Good Service or Great Service?

Do you know the difference between good service and great service?   I have talked about service as the key driver of businesses over the coming years.  Yet, I am not sure all of us appreciate the difference between good service and great service.  Great service leads to significant loyalty and referrals.  Good service may become the expectation of your customers and may  not set you apart from competition. 

So, what is the difference.  The answer is the “unexpected” surprises you get with great service.  All of us have experienced such “unexpected” surprises in our lives.  Let me cite a few of my own:

1.  The time I wanted to buy some clothes from a local men’s store and the salesman came to my office with a selection and then sent the tailor to my office to fit me.  Then had the finished products delivered to me at the office;

2.  The time I stayed in a hotel in Hong Kong and got off the elevator after dinner and observed a hotel employee, after seeing me, run to my room to open my door;

3.  The time I returned something to Nordstrom’s that I had received as a gift, only to learn that Nordstrom’s did not carry that item.  Yet the Nordstrom employee happily took the returned item and gave me full credit.  Even told me he personally would return it to the store where it was actually purchased;

4.  Most recently, when I returned a pair of Puma sneakers due to an imperfection and received back within one week a brand new pair, no questions asked.

I am sure all of you have experienced such “unexpected” surprises.  These are the things that separate great service from simply good service.  The more you can provide great service to your customers the more successful your business will become.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

Your Service Business-”Islands” or “Partners”?

One of the most difficult tasks facing any small to mid-sized consulting company is transforming itself from “islands” to a true “partnership.”  Without this transformation, I believe a consulting company cannot survive long term and, as importantly, its “products” will not reach their maximum value for their clients.

So, how do you accomplish this transformation?   In the beginning of a personal services business there is the founder(s).  They work to get clients, deliver with excellence and hopefully, get more business.  They basically operate as islands.  As the Company grows, it hires more consultants who fundamentally do the same thing.  Get business, deliver with excellence and, hopefully get more business from the same clients.  If the Company is well managed, collaboration will be mandated to ensure the products delivered are of the highest quality and not simply the thinking of one person.  Over time, the intellectual capital of the Firm will be collected so that future projects can benefit from the thinking of past, similar projects.

However, in a high ego business like consulting, getting consultants to act in the best interests of the Firm verus acting as “islands” is most difficult.  Particularily if bonus plans are structured in such a way as to reward individual productivity.  This “island effect” is neither good for the Firm or for the Clients.  From a Firm perspective it would be as if a player on a football team ignored everyone else on the team and ran his own plays.  Without a TEAM, everyone will lose.  No intellectual capital will be developed.  AND, clients will not receive the best the TEAM has to offer.

Perhaps the best person I know who has dealt successfully with this very issue is David Maister.  David’s blog and information can be found at http://davidmaister.com/blog  David is a master at this subject and was of enormous help to my Partners and I as we made a successful transition from Islands to Partners.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

Loyalty Programs-The Good, Bad And The Ugly

O.K.. so you are in charge of building loyalty for your business and you are considering a loyalty program.  Remember when life was simple and we had S&H Green Stamps.  I certainly do.  In fact, I was an avid “collector” and used the stamps to get the simple things in life like an ironing board (true!).  Did the S&H program build loyalty?  Yes it did…  But, why?   I believe it was because it was the “only game in town.” 

Of course, the first question you should address is do you really need a loyalty program.  Usually, the less differentiated you are from your competition, the more likely you are to need such a program.  The more unique your product or service is, the less likely you need a loyalty program.

The really big “surge” in loyalty programs came with the airline’s frequent flyer programs.  American Airlines was the first one to offer such a program.  Seemed very simple.  Just fly on American and get one mile for every mile you flew.  When you got to a certain level you could fly for free.  A very simple and effective concept, especially for business people.  Now the ugly part.  Every other airline in the world jumped in and offered a program of their own.  They were all quite similar.  Then the “loyalty program wars” started.  Everyone tried to out do everyone else.  Triple miles were all the rage at one point.  Today, you can earn miles on practically anything you buy.  Again, airline seats are very close to a commodity, so it seemed to make sense for American to offer such a program and “stand out” from the crowd.

