RARE Business How building better relationships with your people and your customers can deliver sustainable growth
Adrian Swinscoe
Illustrated by Rei Sekine
RARE Publications
First Edition First Printed in 2010 Apart from any fair dealing for the purposes of research or private study, or criticism or review, as permitted under the Copyright, Designs and Patents Act, 1988, this publication may only be reproduced, stored or transmitted, in any form or by any means, with the prior permission in writing of the author, or in the case of reprographic reproduction in accordance with the terms of licences issued by the Copyright Licensing Agency. Enquiries concerning reproduction outside those terms should be sent to the Publisher at the undermentioned address: RARE Publications 91 Lansdowne Place Hove Sussex BN3 1FN Published by RARE Publications Adrian Swinscoe, 2010 Š Illustrations by Rei Sekine
________________________________________________
British Library Cataloguing in Publication Data A record of this book is available from the British Library ISBN 978-0-9566735-1-0
________________________________________________ Visit www.rarepublishing.com for more information
CONTENTS Introduction The “Fix the Holes in My Bucket” Syndrome
7 10
Customer Focus The “Hole in My Bucket” Syndrome
20
Grow your business by getting closer to your existing customers
22
The strength of your brand is not dependent on the size of your marketing budget
24
Company Insight - Beales Hotels
27
If you extended it by one what would that mean to you?
29
What sort of customer relationship are you trying to create?
32
Company Insight - Speed Communications
34
Do customer surveys do more harm than good?
36
Net Promoter Score: It could change your life
39
Company Insight - Winweb
43
Add value by introducing your customer to another customer
45
Increase your profits by pruning your business
47
Company Insight - Fortune Cookie
51
After pruning, start finding more of your star customers
53
How can you create a sticky customer waiting experience?
56
Company Insight - The Partners
58
Customer complaints are key to customer retention
60
Drive customer retention by building empathy with your customers 63 Company Insight - Bostock and Pollitt
66
You get few customer complaints, yet you’re still losing customers. Why?
68
Voicemail is rubbish
72
Customer surveys, low response rates and staff targets
74
Company Insight - Happy
76
Customers making sales for me…I’d like to see that!!!
78
People Do you know your values and why it’s important you do?
81
Company Insight - Firefish
84
Are you listening? Listen more to improve customer service, sales, productivity and growth
86
Great customer service starts with internal branding
89
Company Insight: PSP Rare
92
Social media’s impact means that marketing is becoming whole business and employee engagement is key
94
Hurray, it’s Monday!
97
Company Insight - Zone
99
Belief as a driver for business growth and success
101
You can’t afford not to train your people
104
Company Insight - Europa Communications
107
Leadership 10 things you can do to foster a culture of innovation and creativity 110 Company Insight - Weboptimiser
113
Looking for value?
115
Boldness has genius, power, and magic in it
118
Company Insight - Norman Broadbent
120
Continuous innovation – the only way to stay ahead of your competitors
122
Make change happen – pushing through resistance
124
Company Insight - Brandhouse
127
Are you a creative or a reactive leader?
129
Why learning is important for leaders
132
Company Insight - Wellers Accountants
134
When times are tough here are eight ways to get more out of what you’ve got, your team, hit your targets and still grow your business 136 Open or closed book?
139
Company Insight - Foviance
141
Eight common errors why organisations fail to change
143
Is social media and the internet making Bennis’ predictions come true?
146
Thanks and Acknowledgements 149 The RARE process 151
Introduction Welcome. I have a few ideas that I would like to share with you about creating a RARE business. I have used ‘RARE’ in the title of this book to mean something that is ‘unusually great’, rather than something that is seldom seen. RARE is also the name of the process that I use when helping clients create the sort of businesses described in this book. If you are interested, there’s more on that at the end. Before we get started, let me tell you a little bit about myself, my journey to this point and where these ideas have come from. I started my professional life as an economist and then taught for a few years. However, realising that I knew little of the real world of economics, I went to work as an economist for a think-tank and a sister company of The Economist. My role in the think tank was to research, write and create new products and publications for our audience. Having done that for a few years, I then chose to try my hand in the commercial sector and went back to school to take an MBA. Following that I spent a few years with the The Financial Times Group and the Royal Dutch Shell group of companies, working on strategy, innovation, new business development and business performance projects. In 2004 I left the corporate environment to set up on my own and since then, I have worked with various types of companies helping them grow and develop their businesses. All of this has led me to here. I think the main themes that run through my career have been problem-solving, innovation and customer centric growth. This experience has been instrumental in forming some of the ideas in this book and I thank all of the people and clients that I have had the pleasure of working with over the years.
This book started out as a series of posts at my blog at www. adrianswinscoe.com, which has, over time formed into a customer focused framework for growth. The book’s framework and the subsequent ideas have been developed as a result of the work and success that I have had working with large and small businesses with existing customer and client bases. The first section explains the basis of the framework, whilst the subsequent sections cover ideas, strategies and stories that you can implement in your business across the three areas of the framework – Customer Focus, People and Leadership. A conversation with my friend and colleague, (thank you Mark), caused me to think that a useful addition to the book would be a series of case studies (or tips) on customer retention and growth, not from other writers or celebrity entrepreneurs but from CEOs and MDs of successful mid-sized companies. To this end, I have included a selection of interviews that are spread throughout the book to add depth and richness to the content and ideas that are presented. I am thankful to Rei Sekine, the wife of a former student of mine, who has provided all of the illustrations within these pages. Rei’s unique illustration style is in keeping with overall tone of the book, adding essential humour and a degree of “coolness” to the whole project.
The hybrid book/notebook format I have chosen is intentional to: - Encourage you to make notes; - Make the content engaging and bite-sized; - Encourage you to do something with the ideas that it contains. Finally, I know there are two camps1 in the book-reading population: 1. Those who are happy to make notes in books when they come across a interesting idea or the content acts as a stimulus for their own ideas. 2. Those that think the idea of writing in a book is bordering on rude – and that those in camp one should be locked up. Those in the first group, scribble away. Those in the second group… you’re welcome to buy a second copy. Now, time to get to work. I hope you enjoy it.
1
This doesn’t really apply if you are reading the e-book.
The “Fix the Holes in My Bucket” Syndrome A personal peeve of mine is when companies forget or mistreat their existing customers. It happens in a number of ways: 1. Poor service 2. Always giving the best deals to new customers 3. Not doing what they say they will do 4. Changing the rules without telling their current customers 5. Etc (If you write in books, add your gripes here) 6. 7. This got me to thinking: “What if we lived in a world where all companies took care of their existing customers as well as new customers, where companies were trusted and liked, where doing business with a company was a good experience, where companies and their employees cared about their customers?” What kind of world would that be? I believe that it is a world that is worth striving for. To understand what it would take to create it, I believe we must first understand a little more about the world that we live in now.
We live in a changing world Whilst there may be great examples out there of companies and brands that treat all of their clients very well, I believe that the majority of companies are stuck in, what I like to call, “The Hole in My Bucket” Syndrome. Do you remember the song?
There’s a hole in my bucket, dear Liza, dear Liza, There’s a hole in my bucket, dear Liza, a hole. Then fix it, dear Henry, dear Henry, dear Henry, Then fix it, dear Henry, dear Henry, fix it. And so on...
In the song, Liza advises Henry that to fix his leaky bucket, he needs straw. To cut the straw, he needs an axe. To sharpen the axe, he needs a stone. To wet the stone, he needs water. However, when the song asks how to get the water, the answer is “in a bucket”! This implies that the only bucket available is Henry’s leaky bucket. Of course, if Henry’s leaky bucket could carry water in the first place, it wouldn’t need repairing! Consequently the song gets stuck in an infinite-loop. When we think about this in the context of our businesses, is the solution really more ‘water’ to replace the lost ‘water’, or to be more specific, more customers to replace lost customers? Should the focus not, in the first place, be on fixing the ‘leaks’ before adding new water? I believe that this is the first step to creating a sustainable business and platform for growth.
Fred Reichheld, in his book The Ultimate Question (2006), had it right when he talked about good and bad profits and how the pursuit of good profits was the route to sustainable growth. “Too many companies are addicted to bad profits, profits that come at customers’ expense and drain the value out of customer relationships... Bad profits come from unfair or misleading pricing. Bad profits arise when companies save money by delivering a lousy customer experience. Bad profits are about extracting value from customers, not creating value... A company earns good profits when it so delights its customers that they willingly come back for more and not only that, they tell their friends and colleagues to do business with the company. The right goal for a company that wants to break an addiction to bad profits is to build relationships of such high quality that those relationships create promoters, generate good profits, and fuel growth.” Further, I believe that businesses that pursue ‘bad profits’ do so by employing huge amounts of traditional marketing strategies, where the belief is he who shouts the loudest to the most people in the most places will get the most customers. That may have been the winning strategy of the 20th Century; but not any more. In 2006 Chris Anderson, in his influential book The Long Tail, wrote that technology was fundamentally changing the way companies do business and how they are viewed by their customers. “We’re entering an era of radical change for marketers. Faith in advertising and the institutions that pay for it is waning, while faith in individuals is on the rise. Peers trust peers.”
This is borne out by many surveys. One influential one from Edelman, a global PR firm, in 2009 and 2010 showed that trust in companies’ communications is going down and competition for our attention is going up. Their survey found that the most trusted information from a company comes from the following areas:
Source: Edelman Trust Barometer 2010 (www.edelman.co.uk/trustbarometer)
All of these things present huge challenges to the way that we currently do business. It questions the way that companies find, engage and communicate with their market place as well as calling into question the traditional methods for marketing and growing our businesses. So, let’s look at the overall situation of our changing market place: - The effectiveness of traditional marketing methods is going down. - Trust in company and brand communications is going down. - The voice of the customer is being amplified by the use of new technology, the internet and social media. - Service levels seem to be going down, or is it that we are demanding more? - Competition is ever increasing. - Despite the data, companies are still largely customer acquisition focused due to an over-riding focus on short-term results and bonuses. However, in the face of such compelling data and a changing market-place, why are companies not changing their ways to ones that are dedicated to pursue sustainable growth or, what Reichheld called, ‘good profits’? I think there are a number of reasons: 1. Traditional marketing methods and their supporting departments are deeply embedded in our existing business modus operandi. 2. There are deep cultural, management, leadership and knowledge barriers to change.
3. There is too much focus on short-term markets, results, announcements and bonuses rather than on longer-term sustainable growth and customer relationships.
So what next? Whilst the challenges may look tall and the road long, I believe the objective is eminently achievable. It will take leadership, vision, teamwork, and in some places guts, to overcome these challenges, but it is an objective that, I believe, we should strive for and one that is worthy of your consideration. Within these pages you will discover a simple framework for established businesses that provides comparable, or better, growth results by changing your focus from attracting new customers to nurturing and developing your existing customer base. Now, whilst many companies talk a good game of being customer focused in real terms they are just talking good strategy but not delivering on the ground. I believe this is due to the fact that all good sustainable and customer focused growth strategies are enabled by two things: People and Leadership. Before going further, let me define what I mean by each area: Customer Focus is all about ideas and strategies that will help companies build customer retention, loyalty, service, experience and their brand. Although, I don’t specifically talk about it in the book, I believe that if you do these things correctly, referrals and great word of mouth will flow naturally. People is about ways to help build the team and culture, develop innovation, improve communication and increase engagement with employees. Leadership is about how to develop the vision, strategy, and leadership style, whilst also cultivating innovation and managing the change that you will need, to create the sustainable business that you want.
