Archive for February, 2010

Why the nonessential is vital

Tuesday, February 23rd, 2010

AllstateRecently, I had an epiphany. It occurred to me that the most important aspects of my job (and likely yours) are nonessential.

Think about it. Most jobs consist of a set of essential job tasks that define a job role. These tasks might be described as mandatory job functions—the bullet points that make up a job description.

To the extent that employees define their job roles according to these mandatory functions, they will often describe their work as routine and monotonous. These employees presumably will view the essence of their jobs (their highest priority) as the successful execution of their assigned job tasks.

Sounds pretty boring, huh?

That’s because all of the fun usually resides within the dimensions of our work that may not appear in our job descriptions. I’m referring to those aspects of our jobs that are creative, interesting, and unexpected.

Customers describe these actions as “beyond the call of duty” or “going the extra mile.” In most cases, these tasks or behaviors are optional and support the true essence of our jobs (creating delighted customers).

Since these tasks and behaviors are optional, they’re seen as nonessential, unimportant, and elective. Because of this, as customers we don’t always experience them. But when we do, it makes an impression and reinforces our loyalty.

Here’s a recent example:

Many consumers see insurance as a commodity and regularly compare rates to determine whether or not they can find a lower premium. After all, as long as the essential elements of an insurance policy are present (sufficient coverage, reasonable deductible, affordable premium, etc.), insurance is insurance, right?

Maybe not.

For instance my Allstate agent, Kevin Johnson, recently emailed me a link to enroll in an electronic billing discount program offered by Allstate that he and I had previously discussed. I happened to be traveling when his email arrived and never got around to enrolling.

As my renewal deadline approached, Kevin took the time to personally enroll me and then sent me my user name and password with a short note saying, “I know you are running 100 miles an hour and we want to make sure you get the discount.”

Was Kevin’s action essential? No, it was optional. And, as it turned out, saved me about $115. Because of actions like this, I don’t compare rates with his competitors to see if I can find cheaper insurance. Why would I risk losing the personal attention I receive?

So while the essential aspects of my insurance policy have little to do with whether or not I decide to renew, shop around for a better rate, or recommend Kevin and Allstate to others, the nonessential aspects are vital to these decisions.

What are some nonessential aspects of your own job that are vital to your success?

Without competition, quality suffers

Thursday, February 18th, 2010

OlympicsLast night I was watching the men’s 1000 meter Olympic speed skating event at the Winter Games. The defending Olympic champion, Shani Davis, dominated the field of skaters, winning the gold medal.

What was interesting to me was a remark by one of the television commentators. He said that Davis, an American citizen, lives and trains in Vancouver—just outside the Olympic Village—and that one of his good friends, Denny Morrison, is a member of the Canadian speed skating team. For two years before the Torino Games they trained together in Calgary, pushing each another to excel.

The commentator went on to say that, for competitive reasons, the coach of the Canadian team would not allow competing skaters to practice against the Canadian skaters before this year’s games. He suggested that this decision might have been short-sighted, as members of the Canadian team may have benefited from competition beyond what was comfortable and familiar to them.

That got me thinking about the nature of competition in business.

Intuitively, business operates with a scarcity mentality that suggests that there is a finite “pie” and that, if you get a larger slice of the pie, then I somehow get less. That’s why companies file patents and trademarks—to protect their intellectual property, conceal it from competitors, and use it to gain a competitive advantage in the marketplace.

The most successful businesses do not operate from a position of fear and scarcity. They lead from a position of confidence and abundance. These companies recognize that the “pie” is not finite. The size of your slice of the pie has little to do with the potential size of my slice because the pie has the capacity to grow exponentially.

This brings to mind an old Xerox print ad. In one frame, a little boy’s lemonade stand was suffering at the hands of a little girl’s competing lemonade stand, where a line had formed.

In the next frame, the boy had added a vase with a single rose to his lemonade stand and, to the girl’s dismay, the line had moved to her competitor’s stand.

The caption beneath the second frame read: “When companies compete, products get better.”

Whether in athletics, business, or another endeavor, competition is not something to fear and avoid. It should be welcomed and embraced. From a business perspective, all of us have something to learn from our competitors that will enable us to improve the product and service quality we deliver to customers.

