Be Attentive

The Power of Realtime Feedback for Your Business

The Power of Realtime Feedback for Your Business

When I get in a car my goal is typically to get from where I am to where I want to be as fast as safely possible. To do that, I primarily use one gauge on the dashboard: the speedometer. Sure every few days I have to pay attention to the gas gauge and, if the car doesn’t seem to be behaving as it should I glance at the other gauges but the majority of the time it is all about the speedometer. WIth my goal being to get to my destination as fast as possible I try to keep that speedometer at (or slightly above) the speed limit.

I rented a car the other day with a new feedback mechanism that completely changed the way I drive. The car was the Nissan Altima Hybrid. I don’t own the car ( the car I own is more of a truck—it has a V10 and can easily pull up the mountain into Flagstaff at 85 mph—but that’s a post for another day and perhaps a different blog). I ended up driving the Altima because the rental car company gave me a free upgrade. I drove it for 4 days in the bay area. The hybrid Altima is rated at 42 mpg. It’s got all kinds of high tech stuff under the hood that switches back and forth between and electric power and the combustion engine and delivers great efficiency. All that stuff is very cool and seemed to work very well, but the thing that saved the most gas for me was a new gauge they added to the dashboard. The gauge was a real time mpg indicator. It was cool. I could always see exactly what kind of mileage I was getting. If I pushed the pedal down to pass, the mpg indicator would drop down into the the 8 to 9 range. When I coasted down a hill it would shoot up to 80 to 90 mpg. I found if I kept it steady I could get to a nice cruising speed and still be getting over 40 mpg.

That one additional bit of information completely changed the way I, the proud owner of a V10, drove. Yes, I still wanted to get there as quick as I could but I found myself balancing that goal with the goal of maximizing my mileage. Now I know that each time I fill up I could do the little calculation and figure out what kind of mileage I got, but the fact is I don’t. Why? Because by that time, the decisions have already been made. I admit it, I am short sighted, but I have never filled my tank with gas, calculated my mileage and said, “Hmmm, I better drive slower.” On the other hand, the real time mgp gauge on the Altima had me driving slower—not always, but certainly more often,

How does that apply to your small business? What feedback mechanisms do you use to monitor the success of your business? Traditional accounting measures are like calculating your mpg after the fact. Everything is history. Sure it is a good number to know, but by the time you know it, it may be too late to influence the behaviors that need to be changed to improve it. Forward looking indicators like sales forecasts and other budgets are more like the speedometer, but even these indicators don’t give what you really need to run your business. What you really need to run your business (in conjunction with the other measures) is a realtime indicator of how your customers feel about your business. You need realtime customer feedback. You may think you know what your customers feel, want and need, but I can guarantee you that unless you are asking your customers and listening, what you think you know is wrong. I can also guarantee you that, just like the realtime mpg gauge changed my driving behavior, realtime customer feedback will change your behavior and the behavior of your staff for the better. Give it a try, you will never go back.

Anybody know where I can get an aftermarket mgp gauge for a V10?

The Happiest customers tell on average 8 other people. Who are your happiest customers? Promoterz knows. Learn more

The Negative Impact of Word-of-Mouth

The Negative Impact of Word-of-Mouth

I listened to a story on NPR this afternoon about the negative impact of bad word-of-mouth, you can listen to it here. Very scary. This is part one of a two part story by Wendy Kaufman, hopefully the second part will bring out the positive aspects from good word-of-mouth.

The basis for the article comes from research by the Wharton School of Business. They found that 1 out of 2 customers has a customer service problem when they shop. Worse is the fact that they then tell friends, family, and colleagues about it and embellish the story in the retelling. The overall result is that 1/2 of those that hear the bad news story won't shop at those places they heard about. Ouch! Those that improve on the situation certainly create a business advantage.

It goes to show the need for businesses to hear from their customers, the bad news as well as the good. Hearing the bad news you can make efforts to correct the situation so that bad embellished stories won't be spread. You even have the opportunity to turn a detractor into a promoter. You can also get to the root cause and fix it to reduce future bad experiences.