The rest of this book will concentrate on sharing a few ideas that will help “Fix the Holes in Your Bucket� or, at least, stimulate you to think differently about your own holes. Please note that not all of these strategies or ideas will be applicable to all businesses and it is not an exhaustive list. They are meant to stimulate, to make you think about your own business and if possible, to customize to your own situation. These are not necessarily turn-key strategies to change your business, although some quick wins are outlined. This book has been written with the view that each business is unique and consequently requires a unique approach. It is your business after all, and because of that it is unique. So, if your goal is to lead an incredible team, and to build a truly customer-focused, happy, growing and sustainable business, then the following ideas are your guide to success.
Customer Focus
The “Hole in My Bucket” Syndrome
The “Hole in My Bucket” song referenced in the previous chapter is a children’s favourite and one that I am sure many of you are familiar with and probably sung as a child. It tells a story where, ultimately, Henry needs water to wet the stone to cut the straw to plug the hole. The moral being that if your bucket didn’t leak water then it wouldn’t need to be repaired in the first place. Applying this to customer retention in business, (ie. not losing them to competitors), sustainable growth companies realise that it’s far more expensive to find new customers than keep existing ones and so put a lot of their effort and investment into maintaining and growing relationships with existing customers. In fact, in the marketing literature it is estimated that to acquire a new customer can be anywhere from six-to-eight times more expensive than keeping an existing one. Less sensible and sustainable companies find themselves spending large amounts of money and effort on acquiring new customers and losing more business than they gain because of poor customer retention strategies and activity. If we think back to the song and think about our businesses, we need to ask ourselves if our businesses are ‘leaky buckets’ and whether they need to be fixed before we embark on strategies designed to acquire new customers. Fixing a ‘leaky bucket’ will save time and money. It will help build a strong brand and a more sustainable business. Is your business a “leaky bucket”? If so, where are the leaks and what can you do to fix them?
Grow your business by getting closer to your existing customers
When trying to engineer new growth, many businesses fall into the trap of just trying to “buy” new customers. However, there’s an easier way of increasing your sales than courting new customers. It’s generating more sales from your existing customers. Rather than going down the path of generating new relationships why not try and develop the relationships you have already built up with existing or past customers. They already know you and they like what you do for them.
Example 1 A client that we work with (they make custom made wood products) was struggling to come up with ways to generate new business from existing clients. They were even hesitant about just calling up clients to keep in touch. As a result, we came up with the idea that they offer a free service or healthcheck for the work they had done for their existing clients. This was something that they were comfortable with. Keen to get going, they started making calls and their first call generated a visit to one of their clients and they delivered their service. The client was delighted with the service and scheduled £20,000 of new work. Pretty good for a bit of brainstorming and one phone call!
Example 2 A friend of mine bought a new bike recently. He’s a keen cyclist and it was fairly expensive. However, after the purchase, my friend never heard from the shop again. How much effort would it have taken for that shop to collect my friend’s contact details, put them on the mailing list, make a note to call them in 6 weeks to schedule them in for their ‘free’ tune up service and then to follow up with them on any other items of ‘kit’ that they mentioned or expressed an interest in when in the shop? How much more could my friend be worth to that cycling shop? The lesson here is this: What can you provide to your clients that has limited incremental cost to your business but offers high perceived value to your clients?
The strength of your brand is not dependent on the size of your marketing budget
Imagine you are in a situation – whether with friends or with work colleagues – and you need to buy something: a new computer; a new car; a flight to a conference; or whatever. Who do you call? In each case, the answers that come to mind will be driven by your experience, your budget and the emotions associated with each company or supplier. These are based on your perception of their “brand”. What this means is that every company has a brand, good or bad, whether they like it or not.
Next, think about this picture. Whose logo is it? When you see it, what emotions does it evoke in you? This is their brand. What Apple’s brand stands for is not important. What is important is what you believe, feel and perceive they stand for and whether they deliver against those values. A brand is not a logo, slogan, publicity campaign or a set of ads. You select a company because you trust them and you believe they will deliver. These are the two aspects that are important to every company of any size. Therefore a business’ brand is subjective – essentially, it’s about trust. Look at some the best brands around the internet, for example: Google, eBay and Amazon. What do they all have in common? People trust them! Good companies create good brands by creating trust. Do you need a big marketing budget to create trust? No! Buying awareness does not create trust or a brand. It only creates awareness.
The business world is littered with examples of failed companies that bought a lot of awareness. DeLorean Motor Company, Pets. com, Boo.com, Enron and the Fashion Café (remember that one?), stand out as highly publicised failures. Why did they fail? Big promises and failure to deliver. A big marketing budget can buy you attention but it does not buy you reputation or trust. That is earned by your people, your products and your services. Even small companies don’t need lots of money to create a strong brand. How do you create a great brand? That’s where all of your business assets come into play. These include your identity (logos, campaigns, uniforms, website etc), your products and services, your leadership, your spokespeople, your customer service team as well as your delivery and sales people. All of these things are elements that influence the emotional bond and the level of trust that your customer base has with your business. So, when you build trust, you build a strong brand. If you can do that, then you will build sales and create customers. It’s then up to you how long you keep them for. Every touch point a customer has with your business will create an emotional reaction. Is it consistent across your business? Is it creating the level of trust you want? If not, what do you have to do to improve it?
Company Insight - Beales Hotels Beales Hotels (www.bealeshotels.co.uk) is an independent, familyrun hotel company that can date its origins back to 1769. Andrew Beale is the 8th generation of Beale to run the business which runs the two highest rated four star hotels in North London and Hertfordshire – West Lodge Park in Hadley Wood and Beales Hotel in Hatfield. The business has 170 staff and a turnover of just over £5million. Andrew shared some insights about what has made his family’s business so successful in retaining customers, building a great team and driving repeat business and growth. One of the key strengths of the business, he believes, is the long service of many of the team, some of which have been with the company for over 20 years. The longest serving member of the team has been with the business for over 37 years! One of Andrew’s proudest moments was when Beales Hotels won the National Sustainable City Award at Mansion House in London in 2007, which he believes rewarded and recognised the whole team at Beales Hotels and their approach and commitment to sustainability in business.
Andrew also shared some of his insights with us: 1. Longevity of ownership and staff service are two main keys to building customer retention and loyalty. This is evidenced by the fact that many of their guests have been customers for decades. 2. Treating the staff with the respect they deserve for the hard work they do. 3. Concentrate on what you do best and don’t try to be all things to all people. 4. Build a very close knit company with a lot of contact between directors, management and staff. 5. Show commitment to staff. Despite the recent recession, Beales did not make a single person redundant although sales shrunk in the recession. Guests like the authenticity that comes from dealing with real people who are long serving and know what they are talking about. The result was that sales were not as badly hit as many other hotel chains. 6. Always promote from within. Beales believe it is essential to give opportunity to your existing staff and is a vital way of maintaining the company values and culture whilst also providing continuity of service to their guests. This is a fantastic example of a long-established and thriving business that focuses on its customers and their team. Can you learn anything from their approach?
If you extended it by one what would that mean to you?
One of the most important and oft overlooked metrics I come across when I speak to CEOs, MDs and entrepreneurs is the knowledge of the lifetime value of each of their customers.
Too often companies are focused on generating new customers through new marketing and sales campaigns. However, it is (almost) always preferable and more profitable to nurture and develop an existing client relationship rather than find and develop a new relationship. To highlight just how important this factor is, you will need to calculate your Customer Lifetime Value. To do this you will need to perform the following calculation: Average Transaction Size
x
Number of Purchases Per Year
x
Number of Years as a Customer
=
Estimated Direct Lifetime Value
+
Value of Client Referrals
=
Total Customer Lifetime Value Most of these numbers are pretty straightforward to find out and calculate. However, the tricky one and the one where there is a lot of value is the ‘Value of client referrals’. This can be calculated by multiplying the estimated direct lifetime value of the customer by the number of total referrals from your average customer. Add this to the estimated direct lifetime value of that customer to give the result: ‘Total Customer Lifetime Value’.
Do you know this number for your business? When you do, you will see the value that your customers deliver to your business and, hopefully, it will spur you on to focus on keeping your existing customers for longer and developing those relationships. When a business starts to have a proper understanding of its ‘Total Customer Lifetime Value’ it can be a key to a successful and sustainable business. Finally, let’s take an example to illustrate this. There is anecdotal evidence to suggest that accountancy firms keep their clients, on average, for between six and seven years. What would be the impact of extending that by one? Both in terms of the estimated direct lifetime value of a client and the value of the referrals they deliver to the business? What would be the impact of extending your customer’s lifetime by one for your business? What would it take to do this?
What sort of customer relationship are you trying to create?
In today’s modern world, in order to manage and grow your customer relationships you have to understand what type of relationship you have. There are various types of relationships that a customer can have with a business. The types listed below are some of the relationships that exist and form a continuum: 1. Purely transactional. It’s a simple sale. Here the customer relationship is such that the customer knows what they want, they come, they buy, that’s it. Usually, standard commodity products. A business that offers just this has little to build on and business may be subject to peaks and troughs and unpredictability. This could be as simple as buying a product from a high street retail store.
2. The relationship develops and trust grows. Here the business starts to really understand the customer’s real issues and the business offers degrees of continuity, consistency, customization and sustainability which, although may be intangible, are seen to have value. 3. We’re in a relationship and here’s how we can make it better. This is where a longer-term arrangement is seen as being the best solution by both the customer and the business, because it offers more intangible benefits for the customer in other areas of their business or life. This could take the form of training, access to new technology and product developments. 4. It’s now a partnership. The customer and the business act as one and become almost seamless where connected. The business is virtually part of the customer’s organization and treated as such. The best example of this would be out-sourcing, where the business acts as an extension of the customer. This type of relationship requires real collaboration and work and is often difficult to undo, even if it were in the customer’s interests to do so. This, in business terms, is the pinnacle of relationship that many businesses aspire to. Why is this important? It’s important because if you plan on developing your relationship with your customers then it is useful to understand where you are currently on the continuum. Where is your business on the continuum and where would you like it to be?
