Great article in Tyler Brule's column in the FT.

Apparently making people wait for a meeting to show how important you are has gotten out of control in the US. And it shows a culture that simply doesn't care about the time of people who have come to see you, whether they be a general business appointment or a customer who is left clicking their heels in reception. Here's a brief extract:

"On a recent trip to New York, a colleague and I were on the brink of getting in the lift without a word and leaving: our host had showed no interest in keeping her appointment and the receptionist was more interested in running a nail bar behind her big desk than playing the role of mistress of first impressions.

But at the moment we were about to leave, an attentive gentleman rescued his colleague and his company's reputation with a tactful show of diplomacy and charm. It shouldn't have been necessary.

"As the ailing economy chokes business and consumers, only those companies that take a cold hard look at how they are treating the people that keep their coffers full - and act accordingly (by improving service) - are the ones that deserve to survive."

More from Brule's column on the link below. On the same subject, I spotted this in the FT over the weekend, which is a good eight-word rule to solve the problem:

“Be gracious with people and ruthless with time.” - Martin Addison, MD, Video Arts

More from Tyler Brule here: Tyler Brule's FT column

Skip to slides 89-95 (-ish) for examples of how Southwest Airlines and Zappos use Twitter for customer service. Micromedia, small interactions building to have big effects - it's important to be aware what you can do with this stuff in customer service

Labels: customer service, micromedia, small customer interactions, Twitter

"Good timbers do not grow with ease;
the stronger the winds, the stronger
the trees..."

- Williard Marriott

The one good thing about a downturn is that it makes you stronger as an organization. Or, at least it should. Most organizations just cut mindlessly, in which case it doesn't.

Use this time to spot which of your frontline people are most resilient. It is likely that morale and motivation will flag among most, as that is natural in a downturn - people are worried about their own prospects, their spending power outside of work and so on. What you want to try and avoid, of course, is that mood being reflected in your relationships with your customers.

Role model the most resilient frontline employees - those who can continue to smile and provide good service and think proactively of the customer's needs, rather than be distracted by their own concerns - and use their profiles when recruiting. Also, hold them up as 'heroes' to the rest of the organization.

But, don't dismiss the concerns of those who don't smile and stay buoyant through down times. Part of your role as a customer-centered leader is to become even more engaged with them and keep them inspired and motivated. That is in stark contrast to what most leaders/managers do in a downturn - become more distant, shut the manager's door and spend time in meetings with those 'on high' which seem to the front-line to be all about which of them are to lose their jobs to cut costs.

So, it's time for you to step up and show your true colours/colors as a manager and leader that keeps a focus on the customer and on communicating with your frontline people to keep their morale up.

Peter Georgescu's Five New Rules for Corporate Success, from his book (see previous post):

1. Creative capacity and the brand integrity that grows from it are an organization’s most important assets
2. Enlightened leaders inspire creativity through understanding, co-operation, and respect
3. Competence and execution are as important as ever, but they must be aimed at building intimacy with the customer
4. Alignment is the critical concept for the twenty-first-century organization
5. Great companies don’t happen without leaders who have transformed themselves

The one good thing about a downturn is it forces you to stop and look at your strategy and competitiveness. I like Georgescu's framework as an aid to breaking out of business as usual and reassessing where real value actually lies. Also, point 5 is vital. Bosses busy cutting and changing everything else in their organization to help cope with the downturn need to stop for a minute and look in the mirror. Take the opportunity to change yourself, as others won't accept 'imposed' change; they'll only go along with it if they see you changing, too.

Labels: 21st century organization, customer intimacy, customer service in a downturn

The key source of value in today’s corporation (is): the relationship between the informed customer and the creative employee - a relationship that must be built with honesty and integrity.

That struck me as a profound and powerful insight.

It's from the book The Source of Success, Peter Georgescu

Labels: creativity, customer relationships, customer value, value add

Keeping Customers In Tough Trading Conditions

Here’s some ammunition to convince the boss or the finance director (or you, if you are the top boss or finance director) that customer-facing resources deliver profit and need to be sustained, not cut back, in tough trading conditions.

1. Cutting service problems increases profit

"1% cut in customer service problems could generate an extra £16m in profits for a medium size company over five years."

Source: Henley Centre

2. Keep the ones you've got

"It can cost six times more to buy new customers than retain existing ones."

Source: US Office of Consumer Affairs

3. Service leaders are more resilient in a downturn

"Service leaders…

Charge on average 9 to 10 percent more for their basic products and services

Grow twice as fast as their low-service competition

Improve market share an average of 7 percent per year. (Low flyers lose market share by as much as 2 percent annually.)

Have an average return on sales of 12 percent compared to 1 percent for low flyers."

Source: Strategic Planning Institute, USA. (Research into 'low cost' vs 'high service' as two extreme customer propositions on which to base your business)

4. Your bills get paid

We all know that large business customers start shifting you from 30 day to 60 day payments or even the 90 day payment run, often without telling you in advance, to preserve their own cashflow in a downturn.

"Many people feel that the only measure is the 'bottom line'. However, a survey* of 3,000 businesses showed the benefits of customer service. This found that where there was high customer satisfaction then, on average, bills were paid at least 14 days earlier than where there was poor customer satisfaction. So, Customer Service creates money".
*(PriceWaterhouseCoopers/University of Bradford, UK).

5. Reducing customer defections improves profits

Customers are more likely to shop around in a downturn, increasing the risk of defection. So, pay even closer attention to them. It doesn’t have to be expensive.

"Reducing customer defections can boost profits by 25-85%. In 73% of cases, the organisation made no attempt to persuade dissatisfied customers to stay; even though 35% said that a simple apology would have prevented them moving to the competition."

Source: NOP/Ventura survey of 1,000 UK consumers

6. What did we say in Number 5? Here it is again

Points 1, 2, 5 and this one are all about keeping the customers you have and not losing them. Also bear in mind that in an economic downturn it’s far easier to win market share from the competition, so becoming defensive-minded is not always a sensible strategy.

Tough trading conditions can prompt the Board to look inward, at processes and resources, and to look outward, at suppliers and customers, through a lens that has written on it “Where can we make savings?” Not by cutting down on how customers are treated. Big, big mistake…

"68% of customer defection takes place because customers feel poorly treated."

Source: Research by TARP (e-Satisfy)

5. How not to treat customers in a downturn

This is a 3 minute and 30 second clip you might want to share with your customer-facing staff to give them a lift. Click on the link, scroll down a little bit when you get into the page it links to, then click on the triangular play button to play the clip:

How not to treat customers in a downturn

Labels: customer service and profit, downturn, keeping customers, recession