Do you remember your customers on their birthday? On their anniversary? Do you give special notice to recently acquired customers? Promoterz does. Learn more

To Save or Not to Save?

To Save or Not to Save?

I was talking with a friend recently that works the customer service phones for the company she is with. She mentioned that her company expects her to solve any customer's problem in three minutes or less. That sounds like a policy created by someone trying to save a few bucks while thousands of potential sales walk down the street to the nearest competitor. She did mention, however, that earlier that day she had taken a call from a customer that was a personal friend of the founder. After running into several brick walls with the fulfillment department she mentioned the issue to her manager and was told, "Do whatever it takes. Just make that customer happy." Apparently the policy at this particular company is "3 minutes for customers. Whatever it takes for friends of the boss."

As wrong as that policy may be, at some level every company probably needs to come up with some criteria for deciding which customers are worth saving and, more importantly, ensure that the best customers get all the attention they need. But how do you decide who the best customers are?

The chart that accompanies this post was taken from a recent article in the alumni magazine from my graduate school. The article provides some great suggestions for setting your criteria. You can read it here.

One word of caution: as you try to determine who your most profitable customers are don't limit the analysis only to past purchases. A customer who buys little from you but tells hundreds of friends can mean much more to your bottom line than a customer that spends a lot but never tells another soul. That pauper may actually be a prince!

When you pass out a Promoterz bounce back card you automatically build an accurate customer list, increase repeat sales, increase referrals and prevent lost business. Pretty powerful little card. Learn more

Complaints Happen

Complaints Happen

If you are in the service business--for that matter if you are in any business--no matter how hard you try to be perfect, sooner or later a customer is not going to be pleased with the service they receive. The inevitability of it shouldn't discourage you from trying to be perfect, but when a mistake happens the recovery should become job #1.

That dissatisfied customers tell their friends is a fact. How many they tell on average varies depending on the study referenced but it is somewhere between 4 and 10. One study notes that those they tell are 5 times less likely to come to your business than the original dissatisfied customer. Ouch.

But there is hope. According to Restaurant Hospitality "Rule-of-thumb numbers show that roughly 60 percent of complaining customers will eat at your restaurant again if you resolve their service issue, and almost all customers (96 percent in some studies) will come back if you solve their problem to their satisfaction and do so quickly."

What is the best way to resolve issues? Hospitality cites a study called “An Examination of Guest Complaints and Complaint Communication Channels: The Medium Does Matter!” out of Cornell University School of Hotel Management. It concludes that nearly fifty percent of unhappy guests want to talk to the boss. Free drinks and comp meals are nice, but what they really want is to let the boss know.

So how easy do you make it for your customers to let you know about the service? You can't always be in your business. Do you make it easy for them to contact you? You might be surprised what you learn and you will certainly have the opportunity to "save" good customers.

Plug from our sponsor: The Promoterz system is one easy way to make sure customers always have a direct link to you and you have a direct and convenient way to respond to them. The system invites every customer to provide feedback online and immediately notifies you and your managers of feedback as it is received.

More happy customers. More repeat sales. More referrals. Learn more

When "I don't know" is a Good Answer.

When "I don't know" is a Good Answer.

Had a chance to go to lunch with Tom Miller yesterday. Tom has been in the franchising industry for years and is an Executive Vice President with Murphy Business. In his own estimation, he is a "legend in his own mind." Actually, he has an extraordinary sales record and is considered The Authority on franchising throughout the business brokerage community.

As we talked about the selling process, specifically to small business owners, he noted that in the "early days" he sold direct mail. He learned quickly, that nobody wanted to hear about his business, but they loved to talk about their own. So when he'd meet with a likely prospect and they asked what he was selling, he would respond, "I don't know yet. Tell me about your business." As he learned about the business, it became obvious if there was need--and what he was selling.

So how much do you know about your customers' or your potential customers' businesses? Is learning about them part of your sales process or are you more focused on making sure they learn about you? Are you learning enough? According to Tom here is a key indicator: "If you need a closing technique you haven't learned enough."

Customers who feel that you are listening to them are more likely to recommend you to a friend. How do your customers know that you are listening? Learn more
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