Company Insight - Speed Communications Launched in March 2009, Speed (www.speedcommunications. com) is a PR consultancy that advises brands how to manage their reputation in print, broadcast, online and social media. Formed by bringing together the teams of BMA Communications, Custard PR, Lighthouse PR, Mantra PR and Rainier PR it specialises in the consumer, technology, business and corporate sectors. Speed is run by Stephen Waddington and Steve Earl as joint Managing Directors and has a combined fee income of around £5 million and employs 50 people. Stephen shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. One of Stephen’s proudest moments was, as a former journalist, co-founding Rainier PR his first PR agency in September 1998 with his now co-Managing Director, Steve Earl. Stephen also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. We do everything that we recommend our client should do. Speed believe that they are their own most important client and, as such, are always actively engaged in conversations, like speaking at conferences, on issues that are important to them and the creative and media industries. Another example is that everyone is expected to represent the business by blogging and tweeting on behalf of the business.
2. Honesty and transparency with our clients and prospects. If they can’t do something or they don’t think it will work they are not afraid to say so. Speed’s absolute transparency about the way they work empowers their people and is appreciated by both clients and prospects. This has caused them to be a solitary voice at times but ultimately, clients and prospects respect the fact that they’re prepared to take a point of view and don’t compromise their values. 3. Have a rigorous approach to qualifying new business. Some customers just aren’t right for your business and it’s easier to recognize that before you embark on a relationship. 4. Clear and frequent communication builds the team. Clear channels of communication and forums to discuss information about the business, ranging from board reports, a weekly newsletter, monthly meetings and lunchtime workshops, all help build communication amongst the team and promotes understanding and alignment of the team. 5. Everyone has an operational role. At Speed, everyone has an operational role in one of their four teams (marketing, people, client services and creative) and a direct influence in driving its future. 6. Don’t leave individual development to chance. Speed uses 360degree assessments, combined with transparent objectives tied to job descriptions, to ensure that all team members are always aware of what they need to do to develop, progress and/or be promoted to the next role. This is a great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Do customer surveys do more harm than good?
I was with a client the other day and we were chatting about his business when he received a call from a person who wanted to conduct a customer survey. They said it would only take a few minutes. I don’t know about you, but when I have received calls like this, the few minutes have invariably turned into a lengthy series of questions about my customer experience. It often leaves me a little annoyed and feeling that I have been duped somehow. This got me to thinking about this approach and what impact it has on customer relations, repeat business and overall business growth. Could it be that when firms extensively survey their customers, they potentially drive them away, despite their good intentions?
Thinking about this a little more reminded me of a part of the book I mentioned earlier: The Ultimate Question by Fred Reichheld. Reichheld introduces his Net Promoter Score approach and advocates that all customer surveys be boiled down to one central question: “As one of our customers, how likely is it that you will recommend or refer our company to a family member, friend or colleague?� That may be an extreme approach but I think there is real value in this idea. Here is the approach I advocate my clients use: Question: Are you happy with the product/service that you received from our company? If No, then ask: So we can learn, could you tell us how we could get better? If Yes, then ask: Would you be willing to recommend us to a friend, family member, colleague etc? This is, essentially, based around a customer insight that says that customers judge your performance based on what they are an expert in. This is not necessarily what you may an expert in. Let me explain: Example 1: If you are a restaurateur, the restaurant experience could be great but if the toilets were a mess and unhygienic, what impact would that have on the overall customer experience? What would they think of you as a restaurateur?
Example 2: If you are an accountant, say, the main factor that the client will measure you on is likely to be how quickly you return their calls, how helpful you are, how you demystify tax and accounts and how much money you save on their tax bill. Or maybe, contacts you introduce them to who ultimately help them to grow their business. This approach is based around the idea that there is such a thing as good and bad profits, where good profits are those that come from customers that are happy and refer you on to other customers and that bad profits are associated with disgruntled one-time customers. Understanding this balance is therefore the gold mine to understanding the growth potential in your business. He goes on to say that understanding this balance is the only thing that businesses should be focused on with regards to their customers. Here are a couple of questions that that could help you apply this to your business: 1. Are you surveying your customers? If not, then why not start – just keep it simple. 2. If you are surveying your customers, are your surveys too complicated and are they turning people off thereby limiting your potential for repeat business and referrals?
Net Promoter Score: It could change your life
The previous idea “Do customer surveys do more harm than good?�, touched on a strategy called your Net Promoter Score (NPS). This approach is based around the idea that there is such a thing as good and bad profits, where good profits are those that come from the repeat buyer who refers you onto other customers and bad profits come from one-time and unhappy customers.
If a business can understand this balance and develop it (ie. maximising those customers that repeat buy and refer you on) then it is a sure-fire way of mining a rich seam of potential growth. Fred Reichheld and his colleagues at Bain have data that concludes that companies that are sustainably profitable over the long-term have Net Promoter Scores (NPS) two times higher than the average company and that those that have the highest NPS scores outperform their competitors by a factor of 2.5 times. How does it work? NPS is based on the principle that every business’ customers can be split into three groups: 1. Promoters are fans of your business who keep buying from you and urge their friends and contacts to do the same. 2. Passives or Neutrals are those customers that are neither happy nor unhappy customers and could be easy targets for your competition. 3. Detractors are customers who are unhappy or who have had a negative experience and would actively talk about their experience to their friends and contacts and urge them not to buy from your business.
This equation is how we calculate a Net Promoter Score for a company:
While an easy concept to grasp, the NPS idea is a completely different way to manage and organise the way we see customers and how we manage growth. A great proponent of the NPS way of building your business and a great success story is Zappos.com. They grew from zero to over a billion dollars in sales in their first 10 years. There’s a video of Tony Hsieh of Zappos.com on Youtube talking about customer service and how NPS works for them. If you go to Youtube and search for Zappos, Tony Hsieh and Net Promoter Score I am sure you will find the video.
If you haven’t heard of Zappos then I encourage you check them out for two reasons: 1. To understand the potential impact of using a company’s traditional ad-spend to invest in their customers’ experience instead. 2. They have a great pizza story… and Zappos sell shoes! Look it up – customer service in action! Tony Hsieh says that Zappos.com have a NPS score of around 85-90%, which is why they have experienced some phenomenal growth. However, the average company only scores about 5-10%, meaning that their promoters only just outnumber their detractors. Are you spending huge amounts on marketing only to feel like you are treading water or running to stand still? Do you think that could be because you have a negative NPS score? Many companies have negative NPS scores which explains why they find it so hard to deliver profits and growth on a sustainable basis, regardless of how much they spend on marketing and acquiring new business. However, there are companies out there like Zappos, Amazon, HomeBanc, eBay, Harley-Davidson, Costco, Vanguard, and Dell, that have NPS scores of between 50 and 80%. Whilst they may still have room to get better, we can learn a lot from them. What could you learn from these businesses? And, what sort of NPS do you think you might have in your business?
Company Insight - Winweb Stefan Töpfer started WinWeb.com (www.winweb.com) in 1994 to help home & small business get online in a process he likes to call “Globalization of the Kitchen Table”. In 1995 his focus changed slightly and he went on to build Nacamar Group PLC (today part of Tiscali/The Carphone Warehouse) into one of the biggest ISPs in Europe. He sold this at the peak of the dotcom boom in August 1999. In 2000, he went back to work on WinWeb and developed the On-demand Small Business Infrastructure. The company has grown to an organisation of around 25 virtual employees over the last 10 years and has small business clients all across the world. He also writes a very popular small business blog (www.sme-blog.com), which is a Top 100 Business Blog and his ambition is to drastically decrease the mortality rate of small business, which currently runs at a horrendous 50% in the first five years. Stefan Töpfer, Winweb’s founder and CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Stefan about his proudest moment in business, he gave us a simple answer: “I’m really proud every time we help a new, local business get online and they start to get business from their new website”. Stefan also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights:
1. Don’t compartmentalise customer service. Winweb creates a great customer experience by compartmentalising customer service, which, in turn, generates word of mouth, both online and offline. 2. Make a difference. The standard mortality rate for small businesses is 50% in the first 5 years. Winweb’s client mortality rate is only 35%, a huge achievement, and this is a key differentiator as they work to help their clients survive and thrive. 3. If you try to do too much you can scare your customers. If you have a wide range of services, presenting all of them in one go can scare customers. Presenting ‘modules of services’ according to their needs is a better way of communicating and not scaring customers when presenting the full offer. 4. Make sure your pricing matches expectations. Even if you can sell cheaply make sure that your pricing matches expectations. If your prices seem too cheap or too good to be true this can undermine your credibility to deliver. 5. Our team delivers not our software. We may provide software but we understand that people are essential to its delivery. Most employees have been with the company for around 10 years which provides a great degree of continuity as a team and for our customers. 6. We aim to create partnerships but this takes time. Our long average employee tenure has meant that business relationships with our clients have developed over time into partnerships. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Add value by introducing your customer to another customer
When thinking about developing your relationship with your client and building customer retention, it can be the smallest things that can make the biggest difference. Sometimes, rather than thinking about your customer in terms of what you can do for them with respect to your own products and services, why not think about who you know or which other customers you have that your customer may benefit from meeting.
The reason behind doing this is that your relationship will then start to focus on not “what is in it for me” but instead “how can I be of service to them”. The introduction may lead to something or nothing at all but what it will demonstrate is that you are thinking and that you care about your customers. We spend so much time thinking about what’s best for our business or ourselves that occasionally, having someone who is on the ‘lookout’ for us is very powerful. People and businesses love that. Think about the reaction you get when you proactively do something for a friend, family member or partner based on what you know they’d like or appreciate. Taking this concept into the business arena can produce powerful results. So, who do you know who could benefit your clients and how can you introduce them?
Increase your profits by pruning your business
How much pruning have you done in your business lately? When I hear people talking about sales goals, they’re almost always referring to gross sales e.g. “I want us to achieve £5 million in sales this year, £10 million next year, and so on and so forth”. But should that be the over-riding target? Which one is more important; gross sales or net profits? Particularly if you are looking to maximise the value of your business and contemplate an exit at some point, shouldn’t the goal be to increase net profits? It doesn’t necessarily follow that if you double your sales you are going to double your profits. In many cases quite the opposite happens. Sales may increase, but the profits lag far behind. One of the main reasons is that firms get caught up in acquiring customers by any means but not the RIGHT customers therefore having an adverse affect on their profitability.
Perhaps a better idea is to consider pruning your business from time to time – stop servicing the unprofitable and time consuming accounts – so you can reduce your costs and dramatically increase your profit margins. Pruning is a concept traditionally connected with gardening but lessons can be learned from gardening and applied to business to understand what to prune and when the best time is to prune. However, one size does not fit all! One style of pruning – whether in gardening or business – may work for one type of plant or company but may literally kill another. Here are a few “Pruning” tips to help you get started: 1 - Have a clear strategy and evaluation process The selection of clients that you want to focus on, and those you want to give up, needs to be well thought through and based on real data and criteria. Putting the work in at this planning stage will stand you in good stead in later pruning rounds. 2 - Be clear on what tools you should use In gardening most pruning will be done with a pair of secateurs. However, these will not be appropriate if you are working on a tree with large branches. It’s the same in business. You have to carefully consider what tools (email, letter, personal visit, phone call, etc.) is going to be the most appropriate tool to use if you decide to stop working with a certain customer. It is important to be aware of how you think the customer might react to each method of communication, and subsequently what impact that could have on your business. That shouldn’t stop you going ahead, you just need to careful.
