Sorry it has been so long since I last wrote – will shorten the time between posts from now on!
The earlier posts listed tips 1 – 6 for maximizing the return from your online affiliate marketing* efforts. Here are tips 7 - 10.
Tip #7
Don’t waste your money on banner advertising. These days most people ignore the promotional messages on the top of web pages. So... unless you can afford to pay for specially targeted Google adwords, put your promo money into more traditional ways advertising methods... or build up your online presence as explained in Tip #6.
Tip #8
Use “under the radar” promotional vehicles. Many affiliate marketers succeed by advertising their “online” products in traditional bricks ‘n mortar ways/ more “mass media” ways. If you’re on a budget, and most affiliate marketers are in the early days, consider selling your affiliate products using community boards, school and club flyers, etc.
I can almost hear you saying, “Yeah, right”. But... think about what happened with one affiliate marketer in our area. Janice spent nearly 5 hours one day going to local schools, churches, grocery stores and community centres; at each location she posted a flyer (you know, the kind with tear off info strips at the bottom).
Confirmation of her first order was waiting in her mailbox when she got home. With 10 days, Janice was averaging 20 – 25 orders a day. That may not sound like much, but with a commission of $9 per order, those bulletin board flyers added up to over $6,000 a month. Yes, every 3 – 4 weeks, Janice had to replace the flyers, but 4 - 5 hours a month to earn $6,000 seems like a pretty good return on time investment. Yesterday Janice told that she is going to spend her entire weekend armed with flyers and a stapler. Her goal: To triple the places where people will be able to learn about her affiliate product.
Tip #9
Get free radio advertising. If you can find something to talk about that is related to your affiliate product and to a topic that is in the news, you may be able to get radio talk show hosts to interview you on air. Add in a free product as a give away, and you‘ll get interested people to pay attention.
Be willing to get up early, stay up into the wee hours of the night and invest in long distance calls and you’ll find that you have customers across North America.
Tip #10
Advertise for free. Craigslist, Kijiji and other classified advertising sites will let you post an ad for free. For best results, be sure to include a photo of your product.
Well that’s it for now. Good luck with your online affiliate sales! JMC
Wednesday, December 15, 2010
Wednesday, October 20, 2010
10 Tips for Online Affiliate Success – Tips 3 and 4
In my last post I gave you the first two of ten tips for maximizing the return from your online affiliate marketing* efforts. Here are tips 3 and 4.
Tip #3
Create communities related to your niche to leverage the power of social media sites working synergistically.
How? If your niche is golf, for example, then all the social media tools you put to work should focus on golf… and only on golf-related info, products and services. Not on sports in general, but on golf. Just golf.
Some of the things you can/should do to create communities:
• Choose a URL (domain name) that has golf in the title. This will enable you to have an e-mail address with a golf-related suffix (e.g. yourname@golf.com). All things being equal, this will produce much better results than having a “free” or generic e-mail address. It will also help raise your website in the returned search results – and it’s one of the basic Search Engine Optimization tenets.
Make sure that you have plenty of golf-related content on your website to keep the search engine crawlers happy and to help you with page rank.
Make it easy for people to find your products and buy your products on your site - they should be able to get to where you want them to take action within 3 clicks.
• Choose a twitter name that has golf in the title. This will signal that your primary interest is indeed golf and help people interested in golf to find you... and make them more likely to follow you. Make sure you use the bio section to talk about your golf passion and/ or business’ experience re golf, etc. Also, create a twitter background that shows golf images – and have it created so that the image fills your page, rather than tiling a smaller image (when you tile, the image is repeated over and over and over again on your page).
• Choose a blog title (the name you give your blog) with the word golf in it and create a banner for your blog that shows golf images (which you alt tag with the word golf).
Make all your posts about golf-related topics and use blog post titles that contain the word golf, or a content-relevant golf term. Your blog content should include your own golf experiences as often as possible/appropriate so that your personal passion for the subject shines through.
You can include affiliate sales links on your blog - but don't overwhelm your visitors. They are turning to your blog to get info or be entertained, not to be sold.
• Create a facebook business/fan page that has golf in its name. Again, golf images need to be used… and if you are going to include a picture of yourself, make sure you are in golf attire. Use this page to sell your material by posting a blurb and link under your picture.
From time to time, update your page with info about your affiliate products... and message your fans, occasionally, too.
• Ditto re your YouTube Channel.
• Join other social networking sites and choose screen/user names that contain the word golf. If possible, use your facebook or twitter name (if they are not one in the same). Link back to your facebook fan page (where
• Interlink each of these online “presence makers” and encourage visitors to one “site” to visit the others to help drive traffic and establish connections between your various communities of followers.
• Leverage automation tools such as ping.fm so you can syndicate one message to more than one of your social media accounts. Consider using an RSS feed as well to automatically post great content about your niche to your social media sites. (Thanks to Maria Gudelis from Wildhorse Performance Marketing for this tip’s phrasing.)
Once you have created communities, and people have come to know you and trust you, you will find it easier to sell products to this group – just make sure that all the affiliate products you create or choose to sell are golf-related to maintain credibility within your community.
Tip #4
Create digital videos and add them to your blog posts, website, facebook page, YouTube, etc. There are people who search for/ click through to videos rather than printed info, so you will miss a growing portion of potential online traffic if you ignore video.
Make your video as professional as you can and stick to one single golf-related topic per “movie”. This will help you stick to YouTube maximum time length of 15 minutes or 2GB (unless, of course, you have a professional account and then you have unlimited time length).
Also, do not try to sell material with all of your videos. Current “best practices” say to make sure that at least 75% of your material is aimed at providing information, not at selling. Yes, include links (or verbal references) to sites where you do sell stuff, but do not make that the focus of your message. This alone will increase your referral and view rate… leading to increased sales.
An important production tip (sounds obvious but…): Make sure your video and audio lengths are the same length.
There are many simple online tools for creating videos, including animoto and Windows Movie Maker. Practice, record, review, get input from people you trust, edit and/or re-record as necessary. When you’re ready, upload your video in the original format in the highest quality possible.
YouTube supports the following file formats:
• WebM files (Vp8 video codec and Vorbis Audio codec)
• .MPEG4, 3GPP and MOV files - (typically supporting h264 and mpeg4 video codecs and AAC audio codec)
• .AVI (Many cameras output this format - typically the video codec is MJPEG and audio is PCM)
• .MPEGPS (Typically supporting MPEG2 video codec and MP2 audio)
• .WMV
• .FLV (Adobe - FLV1 video codec, MP3 audio)
Note: YouTube prefers de-interlaced file (de-interlacing: the process of converting interlaced files such common analog television signals and 1080i format HDTV signals, into a non-interlaced form). If you are recording your video online or using a digital recording device, you don’t need to worry about this.
Once you are happy with your video (not just satisfied), you are ready to upload, you can use free automation tools such as tubemogul to submit your movie to multiple video-sharing sites simultaneously.
Caution: Make sure you really are happy with your video because it is not possible to re-upload videos to YouTube (you’ll have to delete, rename and upload as though for the first time). Once a video becomes popular, the number of views, user ratings, user comments and other community data, cannot be transferred if another, higher quality version of the same video is uploaded.
Well, that’s it for now. Tips 5 and 6 will be posted shortly – but why not sign up for this blog so that you are notified when I post them?
Until then, have fun and remember: “You must be prepared to go out on a limb because that is where the fruit is!”
Tip #3
Create communities related to your niche to leverage the power of social media sites working synergistically.
How? If your niche is golf, for example, then all the social media tools you put to work should focus on golf… and only on golf-related info, products and services. Not on sports in general, but on golf. Just golf.
Some of the things you can/should do to create communities:
• Choose a URL (domain name) that has golf in the title. This will enable you to have an e-mail address with a golf-related suffix (e.g. yourname@golf.com). All things being equal, this will produce much better results than having a “free” or generic e-mail address. It will also help raise your website in the returned search results – and it’s one of the basic Search Engine Optimization tenets.
Make sure that you have plenty of golf-related content on your website to keep the search engine crawlers happy and to help you with page rank.
Make it easy for people to find your products and buy your products on your site - they should be able to get to where you want them to take action within 3 clicks.
• Choose a twitter name that has golf in the title. This will signal that your primary interest is indeed golf and help people interested in golf to find you... and make them more likely to follow you. Make sure you use the bio section to talk about your golf passion and/ or business’ experience re golf, etc. Also, create a twitter background that shows golf images – and have it created so that the image fills your page, rather than tiling a smaller image (when you tile, the image is repeated over and over and over again on your page).
• Choose a blog title (the name you give your blog) with the word golf in it and create a banner for your blog that shows golf images (which you alt tag with the word golf).
Make all your posts about golf-related topics and use blog post titles that contain the word golf, or a content-relevant golf term. Your blog content should include your own golf experiences as often as possible/appropriate so that your personal passion for the subject shines through.
You can include affiliate sales links on your blog - but don't overwhelm your visitors. They are turning to your blog to get info or be entertained, not to be sold.
• Create a facebook business/fan page that has golf in its name. Again, golf images need to be used… and if you are going to include a picture of yourself, make sure you are in golf attire. Use this page to sell your material by posting a blurb and link under your picture.
From time to time, update your page with info about your affiliate products... and message your fans, occasionally, too.
• Ditto re your YouTube Channel.
• Join other social networking sites and choose screen/user names that contain the word golf. If possible, use your facebook or twitter name (if they are not one in the same). Link back to your facebook fan page (where
• Interlink each of these online “presence makers” and encourage visitors to one “site” to visit the others to help drive traffic and establish connections between your various communities of followers.
• Leverage automation tools such as ping.fm so you can syndicate one message to more than one of your social media accounts. Consider using an RSS feed as well to automatically post great content about your niche to your social media sites. (Thanks to Maria Gudelis from Wildhorse Performance Marketing for this tip’s phrasing.)
Once you have created communities, and people have come to know you and trust you, you will find it easier to sell products to this group – just make sure that all the affiliate products you create or choose to sell are golf-related to maintain credibility within your community.
Tip #4
Create digital videos and add them to your blog posts, website, facebook page, YouTube, etc. There are people who search for/ click through to videos rather than printed info, so you will miss a growing portion of potential online traffic if you ignore video.
Make your video as professional as you can and stick to one single golf-related topic per “movie”. This will help you stick to YouTube maximum time length of 15 minutes or 2GB (unless, of course, you have a professional account and then you have unlimited time length).
Also, do not try to sell material with all of your videos. Current “best practices” say to make sure that at least 75% of your material is aimed at providing information, not at selling. Yes, include links (or verbal references) to sites where you do sell stuff, but do not make that the focus of your message. This alone will increase your referral and view rate… leading to increased sales.
An important production tip (sounds obvious but…): Make sure your video and audio lengths are the same length.
There are many simple online tools for creating videos, including animoto and Windows Movie Maker. Practice, record, review, get input from people you trust, edit and/or re-record as necessary. When you’re ready, upload your video in the original format in the highest quality possible.
YouTube supports the following file formats:
• WebM files (Vp8 video codec and Vorbis Audio codec)
• .MPEG4, 3GPP and MOV files - (typically supporting h264 and mpeg4 video codecs and AAC audio codec)
• .AVI (Many cameras output this format - typically the video codec is MJPEG and audio is PCM)
• .MPEGPS (Typically supporting MPEG2 video codec and MP2 audio)
• .WMV
• .FLV (Adobe - FLV1 video codec, MP3 audio)
Note: YouTube prefers de-interlaced file (de-interlacing: the process of converting interlaced files such common analog television signals and 1080i format HDTV signals, into a non-interlaced form). If you are recording your video online or using a digital recording device, you don’t need to worry about this.
Once you are happy with your video (not just satisfied), you are ready to upload, you can use free automation tools such as tubemogul to submit your movie to multiple video-sharing sites simultaneously.
Caution: Make sure you really are happy with your video because it is not possible to re-upload videos to YouTube (you’ll have to delete, rename and upload as though for the first time). Once a video becomes popular, the number of views, user ratings, user comments and other community data, cannot be transferred if another, higher quality version of the same video is uploaded.
Well, that’s it for now. Tips 5 and 6 will be posted shortly – but why not sign up for this blog so that you are notified when I post them?
Until then, have fun and remember: “You must be prepared to go out on a limb because that is where the fruit is!”
Saturday, October 16, 2010
10 Tips for Online Affiliate Success - #s 1 and 2
These days, everyone claims that it is soooo easy to make money online and that social media is touted as a panacea for just about every marketing ailment. Neither is true. What is true is that there are things you can do to dramatically increase the likelihood of being successful in cyberspace.
Over the next little while, I’ll share some of the secrets that are rapidly becoming truisms for people in the industry.
To start, here are the first two tips for maximizing the return from your online affiliate marketing* efforts:
1) Promote products in categories where online buyers will eat them up the way Pacman ploughs through power pills, rather than choosing items that only get the occasional nibble.
At the moment the “hot” B2C categories are related to...
• Business Success
• Making Money Online
• Marketing
• Gambling (though you may want to stay away from this for a variety of business reasons)
• Dating
• Health and Fitness
• Weight Loss
• Self Improvement and Motivation
• Real Estate Investing
• Home and Gardening
• Pharmaceuticals
• Nutrition
If you business does not fall into one of these categories, don’t despair; there are plenty of ways you can still run a successful affiliate program.
One of the options available is the forming of relationships with businesses that complement your own, and becoming one of their affiliates to create new revenue streams for your company. Just make sure that you do not detract from your core business in any way.
2) Concentrate on one product niche at a time.
You can have multiple target audiences for this niche, and multiple approaches for reaching your prospects, but don’t confuse your audience by trying to be too many things to them at once.
Instead, stick to the basic marketing principle that says single-minded focus has the power of a laser when it comes to creating sales.
Not only that, but you need to really understand your online customers in order to build a relationship with them and maximize the sales potential of this relationship.
The next two tips will be in my next post, but in case you were wondering...
About Affiliate Marketing
If you are the online affiliate, your job is to promote someone else’s products and/or services. In exchange, you will receive a commission when your site visitors click on the link provided and purchase the product. The other site owner collects the money, ships the item(s) and handles every other aspect of the customer transaction. This means you should only choose to work with companies with customer service standards that match your own.
If you are the owner of a product or service with an affiliate program, your will pay sales commissions to people who drive traffic to your site that results in a sale. You will remain in control of every aspect of the transaction and product delivery process, including who can promote your product. Hint: The more generous your affiliate commissions, and the better your reputation good products and customer service, the more likely online marketers will be to actively promote your offering.
Whether you are an affiliate, or an online affiliate program manager, you will need to take action to be successful and, as you have heard me say so often before, “You must be prepared to go out on a limb because that is where the fruit is!”
Over the next little while, I’ll share some of the secrets that are rapidly becoming truisms for people in the industry.
To start, here are the first two tips for maximizing the return from your online affiliate marketing* efforts:
1) Promote products in categories where online buyers will eat them up the way Pacman ploughs through power pills, rather than choosing items that only get the occasional nibble.
