enhance the customer experience and you raise the PEF thermostat. Do it right consistently, and you raise profits.

From the mom-and-pop businesses of a bygone era to the mega-corporations of today, the formula for success is timeless: Treat customers as friends. Generously reward their loyalty. Focus on fulfilling their needs and wants.

What do customers want? Simply this – personal attention.

At first, I thought she was just being fussy. Next, I began to rationalize the behavior of the server behind the counter…He probably didn’t mean it that way-maybe he's having a bad day…. Then it occurred to me – I’ve been that server behind the counter, and as a matter of fact, I did mean it that way.

     Here's how it happened: He knew he messed up the customer's coffee drink order, but he resented her for calling him on it, so he began making excuses for himself, internally – things he could never say aloud, like, well, if you’d spoken more clearly, or if your order wasn’t so particular, and on and on. Then, because he was upset and knew his company had strict directives on what to say and what NOT to say to a customer, he did the only thing he could think of to express his feelings – he delivered a silent message – with great flair and deliberation, he poured out the coffee in the sink in front of her. Though he spoke not a word, the server loudly announced, See what you made me do. You made me waste that perfectly good beverage. She got the point. That's when she became upset. I guess he showed her, huh.

  By the way, the company has strong directives about the server's actions, as well. Something like this: “Set the beverage on the back of the counter, wait until the store is empty of customers and THEN pour it out.” Why so specific? Because this company knows the power of silent messages.

    Customers receive silent messages when we ignore them, answer our cell phones, make faces of irritation, and on and on. Whether or not it is our intention to send the message is beside the point. If the customer perceives it a certain way, then in the heart of the customer, it is that way. And every word we use to express how much we value their business is quickly erased when our silent messages say otherwise.

Welcome to all you new subscribers who are readers of TED and Electrical Wholesaling! Today's post will be of special interest to you.

Orange You Juiced?

"You can't just throw money out there if you don't have enough people on the floor to help the customer." George Whalin

George is responding to "The Big Orange's" latest attempt to bolster dropping revenues by offering cash bonuses to employees and stores who deliver exceptional service. Hey - it would work for me!

"We're after customer loyalty," says Home Depot's chief customer officer, Jesse Lopez. "Overall satisfaction translates into loyalty. We want to make sure that when people are having to make a decision about where to shop, they will cross over many lanes to come to us vs. anywhere else."

The program is called "Orange Juiced."

Cute, huh?

Lopez explains "We want to be juiced about serving our customers. I know it sounds a little corny, but trust me, it plays well. The response has been phenomenal."

But, to get back to Whalin's point about having enough people on the floor, doesn't it drive you crazy to see lines of people ten deep at 2 checkout registers while the other 23 are closed. The building center in my neighborhood has 20 checkouts. I've never seen half that many open -even on a Saturday. So, wouldn't it make more sense for a business to only install 6 or 12 checkout points since it's unlikely they'll ever use more than that? Wouldn't your perception of waiting in line change if you saw that 4 of their 6 registers were open as opposed to 4 of twenty? Under one set of circumstances, you might say, "Wow, this store is busy." Under the other, you think, "They don't have enough help."

Bottom line: we talk a lot in this blog about creating a dynamic customer experience, but the service has to come first. Without that, the experience is hollow and ineffective. However, great service is "invisible." As the Big Orange has discovered, it's bad service that gets noticed.

Lopez is insistent,"This is about providing excellent customer service."

Isn't it always?

Click here for the complete article about Home Depot