3 - Understanding that there is such a thing as ‘dormancy’ Most perennials go through a period of dormancy (ie. hibernation) every year when they stop growing and no longer produce fruit. In business, be careful not to prune a customer that has not done business with you in sometime. They may just be dormant. Situations like this can offer great opportunities to ‘wake up’ that customer again. 4 - When NOT to prune The rule, with plants, is that they shouldn’t be pruned during their growth cycle. This is important to remember in business too as certain customers, products and services go through their own growth cycles. Be careful to understand where a customer is in their own growth cycle before you prune. With these thoughts in mind, let’s consider the situation that a former client of mine, Simon, found himself in. Simon owned a manufacturing company, doing nearly £6 million in total sales. The manufacturers paid his company commissions of 30 percent, so his organization earned £1,800,000. It costs him £1,500,000 to pay his 50 employees and other expenses, so the net profit was around £300,000. He had nearly 600 accounts, but the smallest 200 didn’t do much business with him. They did, however take up a lot of the sales and service department’s time, effort, and attention. Doing some analysis, Simon discovered his 200 smallest accounts spent only £500,000 with him, but took up over one-third of his company’s available time.
As we considered the implications he came to these conclusions: 1. If he stopped calling on these smallest 200 accounts, his sales would drop to £5.5 million. 2. His commission income would be £1,700,000. 3. He could reduce his employee count and total costs by 1/3, to £1,000,000, saving £500,000. In summary… Current Situation: Commission Income: £1,800,000; Costs: £1,500,000; therefore Net Profit: £300,000. Proposed situation: Commission Income: £1,700,000; Costs: £1,000,000; therefore Net Profit: £700,000. Pruning his business was the first step in Simon’s growth plan. Have you pruned any customers? What have you found is the best way to communicate and manage that process?
Company Insight - Fortune Cookie Founded in 1997, Fortune Cookie (www.fortunecookie.co.uk) is one of Europe’s most well-respected digital agencies, famous for delivering beautiful, findable, accessible websites that deliver stunning return on investment. Clients include Legal & General, UEFA, Prudential, TUI, UEFA, National Rail Enquiries, Metro International and Europcar. Over the past two years, websites designed by Fortune Cookie have been short-listed for major design awards a total of 50 times. In 2009, GP Bullhound Media Momentum Awards ranked Fortune Cookie 36th in a ranked revenue-based league of the top 50 fastest growing digital media companies in Europe. Justin Cooke, Fortune Cookie’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Justin about what his proudest moment in business was, he gave us two answers: The launch of the National Rail Enquiries website, which is one of the busiest travel sites in the UK; and Being voted Chair of the British Interactive Media Association in May 2009. Justin also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Our single-minded focus on making everything we do measurable for our clients and that we are prepared to link our fee to success.
2. Build strategic, long-term relationships with clients, trying to understand what really matters and then building a road map to help make this a reality. Not forgetting the importance of people, service and relationships and that the small things can make a big difference. By being there in the tough times, learning, listening and always trying to be better. Results matter but so do relationships. 3. Work as a team, hold stand up meetings daily 4. The Client is always right, even when they are wrong 5. A phone call is worth 10 emails. A meeting is worth 100 calls 6. Always say what you can do and what you can’t. Regular and often. Never hide away from bad news 7. Clients are your reputation. Referrals are the best secret of success 8. Create a shared vision and set of values. Our senior team worked together to create our vision, mission and values and our strategy – these are shared and brought to life communicated out at our quarterly company-wide meetings This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
After pruning, start finding more of your star customers
The previous idea was about pruning your business where I suggested ways that you can prune your business and increase its profitability. I also talked a little about Simon, a former client, and his manufacturing company and how he had applied this concept to his business.
Targeting “star” customers Pruning his business was the first step in Simon’s plan. The second was to define what they considered were the characteristics of a star customer. He then had all of his people focus their efforts toward improving the quality of their service to their best, or “star” customers. Following his earlier pruning, this proved easy to do because they were no longer spending a lot of time calling on or servicing unprofitable accounts. This meant his team could easily keep their best customers very happy, turning them into raving fans who referred lots of other businesses to Simon’s company who, funnily enough, were just like the star clients who had referred them. By focusing on a select group of clients and developing those relationships, they were also able to find additional products and services that they or their partners could provide. One of the biggest benefits of this whole process was that the attitude and morale of his organisation changed. His sales people were making more money, and everybody was having more fun because they were spending their time, energy, and effort serving their “star” customers. And with their new-found, free time, they’re now able to look for new opportunities and clients with the same profile as their best customers. Simon is now setting his sights on growing his business to £8million, and then £10million in sales, by doing business with only the star clients. He also reckons that he’s going to have a much higher profit margin.
Growing Your Business Here are three things you can do to grow your top and bottom line: 1. Prune your customer base and stop servicing those customers who take up lots of your time, but don’t do much business with you. 2. Give your best customers great levels of attention and service. In the words of Seth Godin: “Make big promises; overdeliver”. 3. Create a profile of your ideal or star client, then find more clients who match it. It’s almost guaranteed that you’ll have more fun, and make more money doing so. Do you know who your “star” clients are? If you knew, would it help you nurture that client relationship and target new clients that fit that profile?
How can you create a sticky customer waiting experience?
This is a story about customer retention when faced with queuing. I really don’t like waiting or standing in queues. I think it’s a key area for how businesses deal with, what is effectively a pent-up demand and capacity issue. It’s a bit like phoning a company and getting voicemail or a waiting message, something I will write about later in ‘Voicemail is rubbish’. As a way of showing you how one company does this, I thought I’d share this story about a local restaurant, a favourite of ours in Brighton, and how they deal with waiting customers. Bill’s in Brighton is a hugely popular restaurant, especially on a Saturday and Sunday, where they have queues of people (sometimes out the door) waiting to eat.
In order to manage the queue and maximise the likelihood that waiting customers remain queuing, they do a number of things: 1. They acknowledge all customers that come through the door 2. They give out menus in the queue; and 3. They continually communicate with customers in the queue estimating how long they will have to wait and pointing out where they will be sitting once the seated diners are finished. This seems to work for a number of reasons: 1. They maintain high food and service standards; 2. Their reputation, customer experience and quality of their food and service proceeds them; 3. By acknowledging and communicating with customers they make them feel welcomed; 4. The queue is situated so that the customers are already in the restaurant. They can see and experience some of what the already seated customers are getting; and finally 5. By giving them menus as they queue they make them feel that their buying experience has already started. This makes their customer experience extremely ’sticky’. It’s not 100% reliable but works a lot of the time. I estimate that they have a 70-80% success rate in getting people to queue. Pretty good, especially given that there is a new competitor next door. So, if you have peak demand issues or you have trouble dealing with waiting customers when times get busy, ask yourself this: What can I learn from Bill’s? How do I make my experience ’sticky’? How do I make waiting for a little while acceptable?
Company Insight - The Partners Over the last 25 years, The Partners (www.the-partners.com) has been the most creatively awarded agency in the UK (Design Week League Table November 2009). Part of the global WPP Group since 2000, The Partners offers brand consultancy and design services to national and international clients, including Vodafone, Deloitte, Aviva, Astra Zeneca and The National Gallery. Jim Prior, The Partners’ CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Jim about what his proudest moment in business was, he gave us two answers: Recognition they received for their “Grand Tour” project for The National Gallery; and the definition of a global brand positioning platform for Deloitte, and its adoption by its 165,000 people worldwide. Jim also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Consistently over-deliver against expectations. Client relationships are strengthened by surpassing expectation in terms of the nature (or quality) of the deliverable against the stated brief. 2. Every relationship is different. Manage client relationships through our most senior people, adopting a bespoke approach towards the structure and programme of work for each situation. 3. We aim to lead our industry. Promote our reputation in the industry as thought leaders and through a concerted effort to win creative awards.
4. Get the initial part right. Occasionally a relationship may not work out as desired. When this occurs it is often because the brief was not properly clarified and agreed by both parties up front. 5. Clear positioning in the marketplace. Where a client chooses to work with us they do so with a clear expectation of what they will get from us and also of the nature of the relationship that we will form with them. 6. Everyone is hands on. This is a relatively small organisation, 50 people, so our senior team involve themselves with our people in a very hands on manner. The ethos of The Partners is passed on through practical experience of collaboration in the firm. 7. Don’t talk about culture, do culture. There is s a strong social culture to the business here too. Every Friday at 5.30pm all our people gather for drinks and we share news from the week, talk about inspirational books, films or suchlike. The culture of the firm is evident in its purest form here. 8. Being the best means the best people. We only select people who demonstrate technical talent and cultural fit with our agency. This means it can take us a long time to make key hires whilst we search for the right person. 9. Loyalty has allowed us to fundamentally change our business model. Better customer retention and loyalty has shifted our business model from one dominated by short-term projects, to one of long-term retained relationships with major clients. This provides us with the ability to plan ahead on a longer term horizon. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Customer complaints are key to customer retention
Let’s play a game of word association. If I said: ‘Customer complaints!’, what would you say? Any of the following? • Customers are tricky and they are forever trying to get stuff for free. • Some of my customers are real idiots. • Is there no end to what they will complain about? • Why don’t they just read my email and the instructions and everything would be okay. • They only ever complain about minor stuff. • Why can’t they say anything positive?
Faced with a customer complaint, how do you react? Do you: • Tremble with fear. • Ignore it and hope it will go away. • Delegate it to someone else as their responsibility. • Put your ‘dukes up’ or adopt a ‘Crouching Tiger’ defensive stance. • Seek to listen and engage. The reason I ask these questions is because the way we think about customers and customer complaints is key to how we react to them. What happens and how we initially react when faced with a customer complaint is hugely important in creating a lasting impression that we make on the customer. In reality, a customer complaint is simply a statement of how someone has been let down and how something or other has not met their expectations. Right? But, it’s also an opportunity for a business to respond, to listen, to show that they care, and to solve the problem. Seen like this, when a customer complains to a business, it’s like giving the business a gift, even if sometimes it can look and feel like it’s in disguise. It’s up to the business to decide how and if it wants to carefully open this gift to see what’s inside. It is important to understand that complaining customers are still customers, and customers who take time to complain still have some confidence in the business. In most cases, it is less of a hassle just to take their business to the competition, so those who do complain are showing some degree of loyalty.
Mark Blackmore, of Lammore, teaches a really simple way of handling complaints. Here it is: • L - Listening to Understand This step is key when trying to diffuse any tension that may come with a complaint. To fuel an argument you must be argumentative. Therefore, to listen to someone’s concerns is key to diffusing the situation and understanding their issue. • E - Empathise and Take Responsibility Empathy (trying to understand their position) is different from sympathy. You need to focus on them and understand them with phrases like ‘I can understand how that would make you feel’, and ‘I can see why you feel that way’, but be careful not to collude. Next, you need to accept responsibility for the problem. It’s your problem not theirs. They are the customer. • A - Ask/Propose a Solution Once, you have developed an understanding of the situation and the customer knows that you have taken responsibility for the problem, you are now in a position to come up with a concrete plan to remedy the situation. • D - Deliver on the Promise Finally, this is the most important part as it will define the lasting impression that you will leave with the customer. Always do what you say you are going to do, when you say you will do it. Be true to your word. It’s personal for them so make it personal for you. So, when faced with a complaint try using the LEAD method. It works really well. What’s your initial reaction when faced with a complaint from a customer? What impression is that leaving on your customers?