So, what is my point?  As can be learned in the airline example, loyalty programs can work but, like the products themselves, they must be unique or you run the risk of competition simply copying what you are doing, thus negating the positive effects of the program and simply adding costs.

One way to avoid competitive programs is to join an existing multi-manufacturer program.  One example of such a program in today’s marketplace is  U-Promise.  A multi-manufacturer program in which you generate money for the college education of your children or grandchildren.  Since category exclusivity is provided, it is extremely difficult for competitive products to provide a similar program.

Of course, at the end of the day, any loyalty program must make sense from an economic point-of-view.  If your business does not increase sufficiently to pay out the expense of the program, you may be wasting your money.

So, there you have the good, bad and the ugly of loyalty programs.  Be careful if and when you launch such a program.  Remember they are not easy to establish and even harder to terminate.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

Delighting Customers

Do you remember when you were so thrilled with a product that you would talk about it endlessly with your friends?  Perhaps it was Good Humor Ice Cream, or a new Chevrolet, or a great new food product.  You just loved this product to death and you were “delighted” with what benefits it provided.  Does this still happen?  Yes, but I bet not as frequently.  Why?  It is all about service and uniqueness.

What are some examples of products that truly have “delighted” customers?  Remember when Swiffer from P&G was introduced?  Everyone was talking about what a great product it was.  It built a whole new category.  This is not atypical of P&G.  Remember Pampers? 

So, how can you truly delight your customers.  You can on three levels:

1.  Develop products which are truly unique and satisfy a real customer need;

2.  Go above and beyond in providing  service to your customers;

3.  Surprise your customers with something extra that they did not expect;

I believe I have dealt with #1 above.  As to #2, where do you go today and get great customer service?  Certainly not on the telephone.  Perhaps the best example of great customer service is The Ritz Carlton chain of hotels or Nordstrom.  Both have a corporate culture of going the extra mile for their customers.  Both have extensive training on doing anything possible to satisfy a customer.

As to #3…  I once stayed in a Four Seasons hotel with my son and his two dogs (yes, the Four Seasons allows dogs).  After we checked in (where they knew the names of the dogs) we went up to our room where we found two dog bowls, bottled water for the dogs and two dog biscuits with the dogs names on the biscuits!  Now that is providing a delightful surprise! 

It is all about keeping your customers happy to build loyalty.  So, look for those things that you can do to introduce new & innovative products and things that will keep your customers delighted with your product(s) and service(s).

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship

Incentive Plans…Be Careful What You Wish For!

Do you want to motivate your employees to achieve specific goals?  Have you considered an incentive plan?  If you have considered a plan or you have actually implemented a plan how can you be sure you actually achieve your goals?

I have often said, be careful what you wish for with an incentive plan because you may actually get your wish!  What exactly do I mean?   If you want individuals to sell and you design a plan to reward results, how will that plan effect your staff’s ability or desire to work together?  If your plan is individually based, you can be sure human nature will play a major role in how your staff acts and they will become “islands” within the organization.  Not wanting to share leads or work together to close sales.  Is that what you want?  I doubt it?

So, what is the best plan design?  The answer really depends upon what you want to achieve.  If you want to increase Company sales but at the same time reward individual achievement, then you must combine the two.  For example, in order for an individual to receive a bonus, one restriction might be that the Company must achieve its overall objectives. 

Incentive plans could also include ownership in the Company.  This is particularly beneficial in personal services businesses including Consulting companies.  One successful plan approach is to allow your professionals to share in the equity of your Company based upon their performance and based upon the growth of the firm.  In essence, “new” equity is distributed based upon Company growth to those who contributed to that growth.

Of course, issues around Company “control” must be addressed and can usually be accommodated with non-voting stock.  But the details of such a plan should be discussed with your accountant and Lawyer.

So, as you design any incentive plan, be sure to envision what the end result will be taking into account what you would like to achieve and, of course, human nature.

Rich

Bizvice:  Strategy, Marketing & Entrepreneurship