At the moment the “hot” B2C categories are related to...
• Business Success
• Making Money Online
• Marketing
• Gambling (though you may want to stay away from this for a variety of business reasons)
• Dating
• Health and Fitness
• Weight Loss
• Self Improvement and Motivation
• Real Estate Investing
• Home and Gardening
• Pharmaceuticals
• Nutrition
If you business does not fall into one of these categories, don’t despair; there are plenty of ways you can still run a successful affiliate program.
One of the options available is the forming of relationships with businesses that complement your own, and becoming one of their affiliates to create new revenue streams for your company. Just make sure that you do not detract from your core business in any way.
2) Concentrate on one product niche at a time.
You can have multiple target audiences for this niche, and multiple approaches for reaching your prospects, but don’t confuse your audience by trying to be too many things to them at once.
Instead, stick to the basic marketing principle that says single-minded focus has the power of a laser when it comes to creating sales.
Not only that, but you need to really understand your online customers in order to build a relationship with them and maximize the sales potential of this relationship.
The next two tips will be in my next post, but in case you were wondering...
About Affiliate Marketing
If you are the online affiliate, your job is to promote someone else’s products and/or services. In exchange, you will receive a commission when your site visitors click on the link provided and purchase the product. The other site owner collects the money, ships the item(s) and handles every other aspect of the customer transaction. This means you should only choose to work with companies with customer service standards that match your own.
If you are the owner of a product or service with an affiliate program, your will pay sales commissions to people who drive traffic to your site that results in a sale. You will remain in control of every aspect of the transaction and product delivery process, including who can promote your product. Hint: The more generous your affiliate commissions, and the better your reputation good products and customer service, the more likely online marketers will be to actively promote your offering.
Whether you are an affiliate, or an online affiliate program manager, you will need to take action to be successful and, as you have heard me say so often before, “You must be prepared to go out on a limb because that is where the fruit is!”
Thursday, October 14, 2010
Sometimes You NEED to Say “No” to Your Boss or Client
I recently heard someone say that you must never say “no” to a client. I beg to disagree. That’s only true to a certain degree.
There are several instances when saying “no” the best thing you can do to help your boss, company, client or others. The top three:
1. When they are wrong. Yes, the old adage is that the customer is never wrong. If, however, what they want to do will adversely affect the company (yours or theirs), you have an obligation to say “no”. Politely, diplomatically and in a way that gives those involved the facts and lets everyone save face – but firmly, nevertheless. It is your responsibility to look out for the best interests of your client and/or company.
There will be times when your recommendations are overlooked, but you still have an obligation to speak up and say “no” if necessary. In these situations it’s usually a good idea to put your thoughts in writing. Having a quick memo which outlines the matter objectively, gives solid reasons as to why you disagree and offers an alternative solution may give the other parties an opportunity to really hear what you have to say and be persuaded. This paper trail could also serve as a CYA in case their “bad” decision comes back to haunt you personally.
2. When you know that you really cannot meet their deadline, no matter what you try. Yes, I believe that you should try to move heaven and earth to meet a client’s request when possible. Ditto when it comes to meeting your boss’ challenges. However, when you know you will not be able to meet the deadline, you must say so as soon as possible to give the other person a chance to find an alternate solution.
It is far worse to say “yes” and then let the person down, than it is to say “no” at the outset.
3. When you know the other person does not have all the facts. There are times when information has not flowed along corporate lines the way in an ideal manner. When another individual is making decisions based on faulty info, you have an obligation to say “no” and step up to the plate with the correct data... even if it puts you and/or your collegauges in a bad light temporarily. Believe me; it’s far better to take a moment’s worth of heat than it is to let major errors compound the existing problem.
There are also times when you need to say “no” to maintain balance in your work and personal life. To read more about that, please go to: http://www.theqgroup.com/articles-b.php?ArtID=39
There are several instances when saying “no” the best thing you can do to help your boss, company, client or others. The top three:
1. When they are wrong. Yes, the old adage is that the customer is never wrong. If, however, what they want to do will adversely affect the company (yours or theirs), you have an obligation to say “no”. Politely, diplomatically and in a way that gives those involved the facts and lets everyone save face – but firmly, nevertheless. It is your responsibility to look out for the best interests of your client and/or company.
There will be times when your recommendations are overlooked, but you still have an obligation to speak up and say “no” if necessary. In these situations it’s usually a good idea to put your thoughts in writing. Having a quick memo which outlines the matter objectively, gives solid reasons as to why you disagree and offers an alternative solution may give the other parties an opportunity to really hear what you have to say and be persuaded. This paper trail could also serve as a CYA in case their “bad” decision comes back to haunt you personally.
2. When you know that you really cannot meet their deadline, no matter what you try. Yes, I believe that you should try to move heaven and earth to meet a client’s request when possible. Ditto when it comes to meeting your boss’ challenges. However, when you know you will not be able to meet the deadline, you must say so as soon as possible to give the other person a chance to find an alternate solution.
It is far worse to say “yes” and then let the person down, than it is to say “no” at the outset.
3. When you know the other person does not have all the facts. There are times when information has not flowed along corporate lines the way in an ideal manner. When another individual is making decisions based on faulty info, you have an obligation to say “no” and step up to the plate with the correct data... even if it puts you and/or your collegauges in a bad light temporarily. Believe me; it’s far better to take a moment’s worth of heat than it is to let major errors compound the existing problem.
There are also times when you need to say “no” to maintain balance in your work and personal life. To read more about that, please go to: http://www.theqgroup.com/articles-b.php?ArtID=39
Thursday, October 7, 2010
Cold Calling Part II: Does in-person cold calling work?
The short answer to this perennial question: If you’re going to crash call, stick to small non-retail prospects.
In today’s tougher economic times, more and more companies are pushing their sales force to make cold calls... in person. Indeed, a June 2010 survey conducted by A.S. Danier & Co. suggests that in person cold calling has increased 20% since 2008.
The rationale: It’s harder to avoid someone who is standing right in front of you than it is to get off the phone or ignore a voice mail.
What’s not so rational is that...
• It costs a company far more to have sales reps driving around town than dialing around. Even if sales reps are on straight commission, they can make 10 – 12 the number of contacts (calling, but not getting past the gatekeeper does not count as a contact) by phone than they can in the same time period when working the phone.
• +85% of decision makers hate it when sales people “drop by” without an appointment.
Executive comments include:
“It suggests a complete lack of respect for my needs and makes me feel less respect for the company that sent the rep in to big me.”
“I hate it and really resent the intrusion.”
“It’s unprofessional – no ifs ands or buts about it.”
• Less than 10% of companies that require sales reps to spend part of their time doing “drop-bys” provide any training on how to make this a successful practice... and reps who are forced to call on corporate clients unannounced only make one sale on average for every 150 such visits. Hardly seems worth the effort.
Bottom line: The vast majority of corporate decision makers are reluctant to do business with reps who cold call in person. In other words, stop banging your head against the wall... and stop wasting your time knocking on cold doors.
Are there any exceptions to this? Absolutely.
After talking with 10 sales reps who use in-person cold calling successfully, and contacting some of the authors of good online articles, we found that the method works under the conditions below. (Okay, it’s not statistically valid research, but the consistency of the results suggests there is merit to what they had to say.)
In-person cold calling works when all of the following conditions exist:
1) When your product or service is one that is ideally-suited for smaller businesses.
When a company has fewer than 25 people, it is often run by an entrepreneur, and the culture is usually less formal than in larger firms. As a result, it frequently possible for the unexpected rep to get in to see the decision maker for a couple of minutes.
If not, then there is often someone who will give the rep enough info for the company to be qualified as a prospect (or not). Barring that, it is usually possible for the rep to get the business card of the decision maker so that a proper appointment can be made.
Note: This does not work well with busy retailers, however, because interrupting their sales efforts will alienate them... and the constant interruptions of the sales pitch diminishes the likelihood of a deal being closed in any event.
2) When the cost vs. benefit balance makes the decision an easy one.
When the rep can get to the point quickly and show the decision maker how the product or service will help – specifically – then there is a good chance the cold call will result in a follow-up appointment, or even a sale.
3) When the sales rep is prepared to put in the time and effort.
Sounds like a no-brainer, but many sales people give up for the day after 15 – 20 sales calls, without having made a sale. This can make them reluctant to make more calls – which leads to a vicious cycle of losing confidence in their ability to make sales, getting in to see fewer people, feeling depressed and then making less effort, which compounds the whole situation.
In reality it takes about 40 – 55 in-person cold calls to create a sale... and most sales reps do fewer drop-ins than that a day.
If a rep is willing to do a little homework, find out which buildings and parts of the city are home to smaller firms, and will keep good notes relating to how each of the firms he or she contacts can benefit for his or her product or service, then cold call visits can indeed lead to future sales. Many future sales.
In today’s tougher economic times, more and more companies are pushing their sales force to make cold calls... in person. Indeed, a June 2010 survey conducted by A.S. Danier & Co. suggests that in person cold calling has increased 20% since 2008.
The rationale: It’s harder to avoid someone who is standing right in front of you than it is to get off the phone or ignore a voice mail.
What’s not so rational is that...
• It costs a company far more to have sales reps driving around town than dialing around. Even if sales reps are on straight commission, they can make 10 – 12 the number of contacts (calling, but not getting past the gatekeeper does not count as a contact) by phone than they can in the same time period when working the phone.
• +85% of decision makers hate it when sales people “drop by” without an appointment.
Executive comments include:
“It suggests a complete lack of respect for my needs and makes me feel less respect for the company that sent the rep in to big me.”
“I hate it and really resent the intrusion.”
“It’s unprofessional – no ifs ands or buts about it.”
• Less than 10% of companies that require sales reps to spend part of their time doing “drop-bys” provide any training on how to make this a successful practice... and reps who are forced to call on corporate clients unannounced only make one sale on average for every 150 such visits. Hardly seems worth the effort.
Bottom line: The vast majority of corporate decision makers are reluctant to do business with reps who cold call in person. In other words, stop banging your head against the wall... and stop wasting your time knocking on cold doors.
Are there any exceptions to this? Absolutely.
After talking with 10 sales reps who use in-person cold calling successfully, and contacting some of the authors of good online articles, we found that the method works under the conditions below. (Okay, it’s not statistically valid research, but the consistency of the results suggests there is merit to what they had to say.)
In-person cold calling works when all of the following conditions exist:
1) When your product or service is one that is ideally-suited for smaller businesses.
When a company has fewer than 25 people, it is often run by an entrepreneur, and the culture is usually less formal than in larger firms. As a result, it frequently possible for the unexpected rep to get in to see the decision maker for a couple of minutes.
If not, then there is often someone who will give the rep enough info for the company to be qualified as a prospect (or not). Barring that, it is usually possible for the rep to get the business card of the decision maker so that a proper appointment can be made.
Note: This does not work well with busy retailers, however, because interrupting their sales efforts will alienate them... and the constant interruptions of the sales pitch diminishes the likelihood of a deal being closed in any event.
2) When the cost vs. benefit balance makes the decision an easy one.
When the rep can get to the point quickly and show the decision maker how the product or service will help – specifically – then there is a good chance the cold call will result in a follow-up appointment, or even a sale.
3) When the sales rep is prepared to put in the time and effort.
Sounds like a no-brainer, but many sales people give up for the day after 15 – 20 sales calls, without having made a sale. This can make them reluctant to make more calls – which leads to a vicious cycle of losing confidence in their ability to make sales, getting in to see fewer people, feeling depressed and then making less effort, which compounds the whole situation.
In reality it takes about 40 – 55 in-person cold calls to create a sale... and most sales reps do fewer drop-ins than that a day.
If a rep is willing to do a little homework, find out which buildings and parts of the city are home to smaller firms, and will keep good notes relating to how each of the firms he or she contacts can benefit for his or her product or service, then cold call visits can indeed lead to future sales. Many future sales.
Tuesday, September 21, 2010
Innovation – Simply Put
Today I received one of those e-mail stories that circulate through cyberspace. It’s a simple story, but it sure makes a point... with a lesson that is as apt for business as it is for personal matters. Here it is:
A blind boy sat on the steps of a building with a hat by his feet. He held up a sign which said: "I am blind; please help." There were only a few coins in the hat.Moral of the Story: Be creative. Be innovative. And reap the rewards.
A man was walking by. He took a few coins from his pocket and dropped them into the hat. He then took the sign, turned it around, and wrote some words. He put the sign back so that everyone who walked by would see the new words.
Soon the hat began to fill up. Many more people were giving money to the blind boy. That afternoon the man who had changed the sign came to see how things were. The boy recognized his footsteps and asked, "Were you the one who changed my sign this morning? What did you write?"
The man said, "I only wrote the truth. I said what you said but in a different way. I wrote: ‘Today is a beautiful day but I cannot see it.’"
Both signs told people that the boy was blind. The first sign simply said the boy was blind. The second sign told people that they were so lucky that they were not blind. Should we be surprised that the second sign was more effective?
Saturday, August 21, 2010
CSRs who insult customers cost you clients!
You might have already guessed from the headline that I had the “pleasure” of being insulted by a customer service rep... again. This time I brought it on myself. I called the company. The telephone company. I can already hear your groans. You know what it’s like; most of us have been subjected to that particular brand of torture. What’s really sad is that we all have such stories – no matter what carrier we use.
Even sadder: Customer Service reps who answer 1-800 lines are often the only people with whom customers interact on a regular basis, so if they don’t do a good job, companies risk losing their clients.
On three separate occasions over the past 10 days, I got off the phone appalled by how the call had been handled. I make it a point to be courteous and friendly when speaking with CSRs (or at least I start out that way) and if I had this many unfortunate experiences, I can only imagine the high numbers of clients across the nation who are being mistreated by call centre employees.
Story #1
I called a company with which I do a lot of business – in fact, my volume has now reached the point where I have been accorded VIP status. Too bad I don’t also get VIP treatment.
The rep who plucked me from the queue had “attitude” from the get go. Instead of asking for my account password, she barked: “Password”. When I replied, “Honey” (the correct answer), the woman with the big southern accent reprimanded me with a “Don’t you ‘honey’ me.” I’m sure that I was not the first person who had to endure this women’s bad mood because when the rep came on the line she was already spoiling for a fight.
Note to marketers:
Make sure that CSRs start their shifts in a positive frame of mind. Do periodic checks and give them enough breaks to help them stay fresh. Things I have used successfully with various call centres:
• Have CSRs and supervisors watch short humorous clips at the start of a shift and during breaks. America’s Funniest Videos and Just for Laugh Gags seem to work well.
• Encourage CSRs to post photos in their cubicle that make them happy. After a trying customer, have reps stand for a moment, shift their visual focus to one of their favourite photos and take a deep breath before taking the next call.