Drive customer retention by building empathy with your customers
You run a great company and are admired by your peers for your technical prowess and the competency of your employees. You don’t have any problems finding new customers but you find that you struggle to keep them. Sound familiar? Or maybe you know a business that would fit this description?
Some companies struggle with customer retention as they get caught up in the idea of how they can be better and lose sight of the customer and their needs. This can manifest itself in many ways. They try to be: • Faster • Cheaper • Technically more proficient • More knowledgeable and so on... However, being better, faster or cheaper may not be what your customers really want. Rather than focusing on bettering your skills or efficiency, the key to better customer retention might be much simpler. Think about this. Have you ever wondered what it is like to be one of your customers? Or have you ever wondered what it would be like to be a customer of one of your competitors? No? Yes? How could this help? It is common to focus on making our businesses and teams as good as they can be. However, in the process we can get caught up in our own little world and forget what it is like to be a customer. Spending some time understanding the world from our customers’ perspective can be key to being able to build a long-term relationship with them. It’s also key in building empathy within our business. A common definition of empathy is being able to ‘walk a mile in someone else’s shoes’.
In dictionary terms it is also defined as: Identifying with, and understanding another’s situation, feelings, and motives. The basis of deep and meaningful closeness in a relationship is empathy. This is the foundation of the experience of “we” rather than just “I” or “you.” If your customer senses that you really feel how it is for them, they can feel less anxious, stressed, closer and more trusting. Like any other skill, empathy can be learnt and improved upon. Similarly, you can build empathy into your business and team. One way this can be done is by Mystery Shopping yourself or your competitors. It’s a technique that has been used since the 1940s as a way of evaluating a company’s performance from its customers’ perspective and can look at all aspects of a business from how easy it is to buy from a business, to how they deal with questions, complaints or their customer service. Independent agencies can be hired to mystery shop your business or your competitors. On completion, they will then provide detailed reports and feedback on their experiences. However, it doesn’t end there. What you learn from the Mystery Shopping experience may be great insight but it is what you do with that insight that will really allow you to build greater empathy with your clients and retain them for longer. This is only one way to build empathy with your customers. What are you doing, or could you be doing, to build this in your business?
Company Insight - Bostock and Pollitt Bostock and Pollitt (www.bostockandpollitt.com) founded in 1987, is a branding, design and digital agency that specialises in B2B communications. With around 30 employees, they provide brand strategy and identity, reporting (financial and corporate responsibility), graphics and on-line (primarily design of corporate websites, intranets, interactive presentations etc) services for a wide range of clients ranging from BT and Macmillan through to Shire Pharmaceuticals and World Gold Council. David Chapple, Bostock and Pollitt’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked David about what his proudest moment in business was, he gave us a very simple answer: “Never having to borrow money�. David also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Business is often personal. Often move business relationships onto a semi-personal footing 2. Delight and over deliver at all times. Endeavour to delight all the time and over-deliver when we can. 3. The RoI of developing trust. Personal engagement develops loyalty and trust. Clients are also more willing to share the real issues and accept an offer of help, leading to additional work.
4. Be careful of over dependency. Client dependency. It has led to an over-dependency on an individual or Client company which has backfired. It is important to spread relationships outside of one or two key individuals and keep asking yourself ‘what if this company was taken over or went bust?’ 5. The relationship is more than the project. We operate in a project based industry and so an important way of growing is to work to ensure clients keep returning when they have another project. Over time we have managed to develop a number of key clients who spend regularly and keep coming back. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
You get few customer complaints, yet you’re still losing customers. Why? I often hear stories of companies that get great customer satisfaction scores and few customer complaints but they are still losing customers. Are you one of those? When I hear of this happening, it reminds me of a piece of research that was done by US firm TARP back in 1999. Their research showed that for every 26 unhappy customers, only one will make a formal complaint. The rest of them will either stay where they are and not be happy or, more importantly, will leave to do business with someone else. According to TARP: “Customers very rarely complain to the service/product provider. Instead they will tell their friends, who will in turn tell their friends, creating a pyramid of dissatisfaction.” The real concern, however, comes from their finding that every customer who is unhappy, including those that have not taken the time to complain, will tell 10 people who, in turn, tell another 5 people each. In total, that means that for every complaint you receive, an average of 1,300 people will hear about at least one of those unhappy customers’ experiences! This is commonly known as the “Customer Complaint Iceberg”. Like the iceberg in nature, it implies there is always much more going on under the surface than is visible.
Scared? Concerned? You should be. In a world where technology allows negative opinions to spread like wild-fire, any sustainable and successful business knows that generating positive word of mouth and building strong brand awareness is crucial to their success. So before you sit back and revel in your high customer satisfaction scores and dismiss today’s complaint as unimportant in the grander scheme of things, ask yourself these questions: • Are you getting a high response rate from any customer survey or feedback process that you have in place?
• If not, for all of those that are not replying, how many could be silent complainers? • Could this be the reason that you are not getting very many complaints but are still losing customers? Let’s be clear here. It takes a brave business to ask their customers to give them their honest opinion and sometimes, the feedback may be critical. This is where your listening skills are paramount. It is only those organisations that understand what makes their customers happy and unhappy that are able to come up with ways to improve (and implement them) in the future. If this feels like it could be your business, here are a few things you could do to address the situation: 1. Get out and talk to your customers. 2. Listen to their concerns. 3. Don’t assume that a customer satisfaction survey is a substitute for this. The key to the success of any business is held by its customers. Only by spending time with them and understanding them better will you be able to define and unleash your business’s future potential. Measuring customer satisfaction and dealing with complaints is only part of the process. Digging deeper to find those unsaid complaints is just as important. However, it’s what you do with those insights that makes the real difference.
By turning those insights into action, your business will benefit from: • Improved customer retention. • Increased sales. • Increased understanding of your customers. • More referrals generated from your current customers. What do you think? Do you have a customer complaints iceberg in your business?
Voicemail is rubbish
Statistics tell us that when faced with leaving a voicemail for someone they don’t know or don’t know very well, between 70 and 80% of people will not leave a message. I checked this against my own experience and found it to be true. It may be something to do with not being prepared to leave a message or a rejection thing or something else but the fact remains that it seems to exist. What do you think? How often do you leave a message? I come across this quite a lot when dealing with all sorts of businesses, small or large. When faced with the message: “There’s no one here to take your call at present” what does that say to me? From the perspective of a prospective or, even an existing, customer, isn’t it tantamount to saying “Hello, whatever we’re doing at the moment is more important than dealing with you.”?
I’ve heard people in organisations try and combat that by asking people to leave a message with a promise that they’ll get back to them in such and such amount of time. Sometimes they do but more often than not they don’t. I think that’s worse. It says so much about how important I am to you. The fact is that we, as people and customers, much prefer to be answered by a human voice, even if it’s just to take a message. People are more likely to wait for you to return their call if they think that someone, somewhere, is dealing with it. Even if you are a small business, that does not necessarily mean employing someone and extra overheads, as these days if you’re too busy to answer the phone (or if you’re out of the office a lot and it’s impractical and inconvenient to have your mobile phone going off every few minutes) there is a solution. For a small amount every month, you can hire a tele-answering company. Some of these offer an excellent personalised service, answering with your company name and responding as if they’re there in the office with you: “I can’t see her at her desk at the moment…”. They will then forward the messages to you in the format of your choice – e-mail is popular. In this world of increasing technological solutions (many of which I really like), I think we need to be careful that we don’t lose the human touch. Are you relying on voicemail or call queueing in your business? What impact is it having on your customer’s experience? Could you do something different to improve the experience?
Customer surveys, low response rates and staff targets
On the plane on the way back from a recent climbing trip to Mallorca with a bunch of friends, the air crew distributed a customer satisfaction/feedback survey and asked the passengers to complete it and return it to the crew before they disembarked. I looked at this questionnaire. It was five pages long and very detailed. This made me wonder how many passengers would actually complete the survey. I looked around the cabin and saw many passengers receive the questionnaire, look it over, then, turned off, place it in the pocket in the chair in front of them. I completed a small part of the survey and then went to hand it in to one of the staff. I asked how these surveys went down and what response rates they got.
The stewardess I asked replied that they didn’t get many responses as it was too long but they continued to distribute it because they were targeted (graded?) on this in their performance reviews. This was despite giving feedback to their senior management with recommendations that the surveys should be made shorter. We talked already about whether customer surveys do more harm than good. In this case, I think this travel company is missing a great opportunity to get more feedback from its customers. They seem unwilling to put the effort in to make their surveys more user friendly. Why is it that senior management often ignores feedback from frontline staff about things not working? Why don’t they implement recommended changes? Is it because it’s too hard? Is it to do with internal data needs, politics and culture? How does it impact the relationship with the customer? Are you surveying your customers? Is it for your benefit or theirs?
Company Insight - Happy Founded in 1990, Happy (www.happy.co.uk) is a management consulting, e-learning and computer training company with a mission to help other organisations create great work places. Happy was originally established as an IT training company that aimed to make learning how to use software an enjoyable and involving experience. The company has since applied its methods to the areas of e-learning and management training. Their approach is based on years of experience in both creating what is recognised as one of the best work places in the country, but also on what they have learnt from the other companies listed in those awards. Happy Computers is not the largest IT training company, they have around 35 employees, although they are in the top 50 for size. However, they do punch above their weight and are the only training company in the UK to be rated in the top three by the Institute for IT Training (IITT) for 9 of the last 11 years. Henry Stewart, Happy’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Henry about what his proudest moment in business was, he told us it was being awarded rated the best company in the UK for customer service (by Management Today) in 2003 and the 2nd best place to work in the UK (Financial Times) in 2007.
Henry also shared with some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Unique approach. Happy has created a unique approach to how it delivers its services. It focuses on the whole experience of learning and makes it really enjoyable. This means that people talk and recommend us - (they have a Net Promoter Score of 70%!) 2. Don’t part on bad terms. When we fall out with people (and it doesn’t happen very often) we don’t sack people straight away. Our approach is that we help them move on to their next project. This means that even if we have had to part company with someone they still talk positively about us. 3. Give your people trust, freedom and support and they will flourish. 18 years ago Henry read Maverick by Ricardo Semler and it changed his life. Before this, he was guilty of micro-managing. Now they give people the space, trust and freedom to flourish. They support them not direct them. 4. Recruiting made easy. The best bit about this approach is that it makes recruitment very easy. Happy has a 2,000 long waiting list of people wanting to work for them. The last time they needed new trainers, there was no advert, no consultant, no external cost at all. One email to their waiting list resulted in 92 completed online application forms and the recruitment of 3 new trainers. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Customers making sales for me… I’d like to see that!!!
