Roy's Blog: May 2014

May 26, 2014

How to really create amazing customer loyalty

Organizations today are challenged to create strong customer loyalty.

In the face of empowered and knowledgeable customers, fickle customers (who will leave you in a heartbeat for better treatment) and hyper-competition (the rate of new business formation has increased like never before) there is a struggle to get the right formula to both attract new customers and keep the ones you’ve got.

What’s the answer?

Look at your Serving Business as having two components.

The first component, core service, represents the basic foundation of your business. It is your basic product or service without which you simply don’t have a business. In the telecom world core service could be defined as a stream of wireless data. In finance it could be investment advice. And in software development it could be a smartphone operating system.

Your customers expect your core service to work according to specifications. They EXPECT uninterrupted wireless data service; they EXPECT the financial plan to deliver the benefits promised and they EXPECT a working O/S 100% of the time.

As a result when you provide working core service customers rate you “ok” and no more. However, when your core service is NOT working as promised you get an ‘F’ on your report card; they leave you and they don’t go quietly, they tell everyone how bad your organization is at serving customers!

Bottom line: your core service has to work ALL the time as promised.

But don’t expect loyal customers when you do.

Loyalty comes from the second component of serving customers - the service experience.

Whereas core service is what you get from an organization, the service experience is how you feel when you get it. Or it’s is the way you are treated by the organization when you do business with them.

If the service experience you provide is memorable; if it takes their breath away; if it blows people away; if it WOW’s them; if it ‘DAZZLE’s’ them, you get a ‘A’ on your Report Card.

And you are rewarded with customers telling others how great you are; they stay with you at least until you deliver a de-dazzling event which puts everything in jeopardy.

So, how to create customer loyalty?

Provide core service in a satisfactory manner ALL THE TIME - consistency is key here.

Once you have risen to this challenge you have earned the right to move on to loyalty building by providing dazzling service experiences every time a customer touches you.

Cheers,
Roy

BE DiFFERENT or be dead Book Series

  • Posted 5.26.14 at 05:38 am by Roy Osing
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May 19, 2014

Why are customers not treated as assets?

When asked to identify their valuable assets, many mention things like people, employees, shareholders or technology.

Their customers are rarely mentioned.

Asset value is measured on the returns generated by them.

Have you ever calculated the Future Value (revenues) of your top 10 customers over a future period?

It is a HUGE number.

If you have 5 customers spending a total of $5 Million per year with you, and they are with you for another 10 years, at the end of the decade 10 they are “worth” about $75 million (at an implied interest rate of 5%).

Would you say an asset worth $75 million should attract your investment attention?

I would think so, yet most organizations don’t think of their existing customer base as assets requiring investment to maintain.

My observation is organizations almost ASSUME customers will be loyal and will stay with little or no attention. How often does your CEO call your largest customer?

The irony is that most organizations are quite willing to throw money at trying to acquire NEW customers by offering freebies (come over and get a free 42” LG LED TV) and special promotions (come over and get the first 3 months free) to entice people to leave their existing supplier.

A new customer acquired isn’t an asset until they have proven their loyalty.

Why invest in a POTENTIAL asset when you have current assets that require attention?

Doesn’t make much sense to me.

Lavish the goodies on your “$75 million Club”.

They will return the favour.

Cheers, Roy

BE DiFFERENT or be dead Book Series

  • Posted 5.19.14 at 03:23 am by Roy Osing
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May 12, 2014

How to do performance plans in 5 easy steps

Do organizations need a performance planning system?

YES, if you want to create a pay-for-performance culture.

YES, if you want to align employee actions with the priorities of the organization.

YES, if you want performance to improve over time.

YES, if you want objectivity in how performance is evaluated.

NO, if you prefer subjectivity, no structure and dysfunction in the organization as everyone does their own thing.

For the “Yes’s” follow these 5 simple steps to build a performance management system that works.

1. Decide on the COMPONENTS of your plan. I suggest two: one for Corporate results; one for Personal results. I don’t agree with the 4-component “Balanced Scorecard” method; too complicated; too many messages to employees; too many objectives. Focus on the critical FEW rather than the possible MANY.

2. WEIGHT each component. I suggest 75% Corporate; 25% Personal. These can be adjusted but I recommend a strong incentive to hit corporate targets.

3. SET CORPORATE OBJECTIVES. These objectives will be shared with every employee. I suggest no more than 3 or 4 that represent the priorities of the company. Choose metrics that people feel they can influence as well. My fav’s: Top line revenue, operating earnings (EBITDA),  quality of service as perceived by the customer.

4. SET PERSONAL OBJECTIVES. Make them quantifiable (a due date to compete a task works); no more than 3; align with corporate strategic goals.

5. REVIEW progress toward objectives with employees quarterly; the “Performance Evaluation Meeting”.

There you go. Done.

Work with it and improve it as you go.

Cheers, Roy

BE DiFFERENT or be dead Book Series

  • Posted 5.12.14 at 01:07 am by Roy Osing
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May 5, 2014

What it really means to not have the best service

Some organizations talk about providing customer service but what they really mean is enforcing their rules that define how customers are “allowed” to do business with them.

How they buy a product. How they get information on products. How they pay. How they register a complaint.

Customer service isn’t about controlling people. Nor forcing them to do things they don’t want to do.

It’s about SERVING them.

Who typically influences the rules that control customer engagement? Internal Auditors. Systems Analysts. Process Engineers. Efficiency Experts. All focused on “the inside”.

Something’s missing.

It’s about time the REAL “C-Suite” be invited to help design the customer engagement process and the rules that should govern it.

Do you regularly review your rules, policies and procedures with your customers?

Do you allow THEM to help determine what they should look like?

Cheers, Roy

BE DiFFERENT or be dead Book Series

  • Posted 5.5.14 at 03:58 am by Roy Osing
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