• After a truly annoying customer (I know, most customers can be annoying, but I’m talking about the truly trying ones), have reps read something humorous after their “stand, focus, breathe routine”. I find that 2 or 3 jokes or one of the Reader’s Digest “Life’s Like That” stories can be effective. (Sample stories can be found online at: http://www.readersdigest.ca/laugh_search.html.)
Yes, this means that there will be a 15 – 20 second lag between the calls, but the next calls will go far more smoothly and quickly as a result. (And yes, timed trials we conducted support this assertion.)
Story #2
This time, the rep was unable to resolve my problem and didn’t really understand it anyway. After multiple attempts, I quietly said something along the lines of, “I know from my own work that supervisors often have codes and access to files that other reps don’t. Could you please put me through to a supervisor.”
His answer: “No.”
Thinking he hadn’t understood (his English was not great), I tried it another way. Again, I was told no. No explanation, no apology, just a curt “no”. Then I heard a click followed by a brief silence and then a dial tone. The rep had hung up on me!
I had waited nearly 10 minutes to get to that rep and he had hung up on me!
I dialled again. And waited on hold listening to insipid music. Again. When I finally got through to the company and was able to find someone to whom I could complain, I was told that he had probably hung up on me because the company’s reps had to answer a certain number of calls an hour and I had “probably taken up too much of his time”. I was also informed that CSRs were expected to handle their own calls without having to call upon their supervisors. The implication was that my actions were the reason that the rep had been forced to hang up on me.
Needless to say, we are no longer dealing with that company.
Note to marketers:
• Train your CSRs adequately and do not let them on the lines until they thoroughly understand your product, how it works and how to deal with things that typically go wrong, and how clients should be handled.
• Although you may encourage your reps to resolve customer problems within a certain amount of time, do NOT assign your reps quotas or reward them for getting through calls in shorter and shorter periods of time. Instead, determine how to reward CSRs for how effectively they handle calls and how good a job they do of making clients feel like they have been well-treated.
• Ensure that CSRs know they must never hang up on customers, no matter what.
And now, the tale that promoted this week’s blog post in the first place:
Story #3
Once again, a company insisted it had not made a mistake despite evidence to the contrary.
What happened? The short version: My eldest asked me when her cell phone contract was up. Not realizing that she was thinking of getting her own Blackberry and taking over the payments herself (mom had been footing the bill for the past 10 years or so), my answer was a distracted, “Uh... this August”.
A few days later she came home and proudly showed me her new Blackberry. The twist: My daughter had gone with a new carrier – but had asked to keep her existing phone number. Without speaking with me – the person in whose name the phone was listed and the person who paid the bills – the carrier I had been with for 20 years let the number be ported out. The problem is that there had been 3 phones on a single shared plan.
As soon as I learned what happened I immediately called *** to see if there would be a problem. There was. Someone in “customer retention” (hah!) had taken all three numbers off the plan and had put the two remaining phones on a different, more expensive plan. All without talking to me, the person in whose name had been listed.
At first the rep suggested that my daughter had pretended to be me (which was not the thing to say if trying to ingratiate yourself to a customer). After I explained that was impossible because she had had to show her driver’s licence and another piece of ID in her own name to get her Blackberry, the rep admitted it was their fault... but added there was no way the plan could be reinstated because it no longer existed... even though this had all happened in the previous 90 minutes or so.
After agreeing to move my youngest’s phone to a student plan that was almost (but not quite) as good as the original one, I was told I would have to send them proof of university enrolment and ID. I faxed the papers the following day. 10 days later, I called to make a payment and found that I had been charged over $250: $100 for my eldest daughter cancelling the 1st cell phone 3 days before the contact end date (even though I was told this would be waived because it had only been a few days and because *** had not checked with me) and the rest was “over-minute use” because of the type of phone plan the retention rep had put us on.
When I explained that I had indeed faxed the papers, I got transferred. 7 minutes and 27 seconds later (according to my phone’s timer) I got to explain the whole story again to someone in the hopes of getting the charges reversed. The response, in a supercilious tone: “Well, if you had sent the papers in, then we would have them, wouldn’t we?”
Despite seeing red, and purple and a hazy green colour, I kept my cool and said that I could send a fax confirmation sheet to prove what I was saying. When the rep’s reply suggested that I was making it up, I hung up and tried again.
It took over two hours, but thanks to wonderful rep named Robin – who was the very first person to apologize – it will be resolved at the beginning of next week. (Though I did have to fax the original papers, a new note and the original confirmation notice twice more in the interim.)
Note to marketers:
• Let your CSRs know that it is never, ever, ever, okay to speak in a patronizing tone to customers or to be rude to them.
• Make sure your database can flag customers who repeatedly call in looking for rebates or giving you reasons why bills are not being paid, etc.
Then, when a client calls in, if there are no flags, make sure the CSR takes the customer’s side and tries to help – especially when the client has a long-term relationship with your company.
Even if there is a flag in place, CSRs need to treat the customers with respect (provided the client is not unreasonably rude) and listen objectively to what is being said. When uncertain about how to proceed, CSRs must know to involve their supervisors.
A few other suggestions to help keep the mood right
• Place mirrors next to the reps’ cubicles and encourage them to smile at themselves at the beginning of each call – but not during the call as it tends to distract CSRs.
• Don’t allow your CSRs to work double shifts as their ability to handle calls “nicely” and effectively diminishes the longer they answer calls.
• Provide CSRs with a quiet, phone-free place where they can take their breaks for people who want “silence” and an area where people can watch funny flicks if they prefer.
• Discourage reps from complaining about their callers during their breaks or they will return to their headsets more stressed than before the break. Again, this is supported by blood pressure experiments we conducted in multiple call centres.
• Provide free tea, coffee, pop, water and light snacks in the rest areas. When people return to their stations refreshed, rehydrated and reenergized, their ability to deliver excellent customer service increases significantly.
As mentioned at the outset, the Customer Service Reps who handle your inbound calls are often the only people with whom your customers speak on a regular basis. If these CSRs don’t do a good job, you risk losing customers. On the other hand, if they provide excellent service, you will likely enjoy a corresponding increase in customer loyalty. So... it makes sense pay CSRs well and treat them even better.
If you would like more on info on this topic, please feel free to contact me: jmc@theQgroup.com or 416-424-6644.
Regards, Jane-Michele Clark
Even sadder: Customer Service reps who answer 1-800 lines are often the only people with whom customers interact on a regular basis, so if they don’t do a good job, companies risk losing their clients.
On three separate occasions over the past 10 days, I got off the phone appalled by how the call had been handled. I make it a point to be courteous and friendly when speaking with CSRs (or at least I start out that way) and if I had this many unfortunate experiences, I can only imagine the high numbers of clients across the nation who are being mistreated by call centre employees.
Story #1
I called a company with which I do a lot of business – in fact, my volume has now reached the point where I have been accorded VIP status. Too bad I don’t also get VIP treatment.
The rep who plucked me from the queue had “attitude” from the get go. Instead of asking for my account password, she barked: “Password”. When I replied, “Honey” (the correct answer), the woman with the big southern accent reprimanded me with a “Don’t you ‘honey’ me.” I’m sure that I was not the first person who had to endure this women’s bad mood because when the rep came on the line she was already spoiling for a fight.
Note to marketers:
Make sure that CSRs start their shifts in a positive frame of mind. Do periodic checks and give them enough breaks to help them stay fresh. Things I have used successfully with various call centres:
• Have CSRs and supervisors watch short humorous clips at the start of a shift and during breaks. America’s Funniest Videos and Just for Laugh Gags seem to work well.
• Encourage CSRs to post photos in their cubicle that make them happy. After a trying customer, have reps stand for a moment, shift their visual focus to one of their favourite photos and take a deep breath before taking the next call.
• After a truly annoying customer (I know, most customers can be annoying, but I’m talking about the truly trying ones), have reps read something humorous after their “stand, focus, breathe routine”. I find that 2 or 3 jokes or one of the Reader’s Digest “Life’s Like That” stories can be effective. (Sample stories can be found online at: http://www.readersdigest.ca/laugh_search.html.)
Yes, this means that there will be a 15 – 20 second lag between the calls, but the next calls will go far more smoothly and quickly as a result. (And yes, timed trials we conducted support this assertion.)
Story #2
This time, the rep was unable to resolve my problem and didn’t really understand it anyway. After multiple attempts, I quietly said something along the lines of, “I know from my own work that supervisors often have codes and access to files that other reps don’t. Could you please put me through to a supervisor.”
His answer: “No.”
Thinking he hadn’t understood (his English was not great), I tried it another way. Again, I was told no. No explanation, no apology, just a curt “no”. Then I heard a click followed by a brief silence and then a dial tone. The rep had hung up on me!
I had waited nearly 10 minutes to get to that rep and he had hung up on me!
I dialled again. And waited on hold listening to insipid music. Again. When I finally got through to the company and was able to find someone to whom I could complain, I was told that he had probably hung up on me because the company’s reps had to answer a certain number of calls an hour and I had “probably taken up too much of his time”. I was also informed that CSRs were expected to handle their own calls without having to call upon their supervisors. The implication was that my actions were the reason that the rep had been forced to hang up on me.
Needless to say, we are no longer dealing with that company.
Note to marketers:
• Train your CSRs adequately and do not let them on the lines until they thoroughly understand your product, how it works and how to deal with things that typically go wrong, and how clients should be handled.
• Although you may encourage your reps to resolve customer problems within a certain amount of time, do NOT assign your reps quotas or reward them for getting through calls in shorter and shorter periods of time. Instead, determine how to reward CSRs for how effectively they handle calls and how good a job they do of making clients feel like they have been well-treated.
• Ensure that CSRs know they must never hang up on customers, no matter what.
And now, the tale that promoted this week’s blog post in the first place:
Story #3
Once again, a company insisted it had not made a mistake despite evidence to the contrary.
What happened? The short version: My eldest asked me when her cell phone contract was up. Not realizing that she was thinking of getting her own Blackberry and taking over the payments herself (mom had been footing the bill for the past 10 years or so), my answer was a distracted, “Uh... this August”.
A few days later she came home and proudly showed me her new Blackberry. The twist: My daughter had gone with a new carrier – but had asked to keep her existing phone number. Without speaking with me – the person in whose name the phone was listed and the person who paid the bills – the carrier I had been with for 20 years let the number be ported out. The problem is that there had been 3 phones on a single shared plan.
As soon as I learned what happened I immediately called *** to see if there would be a problem. There was. Someone in “customer retention” (hah!) had taken all three numbers off the plan and had put the two remaining phones on a different, more expensive plan. All without talking to me, the person in whose name had been listed.
At first the rep suggested that my daughter had pretended to be me (which was not the thing to say if trying to ingratiate yourself to a customer). After I explained that was impossible because she had had to show her driver’s licence and another piece of ID in her own name to get her Blackberry, the rep admitted it was their fault... but added there was no way the plan could be reinstated because it no longer existed... even though this had all happened in the previous 90 minutes or so.
After agreeing to move my youngest’s phone to a student plan that was almost (but not quite) as good as the original one, I was told I would have to send them proof of university enrolment and ID. I faxed the papers the following day. 10 days later, I called to make a payment and found that I had been charged over $250: $100 for my eldest daughter cancelling the 1st cell phone 3 days before the contact end date (even though I was told this would be waived because it had only been a few days and because *** had not checked with me) and the rest was “over-minute use” because of the type of phone plan the retention rep had put us on.
When I explained that I had indeed faxed the papers, I got transferred. 7 minutes and 27 seconds later (according to my phone’s timer) I got to explain the whole story again to someone in the hopes of getting the charges reversed. The response, in a supercilious tone: “Well, if you had sent the papers in, then we would have them, wouldn’t we?”
Despite seeing red, and purple and a hazy green colour, I kept my cool and said that I could send a fax confirmation sheet to prove what I was saying. When the rep’s reply suggested that I was making it up, I hung up and tried again.
It took over two hours, but thanks to wonderful rep named Robin – who was the very first person to apologize – it will be resolved at the beginning of next week. (Though I did have to fax the original papers, a new note and the original confirmation notice twice more in the interim.)
Note to marketers:
• Let your CSRs know that it is never, ever, ever, okay to speak in a patronizing tone to customers or to be rude to them.
• Make sure your database can flag customers who repeatedly call in looking for rebates or giving you reasons why bills are not being paid, etc.
Then, when a client calls in, if there are no flags, make sure the CSR takes the customer’s side and tries to help – especially when the client has a long-term relationship with your company.
Even if there is a flag in place, CSRs need to treat the customers with respect (provided the client is not unreasonably rude) and listen objectively to what is being said. When uncertain about how to proceed, CSRs must know to involve their supervisors.
A few other suggestions to help keep the mood right
• Place mirrors next to the reps’ cubicles and encourage them to smile at themselves at the beginning of each call – but not during the call as it tends to distract CSRs.
• Don’t allow your CSRs to work double shifts as their ability to handle calls “nicely” and effectively diminishes the longer they answer calls.
• Provide CSRs with a quiet, phone-free place where they can take their breaks for people who want “silence” and an area where people can watch funny flicks if they prefer.
• Discourage reps from complaining about their callers during their breaks or they will return to their headsets more stressed than before the break. Again, this is supported by blood pressure experiments we conducted in multiple call centres.
• Provide free tea, coffee, pop, water and light snacks in the rest areas. When people return to their stations refreshed, rehydrated and reenergized, their ability to deliver excellent customer service increases significantly.
As mentioned at the outset, the Customer Service Reps who handle your inbound calls are often the only people with whom your customers speak on a regular basis. If these CSRs don’t do a good job, you risk losing customers. On the other hand, if they provide excellent service, you will likely enjoy a corresponding increase in customer loyalty. So... it makes sense pay CSRs well and treat them even better.
If you would like more on info on this topic, please feel free to contact me: jmc@theQgroup.com or 416-424-6644.
Regards, Jane-Michele Clark
Friday, August 13, 2010
New Consumer Expectations re Customer Service Contacts
We all know that good customer service is paramount to growing a business and increasing profitability. What many managers are failing to realize, however, is that rapid changes in technology have lead to equally rapid changes in consumer expectations about what constitutes the delivery of quality customer service.
A survey of 750 people of all ages, from all parts of the country reveals seven areas in which companies should pay heed.
1) Preserve me from auto-attendant hell! Customers are becoming increasingly annoyed and frustrated with having to sift through myriad options, and having to listen to multiple prompt levels, only to find out after 2 or more minutes that the information they are seeking is not on the menu.
Worse is hearing a recording say that the desired service of information is only available through the company’s website.
The worst of all, however, is when the auto-attendant uses voice recognition – but doesn’t ‘recognize’ your voice. Those of you who suffered through the days of “Emily” before she was replaced will empathise with that remark.
It’s understandable that companies want to reduce costs by using auto attendants and, there’s no question that these are valuable tools. Yet, people want to connect with human beings; they don’t want to listen to a long list of prompts – especially not if they are having a problem (and let’s face it, that’s what usually triggers the call in the first place).