The term “Raving Fans” was first coined by Ken Blanchard in his book by the same name. These are customers who are so over the moon with your business and the service you provide that they will not only tell all their friends and colleagues about you, but actually introduce you and help you make sales. As previously mentioned, it’s a frightening fact of business life that we can spend between six and eight times as much money attempting to attract new customers to our businesses as we do developing the relationships we have with our existing customers. Another alarming statistic says that up to 70% of our customers who stop buying from us, reportedly do so simply because of a perceived indifference, i.e. they feel that we didn’t have the time or presence of mind to show that we care. Our businesses may not have done anything wrong, it’s just that the customer thought the organisation didn’t care enough and, so, took its business elsewhere.
Would you like your customers to shout your name from rooftops telling people why they’re missing out on something great if they’re not dealing with you? Here are some simple things that other businesses I know have done that have helped them keep their customers coming back and bringing their friends with them. • Send them thank you cards. • Use their name – people like the personal touch. • Call them up from time to time for no other reason than just to make sure everything is going well. • Let them know about new developments or stock that you think they would like. • Follow up… then follow up again. • Make great promises and then over deliver. If you care for your customers, your customers will care for you and help you to grow your business. It is as simple as that. What simple things could you do in your business that would show your customers that you care?
People
Do you know your values and why it’s important you do?
Values are the foundations that drive most, if not all, of our decisions, whether in business or in life. They influence our relationships, our customer service, our leadership style, everything. They also change over time so it can be extremely useful to re-evaluate our own values from time to time to see how things may have changed for us and why. By having a good understanding of our values, we can gain tremendous insight, clarity and focus. Furthermore, we can use those insights and clarity to make decisions about priorities and take actions that are aligned with who we are currently, and, more importantly, who we want to be in the future.
There are two reasons that values and priorities are important for our lives. 1. Decide We all have an oppinion on the best way to go about something or the best way to accomplish something. It’s your life, your business, your team, and your family so you take the decisions on what “best” means to you. 2. Consistency Life sometimes passes us in a blur and it is really easy to get distracted by new things or other people’s stuff. So, the second reason for defining your values, and therefore your priorities, is to battle inconsistency. It’s easy to fall into the trap of living, or conducting our business, by different priorities every day. One day you go to the gym, the next day you’re watching crappy TV all day long. One day you are polite to customers, the next day you’re very short and disrespectful. If we are not conscious of our values and use them to set priorities to help us stick to a clear and consistent course, we’ll naturally wander. The effect: poor results. Are there times that you have conflicting priorities? Do you sometimes feel obliged to do things that sit uncomfortably with you or things that are not important to you? Do you have a clear idea of what your values are in your business and in your personal life? Are they aligned? Taking time to discover and define your values, will help you prioritise and improve the results in areas that are most important to you.
In order to get a clear sense of what is important to you in life and business, try this: • Make a list of things that you consider important in life and business. A simple way to do this is to take a piece of paper and split it into two columns, one labeled personal and the other business. Alternately you could do a search on the internet for a list of values that will help you get started. • Mark the ones that ‘jump’ out at you. This could be in a positive or negative way. • Also, pay attention to the ones that you think are important but are not part of who you are right now as they can become part of who you want to become. • Collect a list of 5, 10, 15 values that are the most important ones to you in life and business and then prioritise them. Is everything you are doing right now the ‘best’ for you and your business? Are you consistently living your values in life and business? If yes, hooray! If not, why not? What needs to change in your business and your team to make that happen? Who do you need to be and what do you need to do, to have the outcomes you desire? How long is it since you reviewed your values, both personally and with your team?
Company Insight - Firefish Founded in January 2000, Firefish (www.firefish.ltd.uk) has rapidly progressed to become the largest independent qualitative research company in the UK. They provide the very best research and insight to some of the most successful and influential companies across the world. To do this they maintain and develop their passion for brands, their communication and the cultural worlds in which they exist. This is manifest in the dynamic and creative approach to research questions that they are proud to be known for. Alison Fydler, Firefish’s Chairman, shared some insights about what has made her business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Alison about what her proudest moment in business was, she said that it was when a member of her team said “Alison’s a legend!!” Alison also shared some insights on what she believes they do that has helped them build a truly customer-focused business and team. Here are some of her insights: 1. We are excellent at what we do. That may sound crass, but actually in today’s world of business, profit margins, targets and larger corporations owning many of our competitors, excellence is not always easy to find, and reasons for working not always clearly defined. We built the company based on a love of our business and pride in doing the best that we can, both to gain customers’ loyalty, but also for our own sense of fulfillment. This has always been the essence of who we are and all the members of the team are of the same sentiment.
2. We have also been very clear about what we do. Again, in a world where business boundaries merge together, it’s often difficult to distill what offering a company has. We do premium, strategic consumer qualitative research. We are not a brand consultancy, we are not consultants, we are excellent researchers. 3. We are also enjoyable to work with! Intelligent and fun has been relayed back to us often. Work takes up a lot of our time, so we make it as enjoyable as possible. 4. Own up to and learn from your mistakes. We all make mistakes occasionally and do not deliver excellence all of the time. The key is to internalize those mistakes, own up to them, learn from them and hopefully not make the same mistake twice. 5. Everyone knows where we are going and what we are aiming to achieve. We have company objectives that all are aware of. All know what we are doing, why we are doing it and what for and where we are going. It makes the journey all the more fruitful and pleasant. 6. Training is key. Objectives are set in collaboration, line managers have regular meetings, internal training is excellent, external courses are attended when needed. 7. We don’t take what we do for granted. We have a happiness and fulfillment survey every year to check on our progress and where we could do better. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Are you listening? Listen more to improve customer service, sales, productivity and growth
One of the biggest challenges in relationships, whether in teams, businesses, sales, social, family or personal relationships, is that we don’t listen as much as we should. Listening is different to hearing. Hearing is something that we do with our ears whilst listening is something that we do with our brains. Bad listeners are not that way because they are hard of hearing!
There are many factors that contribute to not listening as well as we should. Here are a few: • Getting distracted by what is going on around you. • The signals you are getting from the other person’s body language. • Any relationship history you might have with that person, including unresolved issues. • You’re just not interested in the subject. • They’re talking too fast or in too much detail. • The words they use (vocabulary) and how they talk. • Personal prejudices or judgments of either party. • Different personality styles or approaches. Can you think of any others? Any, or all of these can get in the way of a person getting or understanding your message or you understanding theirs. The way to tell whether you or they are listening is to take a moment to observe your own and the other person’s body language whilst you’re talking. Don’t try and get too analytical with all this. Go with what you yourself are ‘feeling’ and it should tell you whether they are listening to you or not and vice versa. Clinton: A great listener Bill Clinton has often been described as one of the greatest listeners of modern times. In the book Primary Colours by Anonymous (later revealed to be Joe Klein), the author describes Bill Clinton’s great listening ability, the way he looks into a person’s eyes, leans in, etc. He calls it ‘putting on the big ears’. It’s a great way to describe what he does as he goes into ‘listening’ mode. The key here is that he makes a decision to listen and then does it completely.
I’m not saying that we should all turn into Bill Clinton. I know it’s very easy to get caught up in our own stuff on a day-to-day basis and skip listening (as a key skill as it takes time and effort) but taking a little time and effort and applying this to yourself and your business is a guaranteed way to connect more with your customers. It will improve sales, your team’s performance, your leadership capabilities and the overall business growth. Things I learnt that have helped me I think all of us can be better listeners. Here are a few tips that have helped me work on my listening skills: • Stay focused on the other person and listen. • Don’t assume that you know where the conversation is going and don’t jump in. • Suspend your own agenda. Listening to them is about them after all. • Focus on the key points and messages. • Control distractions – make a point of turning off your phone or closing your laptop. • Stay in the present. • Make lots of eye contact, and contribute from time to time with as little as, “I see” or, “Really”. It shows that you are paying attention. I’ve found that working on my listening skills has had a tremendous positive impact, on all of my relationships, business and personal. I’ve also found that listening to others is one of the greatest compliments you can pay someone. As a business, are you listening enough to your customers, your team and your peers? What could you do to listen more or improve your listening skills?
Great customer service starts with internal branding
When you hear the word ‘marketing’ what do you think about? Most people will think of marketing to new or existing customers. Simply, they will think of marketing as an externally-focused business function. Ask the same sort of question of ‘branding’ and you will get a similar response; it’s an externally-focused function. But what about branding and marketing to your internal customers – your employees, stakeholders and investors? Done right they will become walking, talking advocates for your business. However, most organisations spend little time, attention, or money on internal marketing and branding, such as making sure employees understand the brand and communicate it well. Do your employees know and live your brand? Are they brand champions?
As a result, many problems with customers and, in some instances, employee performance and growth, can originate in the misalignment of what a company is aiming to stand for (its brand) and how that is mirrored internally (your internal brand). When these two things don’t match it can cause problems and lead to issues with customers and employee behaviour. When we talk about growing a business, marketing, customer service or a business’ brand, the reality is that it all starts from the inside and works its way out into the market. To create a strong, sustainable business it has to. Ask yourself these questions: • Does your team support and believe in the products or services that you are offering? • Is everybody behind all that you do? Are they striving to achieve and believe in it? • Are they the embodiment of your brand and company values? It’s essential that your team is involved and engaged in what is going on in your company. If your team is not behind your growth and marketing initiatives, it can have incredibly detrimental results.
In addition, embracing the idea of internal branding and integrating that into everything you do can lead to all sorts of benefits, including: • Lower staff turnover and longer tenure; • Employees who understand the brand promise, who are better able to serve customers and respond to issues; • Engaged employees who believe in the brand, and are more productive. However, the most important element is that when people in your team become champions of your brand, they themselves become a key point of differentiation for you, which is very hard for your competitors to copy. So it’s your employees that can give you the edge. In summary, when a company’s internal brand is aligned with its external brand, the relationship between the brand, the customers and each other is better. This will result in better service, better results and better internal relations. Your people are an integral part of your brand and these results make communicating your brand values and aligning your employees to them more important than selling the brand on the outside. Are your external brand and internal brand aligned?
Company Insight: PSP Rare PSP Rare (www.psprare.co.uk) was founded in 2002 and has grown to 23 employees in the last 8 years and around £4million in revenue. PSP Rare considers itself a small, but perfectly formed content agency, where they commission, create and design editorial content for magazines, websites, SEO, digital PR and social networking for a broad range of clients in the charity, consumer, business to business and government sectors. They have worked for clients as diverse as Somerfield Stores, Kia Motors, British Heart Foundation, The Royal Society, UK Trade and Investment, Training and Development Agency for Schools and Adobe. Grahame Lake, PSP Rare’s Managing Director, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Grahame about what his proudest moment in business was, he gave us this answer: “I’m still proud and touched by the number of ex-employees of my previous business who have upped sticks and joined me in a small, new and risky business”. Grahame also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Excellence made easy. Excellent products backed by first class process and planning that make the production and delivery of the product easy for the client.