What will your lesson be?

My commitment to Tiffany and Co.

Saturday, February 13th, 2010

tiffany_boxII_thumbI was in New York City for a business trip a week or so before my 10-year wedding anniversary. One afternoon, I stopped by the Tiffany & Co. flagship store on 5th Avenue to look at anniversary rings.

A thoughtful representative named Duncan showed me several rings as he explained some of the nuances of color, cut, clarity, and carat weight.

The rings looked magnificent beneath the showroom lights. I recall that of the half dozen or so rings that I looked at, there was one that I kept going back to. Duncan noticed it too. And, of course, it cost 25 percent more than the others.

After about 30 minutes together, I thanked him for his time and told him that I wouldn’t be buying the ring today. I mentioned that I had an appointment in two days with a representative at the Denver location of Tiffany & Co. He congratulated me on my 10-year anniversary and wished me luck in finding the perfect ring.

Two days later I arrived at the Denver location of Tiffany & Co. and met with a representative named Cynthia. Cynthia brought me into a private room to show me a set of anniversary rings that she had selected based on the criteria we discussed. As she revealed each successive ring, she would say something like, “Now, this ring combines the color you are hoping for with the mounting we talked about.”

After introducing several rings in this way, Cynthia produced the final ring saying, “Now, this is the ring that you were especially taken by when Duncan was showing you rings at the 5th Avenue store on Tuesday.”

I was absolutely floored! I said something like, “Huh? What? How did you…?”

Cynthia sensed my astonishment, smiled, and then explained that she had received a call from Duncan shortly after I’d left the 5th Avenue store and that together they had made arrangements for the ring to be shipped overnight from New York City to the Denver location of Tiffany & Co. in time for my appointment.

Duncan and Cynthia worked together to deliver customer service that was completely beyond the realm of customer expectation. I had no reason to expect that the ring I’d looked at in New York would be among the options made available to me in Denver.

Does this level of customer service influence sales? Guess which ring I bought?

I wrote to the president of Tiffany & Co. about his employees’ legendary service and committed to “never purchase a significant piece of jewelry from a jeweler other than Tiffany & Co.”

After customers make such a commitment, there is no coupon or incentive program out there that is strong enough to lure them—and their future spending—away.

How about you? What retailer or brand are you committed to and why?

Respond (don’t just react) to critical customer feedback

Tuesday, February 9th, 2010

Annoyed customer copyI spent a fair amount of time last month on TripAdvisor, Hotels.com, Yelp, and other websites offering hotel reviews. A majority of those reviews were written by hotel guests whose experiences were either very good or a very bad. It seems that when guests have an ordinary or typical experience, they’re not as motivated to write a review.

Social media provides a wealth of feedback for companies that are committed to continuous improvement of the guest’s experience. Some managers react to negative feedback from hotel guests by researching the reservation, perhaps confirming details associated with the complaint, and then following up with an appropriate remedy (e.g., phone call, letter, issue a partial refund, etc.).

These remedies, absent root cause analysis and long-term solutions, are simply band-aids that allow problems to perpetuate. Unless managers also respond to this feedback by identifying the root cause(s) of the problem and then addressing it in a way that resolves or mitigates the issue for future guests, the problems—and their attendant complaints—will inevitably return.

Below are three issues that contributed to negative hotel reviews on one or more of the above websites, followed by solutions offered by seasoned hoteliers with whom I’ve worked:

1.) Elevator was out of service resulting in delays and inconvenience.

I spoke with a general manager who operates a select service hotel with 104 guest rooms located on one of three levels. Of course, with a hotel with multiple levels, guests expect an elevator. Unfortunately, they lost the use of their elevator for several weeks due to a crucial part being on back order.

Guests were inconvenienced by having to go up and down stairs—especially when these trips involved luggage. Several days into it, as guest complaints increased and the extent of the repair delay became evident, he made a decision. He and his team implemented a unique strategy for selling third floor rooms.

When customers accessed the brand’s website or 800 number, they were redirected to the hotel where they received a personal explanation of the elevator issue in order to avoid any unpleasant surprises when they arrived at the hotel. While the hotel was offering a rate of $189 per night for most of its inventory, they began offering third floor rooms for $99-$119 per night, based on occupancy.