Three thoughts expressed by about one-third of respondents:
"If I had access to a computer at the time, I would not have called in the first place.”
“If I had wanted to look it up online, I could have – but I when I choose to pick up the phone, I expect it to be answered.”
“When I have a problem, there is no satisfaction in typing something in an online box and hoping someone will get back to me at some point – and that they will actually answer my question properly.”
To keep customers happy...
• Always make it easy for customers to reach a human being – from the first menu.
• Do not program your system so that customers are returned to the initial menu if they hit “0”. When customers try to zero-out, they should either get placed in a queue to speak with a rep, or told what button to push to reach a live person.
• Give people the option of voice prompt or touch prompt.
• If you do use an auto-attendant, limit the number of menus to two rounds of choices before the customer reaches a human being.
• If you have asked the customer to key in account information, make sure the profile transfers with the call.
• If the call has been answered by a company rep who needs to transfer the call to another department, do not put the customer back into a long queue. Instead, make it possible for your customer service rep to be able to jump to the front of the line. The initial agent should also be taught to stay on the call with the client until the next rep has picked up. Once this happens, the first rep should introduce the caller and give rep #2 a précis of the situation so the customer doesn’t feel like he or she is having to start all over again.
2) Don’t make me wait more than a couple of minutes in a phone queue. Many companies are making clients wait 15 minutes or more in a phone queue. Anything more than 2-3 minutes is considered unacceptable by more than 80% of customers surveyed.
During period of high call volumes...
• Have overload capacity – either by having part-timers who work from home (à la Pizza Pizza way), or by engaging another call centre to work on a contingency basis. By monitoring your call patterns, however, you should be able to determine when it is most necessary to have extra staff on hand.
• Let customers know how long they will have to wait to speak with an agent and, if the wait period exceeds three minutes, include the option of having a customer leave a message to be called back – or of keying in the number where they can be reached.
It is important to let customers know their call will be returned within 15 – 30 minutes max. if you are going to opt for this solution. And make sure that this actually happens.
Customers hate being told their call will be returned within one business day. The following thought was articulated by many survey participants: “I hate being told that they will get back to me in one business day. I don’t know if they will or they won’t. Besides, that is telling me that they will return the call when it’s convenient for them, whether or not it’s convenient for me at that time. How arrogant.”
• Periodically update customers as to how much longer they will need to wait to speak with an agent. This one action can have a dramatic impact on how customers perceive the wait time.
• Give customers the option of holding with or without music. If you do include music, ensure that the selection will appeal to a broad range of clients, or is targeted to your customer demographics. We learned of one company who lost over 2% of its client base within 3 months of installing a new phone system. Investigation revealed the problem to be the heavy metal and rap music that played when customers were hold – customers who were primarily seniors!
3) Give me a toll-free number. With longer and longer wait times becoming commonplace, customers truly object to having to hold when they are paying long distance charges – especially when they are calling to resolve a problem they believe you have created for them.
4) Don’t make me quote chapter and verse about my account to get simple information. In these days of increased white collar crime, it is reasonable, and sensible, for companies to protect their customers by ascertaining that they are dealing with the correct person before discussing an account. However, 3 key questions should be the limit. Beyond that, it takes up too much time (costing the company money) and only frustrates your client.
Better yet, consider implementing a password.
Further, if the call needs to be transferred to another department’s rep, make sure the customer is not required to re-verify his or her identity.
5) Employ phone reps who speak English well with and without a strong accent... and make sure they are properly trained. Nearly 70% of participants expressed some level of dissatisfaction with calls that are handled by call centres in other countries when the person on the other end of the line is difficult to understand, or cannot seem to easily grasp the problem to be solved.
6) Give me more flexibility in how I contact you on any given day.
As communication options increase, so should the options that customers have for contacting your company.
• Offer clients the choice of scheduling appointments by going on-line or using their PDA to access a special appointment site.
• Let customers send a text message or e-mail to request that customer service call them within the hour.
• Enable customers to access their accounts on-line – and give them the ability to change billing and service options while there. Create apps that work with new mobile devices.
Giving customers (who want it) the ability to interact more with their accounts will make them happier – and has the added benefit of saving companies money and employee time.
7) Don’t tell me how I have to deal with you. This is similar to the above point, but the respondents’ distinction is that not only do they want the flexibility on choosing how to communicate with companies, but they want choices in terms of the ongoing relationship.
Right now there are multiple generations of customers – which means multiple ways in which people want to interact with companies. Don’t force everyone into the same mold or you risk alienating at least one of the generational groups.
For instance, it makes no sense to tell someone who is older and computer-phobic that they can only get their bills on-line (and yes, a large percentage of people 60 years and older does not trust on-line “banking” and “account management” in any form)… just as it could cost you a customer if you were to tell a Gen Xer that there is no on-line access to their accounts.
The research underscored one key point: More than ever it’s important to know how your customers want to be treated – and to deal with them their way.
If you would like more info on any of the above suggestions, please feel free to contact me: jmc@theQgroup.com or 416-424-6644.
Regards, Jane-Michele Clark
A survey of 750 people of all ages, from all parts of the country reveals seven areas in which companies should pay heed.
1) Preserve me from auto-attendant hell! Customers are becoming increasingly annoyed and frustrated with having to sift through myriad options, and having to listen to multiple prompt levels, only to find out after 2 or more minutes that the information they are seeking is not on the menu.
Worse is hearing a recording say that the desired service of information is only available through the company’s website.
The worst of all, however, is when the auto-attendant uses voice recognition – but doesn’t ‘recognize’ your voice. Those of you who suffered through the days of “Emily” before she was replaced will empathise with that remark.
It’s understandable that companies want to reduce costs by using auto attendants and, there’s no question that these are valuable tools. Yet, people want to connect with human beings; they don’t want to listen to a long list of prompts – especially not if they are having a problem (and let’s face it, that’s what usually triggers the call in the first place).
Three thoughts expressed by about one-third of respondents:
"If I had access to a computer at the time, I would not have called in the first place.”
“If I had wanted to look it up online, I could have – but I when I choose to pick up the phone, I expect it to be answered.”
“When I have a problem, there is no satisfaction in typing something in an online box and hoping someone will get back to me at some point – and that they will actually answer my question properly.”
To keep customers happy...
• Always make it easy for customers to reach a human being – from the first menu.
• Do not program your system so that customers are returned to the initial menu if they hit “0”. When customers try to zero-out, they should either get placed in a queue to speak with a rep, or told what button to push to reach a live person.
• Give people the option of voice prompt or touch prompt.
• If you do use an auto-attendant, limit the number of menus to two rounds of choices before the customer reaches a human being.
• If you have asked the customer to key in account information, make sure the profile transfers with the call.
• If the call has been answered by a company rep who needs to transfer the call to another department, do not put the customer back into a long queue. Instead, make it possible for your customer service rep to be able to jump to the front of the line. The initial agent should also be taught to stay on the call with the client until the next rep has picked up. Once this happens, the first rep should introduce the caller and give rep #2 a précis of the situation so the customer doesn’t feel like he or she is having to start all over again.
2) Don’t make me wait more than a couple of minutes in a phone queue. Many companies are making clients wait 15 minutes or more in a phone queue. Anything more than 2-3 minutes is considered unacceptable by more than 80% of customers surveyed.
During period of high call volumes...
• Have overload capacity – either by having part-timers who work from home (à la Pizza Pizza way), or by engaging another call centre to work on a contingency basis. By monitoring your call patterns, however, you should be able to determine when it is most necessary to have extra staff on hand.
• Let customers know how long they will have to wait to speak with an agent and, if the wait period exceeds three minutes, include the option of having a customer leave a message to be called back – or of keying in the number where they can be reached.
It is important to let customers know their call will be returned within 15 – 30 minutes max. if you are going to opt for this solution. And make sure that this actually happens.
Customers hate being told their call will be returned within one business day. The following thought was articulated by many survey participants: “I hate being told that they will get back to me in one business day. I don’t know if they will or they won’t. Besides, that is telling me that they will return the call when it’s convenient for them, whether or not it’s convenient for me at that time. How arrogant.”
• Periodically update customers as to how much longer they will need to wait to speak with an agent. This one action can have a dramatic impact on how customers perceive the wait time.
• Give customers the option of holding with or without music. If you do include music, ensure that the selection will appeal to a broad range of clients, or is targeted to your customer demographics. We learned of one company who lost over 2% of its client base within 3 months of installing a new phone system. Investigation revealed the problem to be the heavy metal and rap music that played when customers were hold – customers who were primarily seniors!
3) Give me a toll-free number. With longer and longer wait times becoming commonplace, customers truly object to having to hold when they are paying long distance charges – especially when they are calling to resolve a problem they believe you have created for them.
4) Don’t make me quote chapter and verse about my account to get simple information. In these days of increased white collar crime, it is reasonable, and sensible, for companies to protect their customers by ascertaining that they are dealing with the correct person before discussing an account. However, 3 key questions should be the limit. Beyond that, it takes up too much time (costing the company money) and only frustrates your client.
Better yet, consider implementing a password.
Further, if the call needs to be transferred to another department’s rep, make sure the customer is not required to re-verify his or her identity.
5) Employ phone reps who speak English well with and without a strong accent... and make sure they are properly trained. Nearly 70% of participants expressed some level of dissatisfaction with calls that are handled by call centres in other countries when the person on the other end of the line is difficult to understand, or cannot seem to easily grasp the problem to be solved.
6) Give me more flexibility in how I contact you on any given day.
As communication options increase, so should the options that customers have for contacting your company.
• Offer clients the choice of scheduling appointments by going on-line or using their PDA to access a special appointment site.
• Let customers send a text message or e-mail to request that customer service call them within the hour.
• Enable customers to access their accounts on-line – and give them the ability to change billing and service options while there. Create apps that work with new mobile devices.
Giving customers (who want it) the ability to interact more with their accounts will make them happier – and has the added benefit of saving companies money and employee time.
7) Don’t tell me how I have to deal with you. This is similar to the above point, but the respondents’ distinction is that not only do they want the flexibility on choosing how to communicate with companies, but they want choices in terms of the ongoing relationship.
Right now there are multiple generations of customers – which means multiple ways in which people want to interact with companies. Don’t force everyone into the same mold or you risk alienating at least one of the generational groups.
For instance, it makes no sense to tell someone who is older and computer-phobic that they can only get their bills on-line (and yes, a large percentage of people 60 years and older does not trust on-line “banking” and “account management” in any form)… just as it could cost you a customer if you were to tell a Gen Xer that there is no on-line access to their accounts.
The research underscored one key point: More than ever it’s important to know how your customers want to be treated – and to deal with them their way.
If you would like more info on any of the above suggestions, please feel free to contact me: jmc@theQgroup.com or 416-424-6644.
Regards, Jane-Michele Clark
Tuesday, August 10, 2010
How to Make Yourself Make Cold Calls
Cold calling. For some people, just thinking those words makes their stomach hurt and sweat prickle their sensitive spots. Fear. Fear of cold calling is a powerful thing.
In June 2010 we asked 150 people with various job titles, working for different types of companies, and with different levels of experience, what they hated most about their jobs. 139 of these people put calling strangers, or even clients for whom they had to ask for help or for money, in the top 5 things they hated at work. With sales reps, cold calling made it to the top 3 100% of the time.
When asked why cold calling was so bad, most people cited something related to fear. Fear of failure. Fear of rejection. Fear of looking/ sounding stupid. Fear of failure. Fear of... well the list was long. Really long. And the interesting thing is that most of the reasons or examples people gave to explain their answers were more about what they imagined would or could happen, rather than anything bad that they actually experienced. Or if they had encountered the problem, it was not a usual occurrence.
One way or another fear can wreak more havoc than many other things because it's devious. It's truly sneaky, finding myriad manner of ways to manifest itself.
No matter whether you are fresh out of school and trying to get your first job interview, or are well-established manager, or have been running your own company for years, that little inner voice can be a real problem when it comes to making phone calls. Nearly 90% of people who have to make calls for work say that they often procrastinate and welcome even the smallest reason as an excuse to talk themselves out of making the very calls upon which their livelihoods depend.
During this study, and over the years too, many business executives have told me that their self talk is more destructive than just about anything anyone else can do to them.
If you listen to the chatter of this little voice, it will wear you down faster than chalk being dragged over rough cement. So what can you do when you can't pick up that phone because it suddenly weighs 1,000 pounds?
Here are some suggestions from "regular" people who are succeeding in small and/or spectacular ways (from "What Works For Me", a compilation of useful tips and thoughts that I started writing years ago):
"I get a glass of water to keep things lubricated and I don't let myself have a coffee until I've made at least 10 calls." ~ Fred B., Seattle, WA
"I make a list of 20 calls I need to make the next day just before I go home - along with notes about what I need to say. If I don't have the list, my mind seems to wander to any other task at hand so that I can avoid the calls." ~ Wendy M., BC
"I tape the phone to my wrist until I reach my day's quota!" ~ Unknown
"I don't check my e-mails until I've made the calls. That way I can't procrastinate by finding reasons to avoid getting on the phone." ~ Sharif Z., New York, NY
"I give my assistant $20. If I don't have the calls made by noon (and show her my notes), then she gets to keep the $20. It cost me over $200 before I got into a regular morning call routine." ~ Sylvia B., Chicago, IL
"I stand to make my calls because it gives me more energy. I don't get to sit down at my desk until the calls have been made." ~ Tammy H., CA
"I choose the least important call for the first one of the day. I tell myself that it's okay to blow it because it doesn't really count. Often I ace the call and get the appointment, the momentum just carries me. Even if it doesn't go well, that call has started the ball rolling and I'm okay once I get going." ~ Bill E., London, ON
If none of these ideas help when you're scared (yeah, I know, you have a different word for it), then remember this chant. It's one that Jack Canfield taught me years ago - one that always works to center me and give me a smile before getting on with the task. The only trick is to actually remember to do the chant.
And what is it you might ask? It's...wait for it... and sing it to the traditional Ohm sound. It's "Ohhhh what the heckkkkk, go for it anyway!"
Going for it "anyway" is really important. You need to take that first step, make that first call, because as soon as you start taking action, you will find it easier to keep going. People who force themselves to make calls find that they gain momentum and courage with each number dialed, and each call seems to get progressively easier. So just start and see what happens.
“Yeah, right,” you say. “But how do I get myself to take that first step?”
Tune in next time for Part II. aIn the meantime, we invite you to read for: "Getting better results through cold calling" (http://bit.ly/b5IlYJ) and remember, have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
In June 2010 we asked 150 people with various job titles, working for different types of companies, and with different levels of experience, what they hated most about their jobs. 139 of these people put calling strangers, or even clients for whom they had to ask for help or for money, in the top 5 things they hated at work. With sales reps, cold calling made it to the top 3 100% of the time.