2. Become the go-to people. Experienced and motivated front line staff who understand that the client is often under pressure. That means we are flexible, go the extra yard and do not levy punitive charges if everything hasn’t gone to plan. It means we are often the first call when the client needs a short term quick fix. 3. Increase the switching costs. Do something that is low revenue, constant but difficult to replace for the clients. Make them always think twice about how difficult it will be to replace us. 4. The management is part of the team. We have no offices, no visible perks from the rest of the team. We work to ensure that the team is king and that all contribute and are measured by their contribution. We have a monthly meal together as a team, before which we brief everyone on developments in the company. We have very little information that is not shared. 5. It’s not about the money. Apart from a client whose expectations exceeded what their budget would allow, we have never lost a client to another agency in the history of the company. That is the measure of our success. We also have virtually zero staff turnover despite not being the best company in this market for salaries. 6. Don’t take integration of new recruits for granted. We have made one major recruitment mistake. This was largely our fault as we underestimated the fact that we take so much for granted. The individual found it difficult to multi task the way we take for granted. Our need is to improve the process and integrate new employees more slowly and in a more formal way. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Social media’s impact means that marketing is becoming whole business and employee engagement is key
Traditionally, marketing has tended to be the domain of the marketing team but it seems that with the advent and growth of social media, marketing, branding and customer service has now become a whole company issue. Recent articles about the impact of social media and how it should be managed talk about educating and informing the team about social media and the company’s policy on social media. However, if a company wants to outperform its competitors and amaze its customers, I would suggest that education and information is not enough. If you are expecting your team to live and breathe this stuff, it has to start with engagement and values, right?
Yes, it needs to be guided by policy but it has to be felt too if it is not to become robotic. How engaged are your team members? Engaged enough to be let loose on social media? Is their level of engagement the thing that may be holding you back from exploring the new, exciting world of social media? According to survey results from Gallup, a global behavioural research company, a firm’s employee engagement ratio is a macrolevel indicator of an organization’s ‘health’. • In average organizations, the ratio of engaged to actively disengaged employees is 1.5:1. • In world-class organizations, the ratio of engaged to actively disengaged employees is near 8:1. Where would you put yourself on this scale? Further research by Gallup found that the team members in many companies were: • Only 17% are actively ‘engaged’. • 63% aren’t engaged. • 20% are actively ‘disengaged’. • 88% want to work hard and do their best. • 50% worked just hard enough to avoid being fired! • 75% believe they could be significantly more productive.
They also found that the benefits of an engaged team: • 50% more likely to have lower staff turnover. • 56% more likely to have higher than average customer loyalty. • 38% more likely to have above average productivity. • 27% more likely to report higher productivity. It seems straightforward that before embarking on new marketing efforts that utilise social media tools, team and business leaders should be asking how aligned and engaged their team is. Taking time to find out and build a higher level of engagement, trust and teamwork should help you manage the risks and benefit from the upsides of social media. How ‘engaged’ are your team members? What could you do to increase engagement in your team and business?
Hurray, it’s Monday!
How often do you hear your team members say, “Hurray, it’s Monday!” Not too often, I’ll bet. I was talking about this and how team relations can be enhanced, with an associate of mine recently. We spend a large part of our lives at work, so why not make it a place where people look forward to coming to, especially on Monday! We were discussing a few ideas that are often overlooked or dismissed as being too simplistic such as asking team members what they would appreciate (their wishlist) to enhance their work environment. You’ll be surprised by how little they really want.
I’m not talking about things that will incur large expense, but instead things that can be covered by petty cash for most organisations. It could be Danish pastries for your weekly team meetings, better coffee or tea, regular social events where the company buys the first drink, etc. It seems to me that when you provide an environment that encourages, promotes and nurtures a “friendly, warm and caring work place”, business and life will become more pleasant for everyone with the result that productivity, morale and the bottom line improves. Usually, it’s the smallest things that can carry the most weight. If you’re worried about the financial implications of this or that you haven’t budgeted for it, ask yourself if you’ve budgeted for a 10% decrease in productivity, when people call in sick or decide to move on to a company where they do support their people. We are all “social animals’ who perform best when we feel we are being appreciated and enjoy the people we work with. Make the workplace an environment where everyone wins! What small changes could you make to improve morale and your business’ internal environment?
Company Insight: Zone After launching the Manchester United magazine in 1993, which went on to become the biggest selling sports magazine in the UK, James Freedman, founded Zone (www.zonecontent.com) in 2000. The company has grown to around 65 employees over the last 13 years. Zone is a full-service digital agency with more than 10 years’ experience working with major media, entertainment and retail brands. They have worked with a range of brands from 19 Management and The Spice Girls to Channel 5, Channel 4 and Film4 (the first multi-channel subscription channel from a mainstream broadcaster). James Freedman, Zone’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked James about what his proudest moment in business was, he gave us a simple answer: “I’m most proud of the long-term partnerships that we have with clients particularly the 10+ year relationship that we have with Channel 4”. James also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Honesty and straightforwardness. Having the confidence to say what we think and not what the client wants to hear has stood us in great stead with clients and has allowed us to build and maintain long-standing relationships.
2. What is going to make them successful? Understanding the client’s key drivers for business success is key to delivering a successful project and client satisfaction and repeat business. 3. Give your people the opportunity to take responsibility. We give people lots of trust and respect and loads of opportunities for responsibility. Ours is a very entrepreneurial company and if a team member wants to step up and take responsibility for something in order to make it happen then that is the way to thrive in this company. As a result, we hold onto staff and clients for a long time. 4. Trust your instincts when hiring. Sometimes people interview well but don’t have the right attitude. We know within the first week or not if someone will work out and fit in. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Belief as a driver for business growth and success
I recently read an interview with Theo Paphitis, one of the dragons on the BBC’s Dragons’ Den and a top UK entrepreneur on Exec Digital, a business publisher. He was discussing his views on the entrepreneurial spirit, the prospects for business growth and success in the UK at the moment. In the interview, he said: “There’s no getting away from it, times are tough right now, but I don’t believe that’s a reason to be downhearted.”
He then went on to say: “It’s the “I WILL SUCCEED” attitude that marks out the best entrepreneurs and allows them to take advantage of any situation, any economic environment and any idea. In fact, now is a great time to start a business, because tough times build tough businesses,” he says. “If you can make it now, you will thrive when things get better. And, despite what some say, Britain is a great place to be. We’re a nation of entrepreneurs and it makes me proud to be among their ranks. There are an incredible 10,000 businesses starting up in Britain every single week. It shows what an excellent pool of entrepreneurial talent we have in this country.” I complete agree with him. Times may be tough but there are a huge number of opportunities out there and our thoughts and beliefs whether individual or corporate have a huge effect on our ability to succeed. Whether you want to succeed in a chosen endeavour or business or job or motivate others to help you achieve your own or shared goals, much of your (collective and individual) success is down to whether or not you believe you can do it. This was beautifully captured in this poem by Walter D. Wintle, a poet who lived in the late 19th and early 20th century.
The poem is known by two names: Thinking or The Man Who Thinks He Can. If you think you’re beaten, you are; If you think you dare not, you don’t! If you’d like to win, but think you can’t, It’s almost a cinch you won’t. If you think you’ll lose, you’re lost; For out in the world we find Success begins with a fellow’s will; It’s all in the state of mind! If you think you’re outclassed, you are; You’ve got to think high to rise. You’ve got to be sure of yourself Before you can win the prize. Life’s battles don’t always go To the strongest or fastest man; But sooner or later the man who wins Is the man who thinks he can! - Walter D. Wintle I think Theo would approve of the poem, don’t you? What successes have you and your team found that have come about as a result of just believing that you would be successful? Or, if you haven’t been successful in your endeavours, what are you doing to build belief in yourself and your team?
You can’t afford not to train your people
Have you heard this before? “Why would we train people in new skills when they will use them to get a job elsewhere?” Now, take a moment to think about what this is really saying.
It seems to me that it is saying a number of things: • We don’t believe that our people will stay so we are not willing to invest in them. • We don’t believe in our people. • The environment that we create in our business is not conducive to keeping employees. Harsh perhaps, but true. Now, think about this. What is the cost of not training them? High turnover, low productivity, lack of engagement and certainly, they’re unlikely to develop the skills required to help your business grow. Result: they’ll leave anyway, and probably for a company who will offer them training. Training isn’t an employee perk. If anything, it should be seen as an essential offering for an employer. Think of your employees as customers and ask yourself: - Where is the value added from me to my employees? - Why would they choose us over anyone else? - How can we help them? Nor does training have to be expensive. It can be done in-house and it doesn’t need to be done with a whiteboard, handouts and flipcharts. What it needs is a little time, creativity and planning. One of the best ideas that I’ve come across was where a company set up a series of book clubs for employee and management development. Simple concept where the company buys the books and people take turns in facilitating the discussions.
All sorts of development takes place in those groups: practice chairing meetings, public speaking skills, new learning from the source materials, innovative ideas that can be applied to the core business, team building, improved communications across your organisation, networking... The fact is that people like to be given proper training. It gives them a feeling of personal development, which motivates them and helps them to do their job better. So, if your firm does not have a training plan then get busy and, don’t forget, ask your team what they want. What could you do to start investing in your people and provide them with the training and skills that they need?
Company Insight: Europa Communications Europa Communications (www.europa.co.uk) was formed in 1994. EUROPA provides outsourced business development and marketing services to technology companies, ranging from the world’s largest to the smallest start-up ventures, in the UK and internationally. Europa operates a team of skilled sales developers working either from their homes around the globe, from Europa’s offices, or from those of its clients. This is not a typical call-centre approach; it is more about understanding clients’ objectives and using their highly trained staff to build relationships with the clients’ marketplaces. People quality and close account management are key to their strategy. Now with around 50 employees, Europa and has shown continuous, revenuefunded growth since its formation. Alan Haley, Europa’s founder and CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Alan about what his proudest moment in business was, he gave us a simple answer: “I’m really proud every time I can sit in on a conference call or meeting with a client and just listen to my team doing a great job without me!”. Alan also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Be honest. Clients respect and trust our honesty in everything we do. We also will not accept business that we don’t think will work.
2. Know your market. Our strategy is to offer our clients real market expertise. This way we know we can always add value. 3. Focus. We focus on one market, the IT/Telco sector. This gives us a depth of knowledge and an understanding that clients expect. 4. Minimise risk. A lot of what we do is certainly to minimise the risk of campaign failure by proceeding incrementally, testing market reaction as we go, and modifying approach, messaging, sales skills, etc as we find out more from the market. A critical part of this is also to do with being embedded with the client’s salesforce and marketing team. This linkage increases ROI dramatically. 5. Build and invest in your team as people. In order to build a great team, we have lots of internal development initiatives, knowledge sharing and coaching. The end result is that we have very low staff turnover which gives us great continuity. This is counter to normal trends in our industry. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Leadership
10 things you can do to foster a culture of innovation and creativity
Innovation and creativity are at the heart of all high-growth teams and businesses. Here is a list of things that you can do to check whether you are getting the full benefit from the resources around you: 1. Live with many possibilities. Every problem has many possible solutions. Believe in the idea that you and your team can find a better way to do anything you put your minds to‌ and you will. 2. Always question what you do and why you do it. Business, people and environments change. All too often, tasks and projects creep into our way of doing things that are not aligned with our mission, purpose and goals. Frequently check that everything you do is in alignment and produces the results intended.