The third floor rooms were selling out first! Occupancy and guest satisfaction (due to the proactive communication of the staff and the value created by a discount of $70-$90 per room per night) actually increased during the period of time that the elevator was out of service!

2.) Breakfast buffet was poorly stocked and serviced.

I spoke with another general manager of a select service hotel who had been receiving disappointing breakfast scores from her guests and learned that the critical feedback had to do with several factors:

  • limited visibility and accessibility of the dining room attendant
  • tendency to run out of coffee, muffins, and other popular breakfast items
  • too much time to replenish depleted items

After reviewing the feedback, examining the breakfast process, and identifying potential remedies with her team, she made the decision to relocate the food storage and preparation from the Housekeeping area (which was more than 100 feet away) to an area that was closer to the breakfast room.

How did they do it? That’s the best part! Rather than seeing the limitations of the existing square footage as a barrier, they rethought the current use and purpose of the space. They decided to consolidate the seldom used lobby men’s and women’s restrooms into one unisex restroom.

Next, they converted the remaining space into a food storage and preparation area just 3 feet from the breakfast room!

This addressed each of the primary customer complaints: Now the attendant is visible/accessible, the buffet seldom runs out of coffee, muffins, and other popular breakfast items, and depleted items are replenished in a timely manner!

3.) Felt ignored by the wait staff in the lounge.

Just last week I spoke with the assistant general manager of a full service hotel in New York City who is preparing to implement an idea to encourage servers to make a genuine connection with lounge guests.

He is planning to have the Micros point of sale software require guests’ names and drink preferences prior to opening a ticket. The objective is to prompt servers to capture guests’ names early in order to use it throughout the service experience—not just when the check is settled.

And capturing a record of guests’ preferred drinks enables servers to anticipate the drink orders of repeat guests. Not only does this have a positive effect on guest service, it also allows management to better anticipate inventory requirements.

For instance, if a majority of guests prefer vodka and the bar stocks a dozen brands of tequila, then management will be able to utilize the data regarding guest preferences to make better use of their limited inventory and selection.

Each of these examples illustrates how managers can, by responding (not just reacting) to critical feedback, address the problems experienced by past guests while improving the service experience for future guests.

How about you? What problems are you aware of in your own business that require a long-term fix but remain unresolved for one reason or another? What steps can you take today to resolve or mitigate these issues for future customers?

Problems may bolster satisfaction

Monday, February 8th, 2010

jd-powerTime and again research confirms that customer encounters in which a problem is resolved quickly and efficiently receive higher satisfaction scores than situations in which there was no problem reported.

Obviously, each customer is different with respect to his temperament and tolerance for mistakes. But dropping the ball here or there can turn out to be a good thing if the problem is properly resolved.

Using a hotel example, imagine you’ve just been asked to answer a satisfaction survey about a recent hotel experience. As you reflect on how satisfied you were with different elements of your stay, you consider all the touch points in which you experienced the facility and interacted with the hotel staff:

  • The friendliness of the hotel employees
  • The timeliness of check-in
  • The ambiance of the hotel (interior design and décor)
  • The amenities offered in the guest room
  • The value for price paid

According to analysis by J.D. Power and Associates, hotel guests who experienced one or more problems during their stay rate their overall experience lower than those that did not report having any problems (74.9 vs. 61.2 percent). This may seem obvious. Poor television reception, a noisy A/C unit, or a missed wakeup call are certain to have a negative impact on how you feel about your stay when you respond to the survey.

But not everyone who has a problem is destined to give a low rating. The determining factor is not whether you had the problem, but how the hotel’s staff made you feel about how the problem was addressed and resolved.

For example, if the hotel scores a “perfect 10” for problem resolution, overall satisfaction for the entire stay is higher than for guests who never experienced a problem to begin with. Do a poor job fixing the problem, however, and overall satisfaction drops below 60 percent!

So, while it pays to resolve guest complaints quickly and efficiently, according to research only 15 percent of guests felt that their hotel’s staff had resolved the problem perfectly, compared to nearly half who expressed outright displeasure at the staff’s problem resolution skills.

How well-prepared are your employees to effectively address and resolve the inevitable problems that your customers will encounter?

Contact Steve

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