When asked why cold calling was so bad, most people cited something related to fear. Fear of failure. Fear of rejection. Fear of looking/ sounding stupid. Fear of failure. Fear of... well the list was long. Really long. And the interesting thing is that most of the reasons or examples people gave to explain their answers were more about what they imagined would or could happen, rather than anything bad that they actually experienced. Or if they had encountered the problem, it was not a usual occurrence.
One way or another fear can wreak more havoc than many other things because it's devious. It's truly sneaky, finding myriad manner of ways to manifest itself.
No matter whether you are fresh out of school and trying to get your first job interview, or are well-established manager, or have been running your own company for years, that little inner voice can be a real problem when it comes to making phone calls. Nearly 90% of people who have to make calls for work say that they often procrastinate and welcome even the smallest reason as an excuse to talk themselves out of making the very calls upon which their livelihoods depend.
During this study, and over the years too, many business executives have told me that their self talk is more destructive than just about anything anyone else can do to them.
If you listen to the chatter of this little voice, it will wear you down faster than chalk being dragged over rough cement. So what can you do when you can't pick up that phone because it suddenly weighs 1,000 pounds?
Here are some suggestions from "regular" people who are succeeding in small and/or spectacular ways (from "What Works For Me", a compilation of useful tips and thoughts that I started writing years ago):
"I get a glass of water to keep things lubricated and I don't let myself have a coffee until I've made at least 10 calls." ~ Fred B., Seattle, WA
"I make a list of 20 calls I need to make the next day just before I go home - along with notes about what I need to say. If I don't have the list, my mind seems to wander to any other task at hand so that I can avoid the calls." ~ Wendy M., BC
"I tape the phone to my wrist until I reach my day's quota!" ~ Unknown
"I don't check my e-mails until I've made the calls. That way I can't procrastinate by finding reasons to avoid getting on the phone." ~ Sharif Z., New York, NY
"I give my assistant $20. If I don't have the calls made by noon (and show her my notes), then she gets to keep the $20. It cost me over $200 before I got into a regular morning call routine." ~ Sylvia B., Chicago, IL
"I stand to make my calls because it gives me more energy. I don't get to sit down at my desk until the calls have been made." ~ Tammy H., CA
"I choose the least important call for the first one of the day. I tell myself that it's okay to blow it because it doesn't really count. Often I ace the call and get the appointment, the momentum just carries me. Even if it doesn't go well, that call has started the ball rolling and I'm okay once I get going." ~ Bill E., London, ON
If none of these ideas help when you're scared (yeah, I know, you have a different word for it), then remember this chant. It's one that Jack Canfield taught me years ago - one that always works to center me and give me a smile before getting on with the task. The only trick is to actually remember to do the chant.
And what is it you might ask? It's...wait for it... and sing it to the traditional Ohm sound. It's "Ohhhh what the heckkkkk, go for it anyway!"
Going for it "anyway" is really important. You need to take that first step, make that first call, because as soon as you start taking action, you will find it easier to keep going. People who force themselves to make calls find that they gain momentum and courage with each number dialed, and each call seems to get progressively easier. So just start and see what happens.
“Yeah, right,” you say. “But how do I get myself to take that first step?”
Tune in next time for Part II. aIn the meantime, we invite you to read for: "Getting better results through cold calling" (http://bit.ly/b5IlYJ) and remember, have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
Tuesday, August 3, 2010
The Role of Loyalty Programs Today
Earlier today I promised to write a little more on the role of loyalty programs today. This is not an exhaustive take on the matter, but should give you a little insight into the way things are moving.
It is commonly accepted that well-conceived and executed, formal customer loyalty programs can increase retention rates as well as revenue and profitability per customer. Despite the expectation that over $2 billion will be spent worldwide on customer loyalty programs in 2010, however, less than 15% of companies today are leveraging their customer loyalty programs to advantage.
In part this is because fewer and fewer programs are being well-managed, and in part because the way rewards-based loyalty programs are being perceived by customers is changing.
Although having a loyalty program is as de rigueur as having a website these days, customers are increasingly indicating that these programs do not necessarily make them loyal customers because so many companies with similar offerings have programs with similar rewards.
For this reason, my advice to companies today is this: Only join, or introduce, a formal rewards-based customer loyalty program if....
• Your primary reason for introducing the loyalty program is to capture data... and you ensure that your systems are designed to allow for easy analysis of the data, and that marketing initiatives are deployed accordingly; and
• You want to use the information to better understand your customers’ behaviour patterns and preferences in order to improve the product offering, customize service and create a more meaningful relationship with the customer, and
• You are prepared to invest sufficiently in the program to provide meaningful benefits to your customers – benefits that will actually enable you to shape customer behaviour; and
• You understand the benefits of customizing services and/or packages and/or communication to the specific needs of individual customer cluster groups; and
• You are willing to offer special benefits to your best customers – and think that it is okay to treat your top clients like VIPs (yes, excellent service to all, but kingly treatment for the top tier).
That’s a lot of ands – but you need to take this to heart if you want a loyalty program that reaps rewards for you.
Why? Two reasons.
1) Rewards alone don’t create loyal customers.
2) Customers expect that, in exchange for allowing marketers to track their purchases and other consumer behaviours that they will be rewarded with more personalized, customized service.
Point #1: Rewards
Despite nearly 70% of participants saying they are satisfied with the loyalty programs in which they participate, less than 25% say that the programs make them loyal to the company running the program.
In nearly 70% of cases, people have come to view these programs simply as a way to get a little extra perk when they patronize retailers and service providers they like for other reasons. They participate in all the programs offered by the types of retailers they frequent so as not to miss out.
The following comments from a few of the research respondents are representative of the broader picture:
About gasoline: “I play in the Esso, Shell and Petro-Canada games. That way, I can go to whatever gas station I find on the right hand side of the road when my gas light goes on. I don’t really care whose gas I buy because it’s all the same to me and it’s all the same price, too.”
What business travellers said about hotels: “When I book a hotel, I choose one that, in order of priority, is a) close to the conference or meeting, b) within my corporate allowance, c) known for being clean, safe and accommodating and d) has a points program. If the first things aren’t in place, it won’t matter what kind of rewards program the place offers; I simply won’t stay there.”
About grocery retailers: “If the program is free, I sign up. If not, I don’t. I always show my card when I’m in the store, but I don’t decide where I’m going to shop because of the card. If there are great specials or points on certain items, I may buy them, even if I hadn’t plan to when I entered the store, but as I said, things other than the loyalty card make me decide where I’m going to do my groceries.”
Given a choice between frequenting a retailer or service provider that was conveniently located but had no loyalty program – and one with a loyalty program that was not conveniently located, 90% chose convenience over loyalty program, as long as the companies’ reputation were similar and the price gap not too large.
Interesting observation: As a result of the glut of loyalty programs in the market, collectors are becoming loyal to the reward and points play, rather than to the company.
The only way to change this is to either have a loyalty program that is superior to anything else – and this includes almost unprecedented levels of customized service and communication
In terms of the rewards themselves, they need to be attainable. In many instances, respondents indicate that the rewards are becoming harder and harder to earn and that this is making the rewards program less of a motivating factor. This is supported by a recent CMO Study which finds that 38% of participants overall say there are too many conditions and restrictions on the programs and that 37% of people feel the rewards lack any real value.
Point #2: Recognition
For the top tier clients, the one who represent the highest revenue contribution per person – and are also usually the most profitable, too – recognition is more important than reward. Indeed, the most active participants in a program expect that the company reps should be able to recognize their value to the company and they should be given special treatment as a result. Fewer than 10% of companies surveyed, however, say they have special tools in place to a) recognize the best customers and b) provide them with special treatment in any case.
Many airlines and hotels are notable exceptions to this – and room and seat upgrades and other special treatment can cement relationships with the best clients. Said one senior exec: “I travel a lot and my airline knows me. When my meeting is done early, I just head to the airport. Even if I have a later reservation, I know they’ll get me on the next flight, even if they have to bump another passenger. I don’t care about free trips; I do care about getting home sooner.”
What Does All This Mean in Terms of The Role of Loyalty Programs Today?
In an age where is an increasing gap between customer satisfaction and loyalty, it is clear that true loyalty comes from having customers who feel like they are valued. It’s equally clear that the purpose of a customer loyalty program is to give marketers the insights that will help them treat special clients like VIPs. This will, in turn, lead to higher retention levels, large revenues per transaction, more referrals and better profitability overall.
If we look at the evolution of loyalty programs, we’ll see that this is not a new concept. For more on this, please read: The evolution of loyalty programs: http://bit.ly/cBW6dc
If you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
It is commonly accepted that well-conceived and executed, formal customer loyalty programs can increase retention rates as well as revenue and profitability per customer. Despite the expectation that over $2 billion will be spent worldwide on customer loyalty programs in 2010, however, less than 15% of companies today are leveraging their customer loyalty programs to advantage.
In part this is because fewer and fewer programs are being well-managed, and in part because the way rewards-based loyalty programs are being perceived by customers is changing.
Although having a loyalty program is as de rigueur as having a website these days, customers are increasingly indicating that these programs do not necessarily make them loyal customers because so many companies with similar offerings have programs with similar rewards.
For this reason, my advice to companies today is this: Only join, or introduce, a formal rewards-based customer loyalty program if....
• Your primary reason for introducing the loyalty program is to capture data... and you ensure that your systems are designed to allow for easy analysis of the data, and that marketing initiatives are deployed accordingly; and
• You want to use the information to better understand your customers’ behaviour patterns and preferences in order to improve the product offering, customize service and create a more meaningful relationship with the customer, and
• You are prepared to invest sufficiently in the program to provide meaningful benefits to your customers – benefits that will actually enable you to shape customer behaviour; and
• You understand the benefits of customizing services and/or packages and/or communication to the specific needs of individual customer cluster groups; and
• You are willing to offer special benefits to your best customers – and think that it is okay to treat your top clients like VIPs (yes, excellent service to all, but kingly treatment for the top tier).
That’s a lot of ands – but you need to take this to heart if you want a loyalty program that reaps rewards for you.
Why? Two reasons.
1) Rewards alone don’t create loyal customers.
2) Customers expect that, in exchange for allowing marketers to track their purchases and other consumer behaviours that they will be rewarded with more personalized, customized service.
Point #1: Rewards
Despite nearly 70% of participants saying they are satisfied with the loyalty programs in which they participate, less than 25% say that the programs make them loyal to the company running the program.
In nearly 70% of cases, people have come to view these programs simply as a way to get a little extra perk when they patronize retailers and service providers they like for other reasons. They participate in all the programs offered by the types of retailers they frequent so as not to miss out.
The following comments from a few of the research respondents are representative of the broader picture:
About gasoline: “I play in the Esso, Shell and Petro-Canada games. That way, I can go to whatever gas station I find on the right hand side of the road when my gas light goes on. I don’t really care whose gas I buy because it’s all the same to me and it’s all the same price, too.”
What business travellers said about hotels: “When I book a hotel, I choose one that, in order of priority, is a) close to the conference or meeting, b) within my corporate allowance, c) known for being clean, safe and accommodating and d) has a points program. If the first things aren’t in place, it won’t matter what kind of rewards program the place offers; I simply won’t stay there.”
About grocery retailers: “If the program is free, I sign up. If not, I don’t. I always show my card when I’m in the store, but I don’t decide where I’m going to shop because of the card. If there are great specials or points on certain items, I may buy them, even if I hadn’t plan to when I entered the store, but as I said, things other than the loyalty card make me decide where I’m going to do my groceries.”
Given a choice between frequenting a retailer or service provider that was conveniently located but had no loyalty program – and one with a loyalty program that was not conveniently located, 90% chose convenience over loyalty program, as long as the companies’ reputation were similar and the price gap not too large.
Interesting observation: As a result of the glut of loyalty programs in the market, collectors are becoming loyal to the reward and points play, rather than to the company.
The only way to change this is to either have a loyalty program that is superior to anything else – and this includes almost unprecedented levels of customized service and communication
In terms of the rewards themselves, they need to be attainable. In many instances, respondents indicate that the rewards are becoming harder and harder to earn and that this is making the rewards program less of a motivating factor. This is supported by a recent CMO Study which finds that 38% of participants overall say there are too many conditions and restrictions on the programs and that 37% of people feel the rewards lack any real value.
Point #2: Recognition
For the top tier clients, the one who represent the highest revenue contribution per person – and are also usually the most profitable, too – recognition is more important than reward. Indeed, the most active participants in a program expect that the company reps should be able to recognize their value to the company and they should be given special treatment as a result. Fewer than 10% of companies surveyed, however, say they have special tools in place to a) recognize the best customers and b) provide them with special treatment in any case.
Many airlines and hotels are notable exceptions to this – and room and seat upgrades and other special treatment can cement relationships with the best clients. Said one senior exec: “I travel a lot and my airline knows me. When my meeting is done early, I just head to the airport. Even if I have a later reservation, I know they’ll get me on the next flight, even if they have to bump another passenger. I don’t care about free trips; I do care about getting home sooner.”
What Does All This Mean in Terms of The Role of Loyalty Programs Today?
In an age where is an increasing gap between customer satisfaction and loyalty, it is clear that true loyalty comes from having customers who feel like they are valued. It’s equally clear that the purpose of a customer loyalty program is to give marketers the insights that will help them treat special clients like VIPs. This will, in turn, lead to higher retention levels, large revenues per transaction, more referrals and better profitability overall.
If we look at the evolution of loyalty programs, we’ll see that this is not a new concept. For more on this, please read: The evolution of loyalty programs: http://bit.ly/cBW6dc
If you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
The Evolution of Loyalty Programs
By taking a partial look at the evolution of customer loyalty programs, it is easy to see why so many rewards-based programs are not delivering what the customer really wants.
According to the Turkish tour guide who showed us around the ruins, the first documented “loyalty” program was recorded in Ephesus (ancient Turkey) in the 2nd Century AD. Rival oil merchants apparently would offer customers a free amphora refill every 5th time and would give customers special stones to mark each of the first 4 purchases.
Apocryphal? Who really knows? What is clear, however, is that merchants have been finding ways to encourage customer loyalty for centuries through use of discounts, “buy one get one free”, punch cards and various other types of offers.
In the 1970s, the first of the airline frequent flier programs made its debut. At the time it was a powerful way to get people to choose one airline over another. As more airlines jumped on the loyalty bandwagon, and more people started accumulating frequent flier miles in different programs, however, lines were drawn. If someone were racking up miles in one program, flying on another airline meant making a negative decision against himself (or herself).
The natural human response: Join the other loyalty programs.
Seeing the sign-ups and changing reservation patterns, car rental companies, hotels and others in the travel business entered the fray. As did large retailers such as Zellers, sub stores, coffee chains, grocery stores, video rental outlets... you name it and today it probably has some kind of loyalty program. You’ll also find online programs such as Mypoints, Ebates and other that reward loyal shoppers. There are even non-profit online services such as SchoolPop and iGive.com that have been created with built-in have loyalty building mechanisms.
The result is that today, over 80% of North Americans participate in at least one loyalty program*. One third belongs to two or more – and a whopping 10% of North Americans now participates in more than 20 loyalty programs.
According to COLLOQUY, the average for the US: 14.1 programs. For Canadians the average is 17.5. Not surprising given the proliferation of such programs. In Europe the numbers are lower, but on the rise there, too, nevertheless. According to both Forrester Research and META Group, people’s propensity to join such programs is not expected to diminish in the near future, despite the diminishing of perceived value to the average consumer.
Why is that? In our parents’ and grandparents’ day, the “loyalty program” was actually the service provided by the corner store grocer. He built relationships with his loyal customers and they came to count on him. When Mrs. Smith’s had family coming in from the east coast, he made sure to order her dad’s favourite lamb roast. When the White’s daughter was getting married, he ordered in special ink to use on the invitation envelopes. When Mr. Green was injured at work, the grocer brought the 50 lb. bag right to the house because he knew the Greens’ sons were only 2 and 3 years old. As for the beef bones, they were always saved for the Coxwell’s collies.
Customers were loyal to the establishments where they were recognized and treated as though they were special.
For a while, we in North America moved away from expecting this kind of special personalized, customized service, but the pendulum is swinging back.
Today, with consumers understanding that companies can track individual orders and keep track of who spends what with a company, there is a returning desire to receive the old-fashioned corner store recognition.
The advent of social media tools is increasing this expectation, so marketers need to re-examine how they will use their loyalty programs for these programs to remain effective.
Today, a formal rewards-based customer loyalty program must...
• Capture customer demographic, transactional and preference data. Systems must be designed to allow for easy analysis of the data, and marketing initiatives need to be deployed accordingly;
• Make use of the information to better understand customers’ behaviour patterns and preferences in order to improve the product offering, customize service and create more meaningful relationships with customers;
• Receive adequate financial and personnel support to provide customers with relevant benefits – benefits that will actually help to influence customer behaviour;
• Include customized services and/or packages and/or communication that respond to the specific needs of individual customer cluster groups; and
• Offer special benefits to the best customers.
It’s funny, but as we have become more technologically sophisticated, we are seeing a return to older time customer service values... and the marketers who recognize this, and put in place the systems to provide this level of service to the best customers, will be able to capitalize on what is transpiring in the market.
Well, I guess that's it for now. My next post will start to outline some of the things you can do to get more bang from your customer loyalty program buck.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
*This figure is hard to quantify, but Jupiter Research puts the figure at +75%, The Q Group Research says 85% and other studies show figures anywhere from 80% - 90%. Differences in regional and demographic skews account for the differences in stats, but most marketers agree that +80% is a reasonable figure.
According to the Turkish tour guide who showed us around the ruins, the first documented “loyalty” program was recorded in Ephesus (ancient Turkey) in the 2nd Century AD. Rival oil merchants apparently would offer customers a free amphora refill every 5th time and would give customers special stones to mark each of the first 4 purchases.
Apocryphal? Who really knows? What is clear, however, is that merchants have been finding ways to encourage customer loyalty for centuries through use of discounts, “buy one get one free”, punch cards and various other types of offers.
In the 1970s, the first of the airline frequent flier programs made its debut. At the time it was a powerful way to get people to choose one airline over another. As more airlines jumped on the loyalty bandwagon, and more people started accumulating frequent flier miles in different programs, however, lines were drawn. If someone were racking up miles in one program, flying on another airline meant making a negative decision against himself (or herself).
The natural human response: Join the other loyalty programs.
Seeing the sign-ups and changing reservation patterns, car rental companies, hotels and others in the travel business entered the fray. As did large retailers such as Zellers, sub stores, coffee chains, grocery stores, video rental outlets... you name it and today it probably has some kind of loyalty program. You’ll also find online programs such as Mypoints, Ebates and other that reward loyal shoppers. There are even non-profit online services such as SchoolPop and iGive.com that have been created with built-in have loyalty building mechanisms.
The result is that today, over 80% of North Americans participate in at least one loyalty program*. One third belongs to two or more – and a whopping 10% of North Americans now participates in more than 20 loyalty programs.
According to COLLOQUY, the average for the US: 14.1 programs. For Canadians the average is 17.5. Not surprising given the proliferation of such programs. In Europe the numbers are lower, but on the rise there, too, nevertheless. According to both Forrester Research and META Group, people’s propensity to join such programs is not expected to diminish in the near future, despite the diminishing of perceived value to the average consumer.
Why is that? In our parents’ and grandparents’ day, the “loyalty program” was actually the service provided by the corner store grocer. He built relationships with his loyal customers and they came to count on him. When Mrs. Smith’s had family coming in from the east coast, he made sure to order her dad’s favourite lamb roast. When the White’s daughter was getting married, he ordered in special ink to use on the invitation envelopes. When Mr. Green was injured at work, the grocer brought the 50 lb. bag right to the house because he knew the Greens’ sons were only 2 and 3 years old. As for the beef bones, they were always saved for the Coxwell’s collies.
Customers were loyal to the establishments where they were recognized and treated as though they were special.
For a while, we in North America moved away from expecting this kind of special personalized, customized service, but the pendulum is swinging back.
Today, with consumers understanding that companies can track individual orders and keep track of who spends what with a company, there is a returning desire to receive the old-fashioned corner store recognition.
The advent of social media tools is increasing this expectation, so marketers need to re-examine how they will use their loyalty programs for these programs to remain effective.
Today, a formal rewards-based customer loyalty program must...
• Capture customer demographic, transactional and preference data. Systems must be designed to allow for easy analysis of the data, and marketing initiatives need to be deployed accordingly;
• Make use of the information to better understand customers’ behaviour patterns and preferences in order to improve the product offering, customize service and create more meaningful relationships with customers;
• Receive adequate financial and personnel support to provide customers with relevant benefits – benefits that will actually help to influence customer behaviour;
• Include customized services and/or packages and/or communication that respond to the specific needs of individual customer cluster groups; and
• Offer special benefits to the best customers.
It’s funny, but as we have become more technologically sophisticated, we are seeing a return to older time customer service values... and the marketers who recognize this, and put in place the systems to provide this level of service to the best customers, will be able to capitalize on what is transpiring in the market.
Well, I guess that's it for now. My next post will start to outline some of the things you can do to get more bang from your customer loyalty program buck.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
*This figure is hard to quantify, but Jupiter Research puts the figure at +75%, The Q Group Research says 85% and other studies show figures anywhere from 80% - 90%. Differences in regional and demographic skews account for the differences in stats, but most marketers agree that +80% is a reasonable figure.
Thursday, July 29, 2010
8 Steps for Handling Corporate Crises
No matter how many preventative measures are taken, things go wrong in every company at some point. How your company responds in a crisis has a direct bearing on how quickly it will recover consumer confidence and sales.
A couple of posts back I listed the steps to follow when the yoghurt hits the fan. Here is a little more about each of the steps.
1) Investigate immediately
Hopefully you will have cultivated an environment in which employees at all levels are motivated to alert supervisors to problems as soon as they arise.
As soon as the whistle blows, assess the magnitude and specific nature of the problem. Try to determine why the problem has occurred/is occurring, and who is/what departments are responsible so that you can determine the most appropriate remedial action. You need to think “stop the problem, contain the damage and start making things right”. This is not the time to assess blame or point fingers in any way shape or form.
If the problem is a serious one, or has the potential to have a significant impact on the company, ensure that senior execs are alerted immediately. They need to be involved in “next steps”.
2) Activate your response plan according to what has happened (if you don’t have one, read the previous post)
If you did a good job of anticipating what could go wrong, your current problem is likely listed in the Problem Resolution Binder, along with a recommended course of action. Follow the plan… but be flexible enough to make adjustments based on the actual set of circumstances.
There should be contact numbers for key decision makers and department heads in the book. Even when the course to follow is well laid out, make sure seasoned, senior employees are involved in the implementation of "next steps" to ensure that they are indeed the correct ones for the specific problem at hand.
Although you need to respond immediately, do not confuse responding with reacting. Take the time to assess the ramifications of your solution steps before proceeding – those extra minutes of reflection, or extra calculations and discussions, can make the difference between an effective resolution and an escalation of the problem.
3) Be – and be seen to be – sympathetic and pro-active
Nothing annoys customers and average consumers more than corporate executives who appear indifferent to a problem and how it is affecting customers, employees and other stakeholders.
According to research we conducted from March - June 2010, 55% of the general adult population in North America appears to be angered by executives who treat a crisis simply as a problem to be solved, without being cognizant of, or sympathetic to, the personal toll exacted by whatever has transpired. For customers, the figure rises to 87%. The figures were consistent for all types of problems ranging from corporate missteps to more serious problems that resulted in loss of life, across all types of industries.
Of more significance to the bottom line, nearly 40% of people said they would be less likely, or far less likely, to do business in future with companies whose executives appear indifferent to employees and public opinion, especially in times of crisis.
Even though they understand that things go wrong at some point in every company, respondents explained that the way a company responds in times of trouble is a reflection of its ethics and customer service values. As one business buyer put it, “If they can’t be compassionate and caring in times of trouble, I can only imagine how my business is valued and how my people would be treated during the good time. I suspect it would not be with respect.”
Maple Leaf Foods retained its credibility along with the confidence and goodwill of the Canadian consumer when it faced the listeria outbreak in 2008 because it pro actively let people know what was going on and publicly expressed concern for the families involved and its own employees, too.
From long before the time of the Tylenol package tampering though to the BP oil well disaster, there are clear examples that show a correlation between how compassionate and concerned executives appear in the face of a crisis and how future sales have fared.
The message: Be – and be seen to be – sympathetic to the challenges faced by the people affected by the problem at hand.
4) Get the press and social media on your side
Have your media rep let the press know what has happened as soon as possible – and keep them informed about the steps you are taking to resolve matters.
Do not try to cover anything up. Tell them “the good, the bad and the ugly”. The more transparent you are, the more credible you will appear – and the less likely you are to be crucified in the press.
Make sure you keep your employees up to speed on what is happening, too. This is a good time to make use of internal newsletters, discussion boards and other communication forums. If your company employs union members, you will need to keep their reps up-to-date, too.
Don’t forget about social networking sites either. If you don’t already have a social media manager, now would be a good time to bring one in on contract to work with your PR people to monitor and shape the cyber-chat.
Make sure you add a section to your company’s homepage that lets people click though to learn more about the problem and what you are doing to solve it. The addition of video messages from the CEO can be helpful in some cases – and puts a personal face on the solution, which is important for many consumer segments.
5) Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
Don’t think there’s much that needs to be said here, except “Be sincere.”
6) Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
According to consumer research expert J. Armstrong, “30% - 55% of North Americans aged 18 – 65 would be less likely to do business with a company in the future if the company’s first response to a problem is denial of culpability.”
Even if the problem is not one your company caused, your response should be something along the lines of, “We are truly sorry that this has occurred and we are doing everything we can to determine exactly what happened and how to make it right.”
With this kind of a response, you appear responsive and caring, yet have neither accepted nor denied responsibility for what transpired. In essence, you have bought your company the time it needs to investigate.
When it turns out that the problem was created by another entity, let the press report this. Disseminate reports from the police, trade associations, government agencies or whoever is appropriate for the situation ,using social media and traditional PR channels.
Add the information to the front page of your website in the same spot where you have been keeping consumers informed about the problem resolution progress.
7) Go the extra yard to make things right… be perceived to be doing the “right thing”
Avoid getting into long, drawn-out lawsuits. Settle up fairly and quickly – and do whatever it takes to make it right. In the long run it will cost you less money, use less time and will help your reputation from being tarnished.
8) Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
Maple Leaf used the knowledge it gained during its eradication of listeria from its plants to improve food handling safety procedures and now willingly shares this intelligence with others in similar industries.
Johnson & Johnson used the Tylenol tamperings as the catalyst for the introduction of tamperproof packaging.
Hotels regularly use “service incidents” as teaching tools and opportunities to put new processes in place – some of which are shared between properties and chains.
As important as it is for the next steps in problem resolution to be future avoidance of similar situations, it is even more important that you not use this to pat yourself on the back. The likelihood of public backlash is huge because most consumers will believe that the processes should already have been in place to have prevented the problem from occurring in the first place.
I hope you found this information useful, but more so, I hope you never have to put any of these suggestions into play.
If you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
A couple of posts back I listed the steps to follow when the yoghurt hits the fan. Here is a little more about each of the steps.
1) Investigate immediately
Hopefully you will have cultivated an environment in which employees at all levels are motivated to alert supervisors to problems as soon as they arise.
As soon as the whistle blows, assess the magnitude and specific nature of the problem. Try to determine why the problem has occurred/is occurring, and who is/what departments are responsible so that you can determine the most appropriate remedial action. You need to think “stop the problem, contain the damage and start making things right”. This is not the time to assess blame or point fingers in any way shape or form.
If the problem is a serious one, or has the potential to have a significant impact on the company, ensure that senior execs are alerted immediately. They need to be involved in “next steps”.
2) Activate your response plan according to what has happened (if you don’t have one, read the previous post)
If you did a good job of anticipating what could go wrong, your current problem is likely listed in the Problem Resolution Binder, along with a recommended course of action. Follow the plan… but be flexible enough to make adjustments based on the actual set of circumstances.
There should be contact numbers for key decision makers and department heads in the book. Even when the course to follow is well laid out, make sure seasoned, senior employees are involved in the implementation of "next steps" to ensure that they are indeed the correct ones for the specific problem at hand.
Although you need to respond immediately, do not confuse responding with reacting. Take the time to assess the ramifications of your solution steps before proceeding – those extra minutes of reflection, or extra calculations and discussions, can make the difference between an effective resolution and an escalation of the problem.
3) Be – and be seen to be – sympathetic and pro-active
Nothing annoys customers and average consumers more than corporate executives who appear indifferent to a problem and how it is affecting customers, employees and other stakeholders.
According to research we conducted from March - June 2010, 55% of the general adult population in North America appears to be angered by executives who treat a crisis simply as a problem to be solved, without being cognizant of, or sympathetic to, the personal toll exacted by whatever has transpired. For customers, the figure rises to 87%. The figures were consistent for all types of problems ranging from corporate missteps to more serious problems that resulted in loss of life, across all types of industries.
Of more significance to the bottom line, nearly 40% of people said they would be less likely, or far less likely, to do business in future with companies whose executives appear indifferent to employees and public opinion, especially in times of crisis.
Even though they understand that things go wrong at some point in every company, respondents explained that the way a company responds in times of trouble is a reflection of its ethics and customer service values. As one business buyer put it, “If they can’t be compassionate and caring in times of trouble, I can only imagine how my business is valued and how my people would be treated during the good time. I suspect it would not be with respect.”
Maple Leaf Foods retained its credibility along with the confidence and goodwill of the Canadian consumer when it faced the listeria outbreak in 2008 because it pro actively let people know what was going on and publicly expressed concern for the families involved and its own employees, too.
From long before the time of the Tylenol package tampering though to the BP oil well disaster, there are clear examples that show a correlation between how compassionate and concerned executives appear in the face of a crisis and how future sales have fared.
The message: Be – and be seen to be – sympathetic to the challenges faced by the people affected by the problem at hand.
4) Get the press and social media on your side
Have your media rep let the press know what has happened as soon as possible – and keep them informed about the steps you are taking to resolve matters.
Do not try to cover anything up. Tell them “the good, the bad and the ugly”. The more transparent you are, the more credible you will appear – and the less likely you are to be crucified in the press.
Make sure you keep your employees up to speed on what is happening, too. This is a good time to make use of internal newsletters, discussion boards and other communication forums. If your company employs union members, you will need to keep their reps up-to-date, too.
Don’t forget about social networking sites either. If you don’t already have a social media manager, now would be a good time to bring one in on contract to work with your PR people to monitor and shape the cyber-chat.
Make sure you add a section to your company’s homepage that lets people click though to learn more about the problem and what you are doing to solve it. The addition of video messages from the CEO can be helpful in some cases – and puts a personal face on the solution, which is important for many consumer segments.
5) Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
Don’t think there’s much that needs to be said here, except “Be sincere.”
6) Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
According to consumer research expert J. Armstrong, “30% - 55% of North Americans aged 18 – 65 would be less likely to do business with a company in the future if the company’s first response to a problem is denial of culpability.”
Even if the problem is not one your company caused, your response should be something along the lines of, “We are truly sorry that this has occurred and we are doing everything we can to determine exactly what happened and how to make it right.”
With this kind of a response, you appear responsive and caring, yet have neither accepted nor denied responsibility for what transpired. In essence, you have bought your company the time it needs to investigate.
When it turns out that the problem was created by another entity, let the press report this. Disseminate reports from the police, trade associations, government agencies or whoever is appropriate for the situation ,using social media and traditional PR channels.
Add the information to the front page of your website in the same spot where you have been keeping consumers informed about the problem resolution progress.
7) Go the extra yard to make things right… be perceived to be doing the “right thing”
Avoid getting into long, drawn-out lawsuits. Settle up fairly and quickly – and do whatever it takes to make it right. In the long run it will cost you less money, use less time and will help your reputation from being tarnished.
8) Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
Maple Leaf used the knowledge it gained during its eradication of listeria from its plants to improve food handling safety procedures and now willingly shares this intelligence with others in similar industries.
Johnson & Johnson used the Tylenol tamperings as the catalyst for the introduction of tamperproof packaging.
Hotels regularly use “service incidents” as teaching tools and opportunities to put new processes in place – some of which are shared between properties and chains.
As important as it is for the next steps in problem resolution to be future avoidance of similar situations, it is even more important that you not use this to pat yourself on the back. The likelihood of public backlash is huge because most consumers will believe that the processes should already have been in place to have prevented the problem from occurring in the first place.
I hope you found this information useful, but more so, I hope you never have to put any of these suggestions into play.
If you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until next time, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michèle Clark
Thursday, July 22, 2010
4 Simple Steps for Preventing Problems – Planning for the “Unexpected”
Hi. I promised last time that I would fill in some of the details on the process to follow when the yoghurt hits the fan. I will do that the next, but realized that it makes more sense to first talk about you should be doing long before things go off the rails.
1) Ensure that your company has processes in place for all regularly-performed jobs…
and that people are trained in the right way to do things. There must also be checks and balances in place to ensure that the correct process is followed... and there need to be consequences for not following the established routines or employees tend to get lazy and develop their own short cuts.
This may sound obvious, but it’s surprising just how many companies fall short in this area.
Most manufacturing and processing companies, especially those dealing with food and hazardous material, are pretty vigilant, but other types of companies are often too lax. Or think that there is no real need.
Even in a marketing communications company we need to have processes. For instance…
• A contact report must be written for every client contact made. That way nothing gets forgotten, agency and client are clear about any changes in direction given, etc.
• Recruiting specs for any type of research must be vetted against the research objectives and by the people who will be using the research findings – and signed off on by the client. You also need to double-check the profiles of the people recruited prior to starting the work to make sure that your specs were followed accurately.
• You never go to press without getting client sign-off on a “size as” printer’s proof.
• You must always include seed names in your mail files of people living in the target area – and these names must be given to the data processing firm for insertion, not to the lettershop company.
• etc.
Seemingly little things, but I’ve learned that things only go wrong “the one time” we don’t follow a set procedure.
We conducted research with +100 other firms in multiple industries to confirm what we suspected – that no company can operate without established ways of doing things. We spoke with all kinds of companies from bakeries to hairdressing salons to automotive repair shops to data processing firms to research labs to architect firms to convenience stores to... well, let’s just say there was a good cross-section of companies.
Before the investigation we asked a panel of business students which of the targetted firms needed to have processes (other than financial) in place to success. They believed that less than half of the firms needed to be process-driven. They were wrong.
Here’s what we found. Companies fell into one of two categories: 1) Process-oriented companies that function relatively smoothly and 2) Ones that fly by the seat of their pants and spend as much time putting out fires as they do performing revenue generating tasks.
The ones with processes in place
Each and every company that fell into this category – without exception – echoed the sentiment expressed by this one entrepreneur from a consulting firm:
“We have rules for how things should be done. Whenever we take a shortcut and skip a step, that laziness usually comes back to bite us in the butt.”
A caterer said: “Whenever we deviate from our established processes, it’s only dumb luck that keeps the wheel from coming off the bus.”
In many cases, the establishing of set procedures followed a series of small setbacks – or was implemented after a really major screw-up that threatened the very survival of the business.
Interestingly, each of these firms was profitable – and reported increases in both revenue and profitability of anywhere from 10% to 30% in the first year in which process were introduced and actually followed.
The ones without set procedures
Each of the companies that operated without established practices for everyday tasks had the following in common:
• They spent anywhere from 25% – 50% of their work week solving problems - most of which were a result of employee error.
• Their profitability was lower than the average for similar-sized firms in their industry – sometimes as much as 60% lower.
• The business did not have a written business plan and was growing like an unpruned bush – out in every direction but up.
2) Create contingency plans
Gather people from all areas of the company. Ask them to think about all the things that could possibly go wrong in their work day. Encourage employees to submit ideas for solving the identified problems as well as for improving safety and productivity in their work area.
From this input, create a written game plan of the process to follow when the yoghurt starts dripping on the proverbial fan.
Make sure that there are at least two copies of this binder – and if the operation is a large one, that there are a couple of copies in each key functional area of the company. Employees should all know about the binder and be taught that when things go wrong they need to...
• Call 911 (in cases of physical injury, fire, etc.)
• Alert their supervisor
• Get the binder and follow the recommended steps as appropriate
3) Cultivate a Culture of Trust and Open Communication
This is just good business practice – but can prove invaluable in times of company crisis.
If there is already good dialogue between senior executives and the rank and file, it makes it easier to communicate with employees if there is a serious problem.
When Maple Leaf Foods experienced its listeria outbreak, CEO and President Michael H. McCain was able to inform his employees about the steps being taken through an internal communication tool. Prior to the incident he updated employees weekly through a personal e-mail message. Employees had come to know and trust him and, as a result, were reassured by the postings during the crisis.
More importantly, in this kind of environment employees will be quick to alert colleague and/or supervisors to potential problems, rather than covering things up because of fear of reprisal.
4) Court the Press
Companies that maintain cordial relations with members of the press are more apt to be portrayed in a more sympathetic light when things go wrong – provided they do the right things to address the problem, of course.
And as for the details on the process to follow (see below), I really will fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is."
Jane-Michele Clark
1) Ensure that your company has processes in place for all regularly-performed jobs…
and that people are trained in the right way to do things. There must also be checks and balances in place to ensure that the correct process is followed... and there need to be consequences for not following the established routines or employees tend to get lazy and develop their own short cuts.
This may sound obvious, but it’s surprising just how many companies fall short in this area.
Most manufacturing and processing companies, especially those dealing with food and hazardous material, are pretty vigilant, but other types of companies are often too lax. Or think that there is no real need.
Even in a marketing communications company we need to have processes. For instance…
• A contact report must be written for every client contact made. That way nothing gets forgotten, agency and client are clear about any changes in direction given, etc.
• Recruiting specs for any type of research must be vetted against the research objectives and by the people who will be using the research findings – and signed off on by the client. You also need to double-check the profiles of the people recruited prior to starting the work to make sure that your specs were followed accurately.
• You never go to press without getting client sign-off on a “size as” printer’s proof.
• You must always include seed names in your mail files of people living in the target area – and these names must be given to the data processing firm for insertion, not to the lettershop company.
• etc.
Seemingly little things, but I’ve learned that things only go wrong “the one time” we don’t follow a set procedure.
We conducted research with +100 other firms in multiple industries to confirm what we suspected – that no company can operate without established ways of doing things. We spoke with all kinds of companies from bakeries to hairdressing salons to automotive repair shops to data processing firms to research labs to architect firms to convenience stores to... well, let’s just say there was a good cross-section of companies.
Before the investigation we asked a panel of business students which of the targetted firms needed to have processes (other than financial) in place to success. They believed that less than half of the firms needed to be process-driven. They were wrong.
Here’s what we found. Companies fell into one of two categories: 1) Process-oriented companies that function relatively smoothly and 2) Ones that fly by the seat of their pants and spend as much time putting out fires as they do performing revenue generating tasks.
The ones with processes in place
Each and every company that fell into this category – without exception – echoed the sentiment expressed by this one entrepreneur from a consulting firm:
“We have rules for how things should be done. Whenever we take a shortcut and skip a step, that laziness usually comes back to bite us in the butt.”
A caterer said: “Whenever we deviate from our established processes, it’s only dumb luck that keeps the wheel from coming off the bus.”
In many cases, the establishing of set procedures followed a series of small setbacks – or was implemented after a really major screw-up that threatened the very survival of the business.
Interestingly, each of these firms was profitable – and reported increases in both revenue and profitability of anywhere from 10% to 30% in the first year in which process were introduced and actually followed.
The ones without set procedures
Each of the companies that operated without established practices for everyday tasks had the following in common:
• They spent anywhere from 25% – 50% of their work week solving problems - most of which were a result of employee error.
• Their profitability was lower than the average for similar-sized firms in their industry – sometimes as much as 60% lower.
• The business did not have a written business plan and was growing like an unpruned bush – out in every direction but up.
2) Create contingency plans
Gather people from all areas of the company. Ask them to think about all the things that could possibly go wrong in their work day. Encourage employees to submit ideas for solving the identified problems as well as for improving safety and productivity in their work area.
From this input, create a written game plan of the process to follow when the yoghurt starts dripping on the proverbial fan.
Make sure that there are at least two copies of this binder – and if the operation is a large one, that there are a couple of copies in each key functional area of the company. Employees should all know about the binder and be taught that when things go wrong they need to...
• Call 911 (in cases of physical injury, fire, etc.)
• Alert their supervisor
• Get the binder and follow the recommended steps as appropriate
3) Cultivate a Culture of Trust and Open Communication
This is just good business practice – but can prove invaluable in times of company crisis.
If there is already good dialogue between senior executives and the rank and file, it makes it easier to communicate with employees if there is a serious problem.
When Maple Leaf Foods experienced its listeria outbreak, CEO and President Michael H. McCain was able to inform his employees about the steps being taken through an internal communication tool. Prior to the incident he updated employees weekly through a personal e-mail message. Employees had come to know and trust him and, as a result, were reassured by the postings during the crisis.
More importantly, in this kind of environment employees will be quick to alert colleague and/or supervisors to potential problems, rather than covering things up because of fear of reprisal.
4) Court the Press
Companies that maintain cordial relations with members of the press are more apt to be portrayed in a more sympathetic light when things go wrong – provided they do the right things to address the problem, of course.
And as for the details on the process to follow (see below), I really will fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is."
Jane-Michele Clark
Monday, July 12, 2010
If you mess up, ‘fess up
When things go off the rails (and face it, they often do in business), I believe in telling the truth...and taking accountability. When I said this once, someone added (more than half seriously), “or as much as you can without jeopardizing your relationship with the client”. Not a good idea.
My advice: Always tells the truth – especially to your clients. In my experience, if you’ve been doing a good job, then you will never get into trouble by saying, “We made a mistake. These are the ramifications and this is what we are going to do to make it right.”
This includes accepting responsibility for an error made by any member of your team – from a more junior employee to a third party “supplier/ subcontractor/ vendor” (I avoid all these terms as I find that by treating people as members of the same team, that the working relationships are better and the work more effective, but that is grist for another article mill). After all, you hired them. The client doesn’t care whose fault it is; they just want it to be fixed, and fixed properly. Now.
This will include paying whatever charges are necessary to make it right. It is important to let the client know what is being done to solve the problem, and to keep them informed along the way. Once you’ve explained how you will correct matters, it’s important to ask, “Is there anything else you would like us to do to make this right?” I have yet to have a client come back and add anything unreasonable to the mix. More often than not they have offered to contribute financially to the solution, or have suggested ways in which we can correct the problem more quickly and/or less expensively.
The only exception: When your client is partly to blame, you need to have a heart-to-heart with them and figure out an appropriate way to share related costs from the get-go.
Once the matter has been resolved, apologize one last time and move on. Do NOT bring it up again in the hopes of getting kudos for how you handled the problem. After all, you or your team made the mess; it’s only right that you were the one to sort it out.
The same advice holds true when you are the one who had screwed up at work. Own up to it, apologize and fix the problem and manage the fallout.
I was once asked if there is a process to follow when the yoghurt hits the fan. There is. The fleshed out version of this will be the subject of another blog, but here are the bare bone basics:
• Investigate immediately.
• Activate your response plan according to what has happened (and yes, this means you must have one!).
• Be – and be seen to be – sympathetic and pro-active.
• Get the press and social media on your side.
• Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
• Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
• Go the extra yard to make things right… be perceived to be doing the “right thing”.
• Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
I’ll fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michele Clark
My advice: Always tells the truth – especially to your clients. In my experience, if you’ve been doing a good job, then you will never get into trouble by saying, “We made a mistake. These are the ramifications and this is what we are going to do to make it right.”
This includes accepting responsibility for an error made by any member of your team – from a more junior employee to a third party “supplier/ subcontractor/ vendor” (I avoid all these terms as I find that by treating people as members of the same team, that the working relationships are better and the work more effective, but that is grist for another article mill). After all, you hired them. The client doesn’t care whose fault it is; they just want it to be fixed, and fixed properly. Now.
This will include paying whatever charges are necessary to make it right. It is important to let the client know what is being done to solve the problem, and to keep them informed along the way. Once you’ve explained how you will correct matters, it’s important to ask, “Is there anything else you would like us to do to make this right?” I have yet to have a client come back and add anything unreasonable to the mix. More often than not they have offered to contribute financially to the solution, or have suggested ways in which we can correct the problem more quickly and/or less expensively.
The only exception: When your client is partly to blame, you need to have a heart-to-heart with them and figure out an appropriate way to share related costs from the get-go.
Once the matter has been resolved, apologize one last time and move on. Do NOT bring it up again in the hopes of getting kudos for how you handled the problem. After all, you or your team made the mess; it’s only right that you were the one to sort it out.
The same advice holds true when you are the one who had screwed up at work. Own up to it, apologize and fix the problem and manage the fallout.
I was once asked if there is a process to follow when the yoghurt hits the fan. There is. The fleshed out version of this will be the subject of another blog, but here are the bare bone basics:
• Investigate immediately.
• Activate your response plan according to what has happened (and yes, this means you must have one!).
• Be – and be seen to be – sympathetic and pro-active.
• Get the press and social media on your side.
• Apologize as appropriate; be sorry for what happened, even if it’s not your fault.
• Do not deny culpability at the outset when it is not your fault; get a 3rd party to exonerate you.
• Go the extra yard to make things right… be perceived to be doing the “right thing”.
• Use the ‘incident’ to make improvements, and even become an industry leader in some areas – but do not use this as a PR tool!
I’ll fill in the details with my next post. In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com.
Until then, remember to have fun and be prepared to “go out on a limb because that is where the fruit is.”
Jane-Michele Clark
Friday, June 25, 2010
Blue Ocean: One of 15 Business Strategy Pillars
Blue Ocean, Red Ocean. Why all the fuss? And how do we look at strategy development from a Blue Ocean perspective? And why do we even want to?
This may be old news for some, but I was recently asked about Blue Ocean Strategy, hence this post.
There’s nothing new to report here – just as the concept wasn’t new when it made the news when Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant was published in 2005.
W. Chan Kim and Renée Mauborgn, authors of the book, articulated something that good marketers have always known.
Specifically, that an excellent way for companies to realize strong growth and achieve above average profits is by carving out a new niche for themselves and creating demand in what may, for a while, be uncontested market space.
Kim and Mauborgn dubbed this Blue Ocean Strategy. Red Ocean is the term they associated, somewhat disparagingly, with the more traditional approach of competing head-to-head with direct and indirect competitors for a larger share of a fixed size pie, (i.e. known customers in an existing industry). This traditional approach should not be dismissed out of hand, however, because many organizations achieve excellent results the Red Ocean way by offering a product or service that has a higher perceived value than other market options, and marketing it creatively.
Red Ocean Strategy is viewed as a zero-sum game where one company’s gain reflects another company’s loss. “Stealing market share” is a key element of this approach – and in some cases is the right way to approach the problem at hand.
There are times, however, when it’s tough to steal share and to realize sufficient gains to achieve double digit increases. This is especially tough when…
• the market is saturated,
• consumers are bombarded with too many choices,
• supply exceeds demand and prices plummet, etc.
In these circumstances, the only way to leap ahead of the pack is to challenge the underlying assumptions in the industry – and for senior executives to question the way their company competes in their vertical and how it conducts business in general. Unfortunately, this happens all too infrequently.
In this kind of tough market situation I advise clients to….
• Look beyond their current market boundaries – to see if there are complementary industries that could use their products or services (perhaps with a little tweaking.
• To focus on ways their products can solve myriad consumer problems (retail or corporate) – not just the ones of the current target audience.
• Determine if there are easily-incorporated changes to the product that could stimulate demand in the existing market segments.
• Pursue a reasonable cost strategy (it’s necessary to offer the perceived value – it is not necessary to be the lowest cost provider.
For many companies this will highlight ways of doing business, and identify previously ignored markets. Creating strategies to successfully sell to these segments will usually represent a paradigm shift... and this is really what the Blue Ocean approach is all about.
Over the past 100 years or so (as I said, the concept is not new), it was this kind of thinking that led to...
• Ford introducing the Model T in 1908
• Sunflight Holidays giving Canadians cheap Caribbean holidays with charted flights in the 1970s
• Fred Smith founding FedEx in 1971 and brining the world overnight delivery 2 years later
• CNN bringing us in 1980 with 24/7 news in 1980
• Starbucks giving us coffee bars and the +$5 cup of joe to go
• Cirque de Soleil with its sold out yet lion-less circus acts
Not to mention mutual funds, cell phones, discount retail, minivans, snow boards, home “video” and more.
There are multiple benefits to having this “new mover advantage” (a.k.a. "first to market" advantage). Among them:
• Higher margins in the early days;
• An opportunity to become the dominant player; and
• The opportunity to set the standard (think iPod, iPhones, etc.).
The principle of looking for the sweet spot where your company’s products and/ or services are truly differentiated from those of anyone else doing business in the sector, is simply one of the key pillars for developing good business strategy.
What are the other ones? From my perspective, there are 15 business strategy pillars:
1. Being consistent in what the brand represents – or making one major change to the brand’s positioning, and being prepared to stick with the new image (i.e. don’t destroy your brand by repeatedly changing what it represents.
2. Acting with integrity and in keeping with a set of established core values.
3. Developing a long range vision based on customer input, internal and macro-environment assessment and trend analysis.
4. Being brutally honest about your company’s strengths and weaknesses.
5. Actively formulating and exploring options that break with industry tradition. (The Blue Ocean part)
6. Finding the sweet spot where your company’s products and/ or services are truly differentiated from those of anyone else doing business in the sector. (More Blue Ocean)
7. Being willing to take calculated risks and go out on a limb. (Even more Blue Ocean)
8. Being open to the tried and true (sound like a contradiction, but both approaches are needed to develop sound strategy.
9. Getting input from experts outside your company and industry who have faced similar challenges (different industries tend to solve problems in different ways, and can provide valuable insight.
10. Getting input (and buy-in) from all key functional areas of the company as the strategy is developed.
11. Ensuring that the methods/ path chosen to achieve the vision are sustainable over the long term.
12. Modelling the ‘best’, ‘worst’ and ‘most likely’ scenarios – and making sure that each assumption in the model is based on research, not pure gut.
13. Testing the bold idea before bringing it to market.
14. Making sure all company personnel are brought up to speed on what is happening (good internal communications and training are essential here.
15. Promoting the change(s) creatively in ways that have impact (impact and marketing vehicle choices.
Going back to the original question, I would have to say that Blue Ocean strategy is not a new concept, but the authors of the book labelled what has always been a sound business practice, making it easier to a) explain the concept and b) get corporate buy-in.
How you go about finding your Blue Ocean/ Sweet Spot will be the subject of another post.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is." Jane-Michele Clark
This may be old news for some, but I was recently asked about Blue Ocean Strategy, hence this post.
There’s nothing new to report here – just as the concept wasn’t new when it made the news when Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant was published in 2005.
W. Chan Kim and Renée Mauborgn, authors of the book, articulated something that good marketers have always known.
Specifically, that an excellent way for companies to realize strong growth and achieve above average profits is by carving out a new niche for themselves and creating demand in what may, for a while, be uncontested market space.
Kim and Mauborgn dubbed this Blue Ocean Strategy. Red Ocean is the term they associated, somewhat disparagingly, with the more traditional approach of competing head-to-head with direct and indirect competitors for a larger share of a fixed size pie, (i.e. known customers in an existing industry). This traditional approach should not be dismissed out of hand, however, because many organizations achieve excellent results the Red Ocean way by offering a product or service that has a higher perceived value than other market options, and marketing it creatively.
Red Ocean Strategy is viewed as a zero-sum game where one company’s gain reflects another company’s loss. “Stealing market share” is a key element of this approach – and in some cases is the right way to approach the problem at hand.
There are times, however, when it’s tough to steal share and to realize sufficient gains to achieve double digit increases. This is especially tough when…
• the market is saturated,
• consumers are bombarded with too many choices,
• supply exceeds demand and prices plummet, etc.
In these circumstances, the only way to leap ahead of the pack is to challenge the underlying assumptions in the industry – and for senior executives to question the way their company competes in their vertical and how it conducts business in general. Unfortunately, this happens all too infrequently.
In this kind of tough market situation I advise clients to….
• Look beyond their current market boundaries – to see if there are complementary industries that could use their products or services (perhaps with a little tweaking.
• To focus on ways their products can solve myriad consumer problems (retail or corporate) – not just the ones of the current target audience.
• Determine if there are easily-incorporated changes to the product that could stimulate demand in the existing market segments.
• Pursue a reasonable cost strategy (it’s necessary to offer the perceived value – it is not necessary to be the lowest cost provider.
For many companies this will highlight ways of doing business, and identify previously ignored markets. Creating strategies to successfully sell to these segments will usually represent a paradigm shift... and this is really what the Blue Ocean approach is all about.
Over the past 100 years or so (as I said, the concept is not new), it was this kind of thinking that led to...
• Ford introducing the Model T in 1908
• Sunflight Holidays giving Canadians cheap Caribbean holidays with charted flights in the 1970s
• Fred Smith founding FedEx in 1971 and brining the world overnight delivery 2 years later
• CNN bringing us in 1980 with 24/7 news in 1980
• Starbucks giving us coffee bars and the +$5 cup of joe to go
• Cirque de Soleil with its sold out yet lion-less circus acts
Not to mention mutual funds, cell phones, discount retail, minivans, snow boards, home “video” and more.
There are multiple benefits to having this “new mover advantage” (a.k.a. "first to market" advantage). Among them:
• Higher margins in the early days;
• An opportunity to become the dominant player; and
• The opportunity to set the standard (think iPod, iPhones, etc.).
The principle of looking for the sweet spot where your company’s products and/ or services are truly differentiated from those of anyone else doing business in the sector, is simply one of the key pillars for developing good business strategy.
What are the other ones? From my perspective, there are 15 business strategy pillars:
1. Being consistent in what the brand represents – or making one major change to the brand’s positioning, and being prepared to stick with the new image (i.e. don’t destroy your brand by repeatedly changing what it represents.
2. Acting with integrity and in keeping with a set of established core values.
3. Developing a long range vision based on customer input, internal and macro-environment assessment and trend analysis.
4. Being brutally honest about your company’s strengths and weaknesses.
5. Actively formulating and exploring options that break with industry tradition. (The Blue Ocean part)
6. Finding the sweet spot where your company’s products and/ or services are truly differentiated from those of anyone else doing business in the sector. (More Blue Ocean)
7. Being willing to take calculated risks and go out on a limb. (Even more Blue Ocean)
8. Being open to the tried and true (sound like a contradiction, but both approaches are needed to develop sound strategy.
9. Getting input from experts outside your company and industry who have faced similar challenges (different industries tend to solve problems in different ways, and can provide valuable insight.
10. Getting input (and buy-in) from all key functional areas of the company as the strategy is developed.
11. Ensuring that the methods/ path chosen to achieve the vision are sustainable over the long term.
12. Modelling the ‘best’, ‘worst’ and ‘most likely’ scenarios – and making sure that each assumption in the model is based on research, not pure gut.
13. Testing the bold idea before bringing it to market.
14. Making sure all company personnel are brought up to speed on what is happening (good internal communications and training are essential here.
15. Promoting the change(s) creatively in ways that have impact (impact and marketing vehicle choices.
Going back to the original question, I would have to say that Blue Ocean strategy is not a new concept, but the authors of the book labelled what has always been a sound business practice, making it easier to a) explain the concept and b) get corporate buy-in.
How you go about finding your Blue Ocean/ Sweet Spot will be the subject of another post.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is." Jane-Michele Clark
Saturday, June 19, 2010
Steps for Creating Corporate Strategy
I'm often asked how we go about helping clients determine their best point five years out on the horizon.
Here are the steps we follow... and the ones I teach my MBA students, too.
1. Conduct a preliminary assessment of your company's internal strengths (look at everything from supply chain to operations to distribution channels, to the product or service itself, to its market position and positioning, to the marketing of it to consumers and through the distribution chain, to customer service... and everything in between).
2. Assess the strengths of your competitors.
3. Determine what your customers want now and are likely to want in the future.
4. Find out why your competitors' customers buy from them and not from you... and find out what it would take for them to start doing business with you (i.e. to buy their products and/or services from you).
5. Examine the trends unfolding in your industry... and in complementary industries.
6. Assess the macro environment, paying close attention to the economic climate, locally, regionally and globally.
7. Take time to really think hard about the direction in which your industry is heading and what it will take to succeed down the road.
8. Start to consider where the industry growth will be occurring... and where declines are expected. Really understand the "why" behind this.
9. Determine where a company such as your should position itself for success down the road based on what you are seeing.
10. Then - and only then - go back and re-evaluate your company in the context of what you have learnt.
Ask yourself the questions below as a starting point.
• Is this a market position that our company can occupy?
• Do we have the right core competencies? If not, can we acquire them through acquisitions, alliances, outsourcing or any other kind of partnership?
• Do we want to?
• How big a change will it mean for our organization?
• Will it be worth it, not simply from an ROI perspective, but in terms of what it means for our future growth?
• What obstacles will we need to overcome to get there?
• What will we need as an organization to leap these hurdles?
• What are the right milestones to achieve on this new path?
There are many more questions to be asked... and these will be part of the next post.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is." Jane-Michele Clark
Here are the steps we follow... and the ones I teach my MBA students, too.
1. Conduct a preliminary assessment of your company's internal strengths (look at everything from supply chain to operations to distribution channels, to the product or service itself, to its market position and positioning, to the marketing of it to consumers and through the distribution chain, to customer service... and everything in between).
2. Assess the strengths of your competitors.
3. Determine what your customers want now and are likely to want in the future.
4. Find out why your competitors' customers buy from them and not from you... and find out what it would take for them to start doing business with you (i.e. to buy their products and/or services from you).
5. Examine the trends unfolding in your industry... and in complementary industries.
6. Assess the macro environment, paying close attention to the economic climate, locally, regionally and globally.
7. Take time to really think hard about the direction in which your industry is heading and what it will take to succeed down the road.
8. Start to consider where the industry growth will be occurring... and where declines are expected. Really understand the "why" behind this.
9. Determine where a company such as your should position itself for success down the road based on what you are seeing.
10. Then - and only then - go back and re-evaluate your company in the context of what you have learnt.
Ask yourself the questions below as a starting point.
• Is this a market position that our company can occupy?
• Do we have the right core competencies? If not, can we acquire them through acquisitions, alliances, outsourcing or any other kind of partnership?
• Do we want to?
• How big a change will it mean for our organization?
• Will it be worth it, not simply from an ROI perspective, but in terms of what it means for our future growth?
• What obstacles will we need to overcome to get there?
• What will we need as an organization to leap these hurdles?
• What are the right milestones to achieve on this new path?
There are many more questions to be asked... and these will be part of the next post.
In the meantime, if you would like clarification on anything, please feel free to contact me: jmc@theQgroup.com
Until then, remember to have fun and be prepared to "go out on a limb because that is where the fruit is." Jane-Michele Clark
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