3. Challenge long-held beliefs. Just because something’s always been done a certain way doesn’t mean that it’s still the best way. As Aristotle said: ‘All persons ought to endeavor to follow what is right, and not what is established’. 4. Don’t accept the first solution right away. There are many possible solutions to every problem. Most people go with the first plausible one that comes up and they miss the value of thinking longer and finding more effective and elegant answers. 5. Learn. You can’t learn less. The more you know about something, the more you find you DON’T know. By adding to your knowledge base, you find more and more associations. And making associations is where seemingly magical things happen. 6. Have fun. Coming up with ideas on how to do things faster, easier, with fewer resources really is fun. And things that are fun to do get done more often. Schedule regular brainstorming sessions and practice green-light thinking. Order sandwiches or pizza for lunch and focus on a problem or process and generate as many ideas as you can. 7. Get out and about. By stepping out of your familiar territory, you open the door to new and different viewpoints you can use to your advantage. 8. Challenge your team to look deeper. When Henry Ford asked his engineers to design the V-8 engine, they said it couldn’t be done. He said it WILL be done, and eventually, they did it. 9. Make sure you have adequate ‘thinking’ time - time to do nothing. When we’re constantly engaged in DOING things, we don’t provide the fertile ground for ideas to take root.
10. Change your subconscious. Give your mind something to work on while you sleep. Select a problem you want solved, a process you would like improved or a new product you would like to create before going to bed and then forget about it. Tell yourself you want at least three elegant ideas by the next day and then expect to receive them. Trust that it works. How many of the above are you doing routinely in your business? How could you apply some of these in your business to boost innovation and creativity?
Company Insight: Weboptimiser Founded in 1996 as an SEO company, Weboptimiser (www.weboptimiser.com) specialises in Successful Online Marketing including search engine optimisation (SEO), pay per click (PPC) Social Media services. Weboptimiser has become one of the Internet marketing sector’s best-known and most respected online cross media optimisation companies. They have worked with a range of brands including Virgin Money, First Capital Connect, Thorntons, Ipsos, Universal and Stanley Gibbons. Conrad Swailes, Weboptimiser’s CEO, shared some insights about what has made his latest business so successful in retaining customers, building a great team, and driving repeat business and growth. When we asked Conrad about what his proudest moment in business was, he told us: “I’m really proud every time we receive a testimonial from a client that we have helped to grow their business”. Conrad also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Lead your industry. Thought leadership and innovation in a fast evolving industry for us has been key. My partner David White and myself drive this forward both technically and commercially. More importantly is consistency in this position and the delivery of service and products that achieve a client’s Return on Investment (RoI) objectives.
2. Clients benefit. Being ahead of our competition means that our customers are ahead of theirs and we share in the success together. 3. Pick the marketing and sales strategies that fit your business. For a while, we relied too much on traditional sales channels and sales people rather than search and social media which we do best. Social media is referral media which is really what generates the best business. 4. Be prepared to lead from the front. I make sure that I can do everything that anyone who works for me can do, so that when it gets tough there are no excuses and I can lead by example. 5. Evolve your client relationships. We keep our clients for a longtime as we upgrade them to new opportunities as new channels emerge and evolve so that we grow together. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Looking for value?
“It’s unwise to pay too much but it’s unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do. The common law of business balance prohibits paying a little and getting a lot. It can’t be done. If you deal with the lowest bidder, it’s well to add something for the risk you run. And if you do that, you will have enough to pay for something better!” JOHN RUSKIN (1819-1900)
I thought I’d share this piece of wisdom from John Ruskin. There is so much wisdom in this quote, whether you are a consumer or a business purchasing goods from its suppliers, and is as true now as it was back in the time of Ruskin. Now, I am not saying that finding something that is cheap or inexpensive is not good. After all, what is finding a bargain? Is it not finding something at a cheaper price than you would otherwise be willing to pay? So you save money. Fantastic. However, in the normal course of events bargains don’t exist in all areas at all times when we are looking for them. So, if we are not getting what we want, i.e. value, from the thing(s) that we are buying then there is something wrong. If we’re not getting the value we want then we need to ask ourselves if we are getting caught in Ruskin’s ‘lowest bidder’ scenario. Even in tough economic times when every cost has to be watched, rather than just focus on costs and prices alone, perhaps, as leaders we should be stepping back to look at the complete value picture. For example, if we put the cheapest inputs into our system, can we seriously expect to generate outputs of the highest value. I think that’s called Alchemy, right? When we look at the whole value picture, this needs to include: • What we pay our staff. • The type of training that we provide for them. • The way that we treat our customers. • The inputs that we use for our business.
If price is a real driver for you and your business ask yourself this: • What are you getting and what are you paying for? • Are you getting the value that you are looking for? • If not, where does the problem lie?
Boldness has genius, power, and magic in it
Whilst training at the climbing wall with friends, we were working on a particular problem and it reminded me of the following quote: â€œâ€Śbut when I said that nothing had been done I erred in one important matter. We had definitely committed ourselves and were halfway out of our ruts. We had put down our passage money - booked a sailing to Bombay. This may sound too simple, but is great in consequence. Until one is committed, there is hesitancy, the chance to draw back, always ineffectiveness. Concerning all acts of initiative (and creation), there is one elementary truth the ignorance of
which kills countless ideas and splendid plans: that the moment one definitely commits oneself, then providence moves too. A whole stream of events issues from the decision, raising in one’s favor all manner of unforeseen incidents, meetings and material assistance, which no man could have dreamt would have come his way. I learned a deep respect for one of Goethe’s couplets: Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it!” W.H. Murray, from The Scottish Himalayan Expedition (1951) Now, commitment does have its risks but what I take from this, and believe we can use in both our personal and business lives, is this: • Delaying decisions or commitment never answered or created anything. • Until you commit, no-one else will. • Delaying your commitment denies other people the opportunity to help. • When you commit, it is marvellous to see how people will conspire to help you. As a leader, what have you been delaying or not committing to lately?
Company Insight: Norman Broadbent Founded in 1982, Norman Broadbent (www.normanbroadbent. com) has a reputation for being the “thinking person’s search firm”. Norman Broadbent Plc was created as the result of a reverse takeover of a listed plc in 1998 by Garner International. Norman Broadbent is one of the largest providers of board level executive search, interim and leadership consultancy services in the UK with a team of more than 60 consultants worldwide. Sue O’Brien, Norman Broadbent’s CEO, shared some insights about what has made her business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Sue about what her proudest moment in business was, she told us it has come since she was part of the team that acquired Norman Broadbent in December 2008, steered it through some tough times and achieved all that they set out to do (15 months on). They re-established the Norman Broadbent brand, returning the business to profit and have recently attracted £2million new investment from City luminaries Pierce Casey and Jon Moulton. Sue also shared some insights on what she believes they do that has helped them build a truly customer-focused business and team. Here are some of her insights: 1. Honesty builds payback. Honest relationships with our customers has resulted in payback for everyone. 2. Focus on the relationship not the money. Our relationships are not about revenue, they are about being a trusted advisor. It is about getting to know the person when they have a need and we have advice.
3. More than a transaction. Our relationships are primarily not transactional, they are trust and ideas based. Given that, clients come to us for really honest, objective and out-of-the-box thinking. 4. Don’t sell. We aim to be completely solution based and not products/services oriented. First, we listen, think and then advise. 5. Customers sometimes want to simply transact. Hiring someone without Emotional Intelligence (EQ) is a big mistake in a consultancy based business. First and foremost, recognise what clients need and what is appropriate. If they just want to transact, don’t take it personally. 6. Communicate with all people at all levels in the same way. By showing people respect in how and what we communicate means that we create brand advocates at all levels of the organisation. 7. It’s not our culture, it’s theirs. Our team created our brand values and is rewarded by adherence to them. 10% of their bonus is linked to our values and culture. This has had a huge payoff: client retention in 2009 was 90% and repeat business was 96%. This has created a positive feedback loop by creating lots of referrals. 8. Everyone an owner. Our philosophy is that every employee is a shareholder. The firm is 31% owned by its employees. When employees are owners too they act and think like owners. 9. Always hire on value alignment. Hire on value alignment not on revenue targets. Trust your instincts and don’t be pressured or impressed by the numbers. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Continuous innovation - the only way to stay ahead of your competitors
If we look back over the last couple of decades, what we have learnt is that the speed of change seems to be accelerating. The implication for business is that the only way businesses today, large and small, are going to survive and thrive is through acceptance and continuous innovation in the face of this change. Whether you are a large corporation or an independent professional, your business needs to stay ahead of its competition... or suffer. Ask yourself if you’ve done any of the following in the past six months: 1. Reviewed, improved or refined your marketing messages. 2. Developed one or more competitive new services.
3. Expanded or developed your ability to connect and converse with your current clients and customers. 4. Discovered new ways to connect with prospective clients. 5. Developed or improved your web presence. 6. Partnered with other business owners to multiply your reach. You see, business, like nature, is very simple. If you’re not growing, you’re dying. You can’t afford to remain stagnant and hope to compete in today’s economy. However, despite this constant change, many businesses are doing great. And the fact that they are doing great is not down to luck. No, it’s because they have adapted to their marketplace and environment and are continuously innovating. And it isn’t a one-time flash-inthe-pan. It’s simply the way they do business these days. They’re taking consistent, effective action to become known as the leaders in their particular fields. If you are waiting around for something to change in your favour, you’re going to be very disappointed with your results. What extra could you be doing to help your team continuously innovate to keep you ahead of your competition and improve relations with your customers?
Make change happen – pushing through resistance
Whether you have tried to make some changes in your own life or in your organisation, you will probably have heard of some, if not all, of these reasons and statistics about change: • You can lead a horse to water but you can’t make it drink. • Two-thirds of all organisational change programmes fail. • 95% of all personal development initiatives have no enduring effect after 3 months.
Why? The reasons for failure and resistance to change are many and include: • Fear of failure, the unknown, personal cost, loss of control... • Habits can be hard to break. • That doesn’t make sense to ME. • Unwillingness to learn and adapt. • Lack of trust. • It’s our future as well and nobody asked us our opinion. • The failures and successes of history. Here’s a method I learnt some years ago to implement change in both a business and personal context. It works and can really help identify where the obstacles to real and sustainable change lie. The formula for change (see below) was created by Bleckhard and Gleicher, and later simplified by Dannemiller. All three are organisational development giants in their field. It is typically used when a business is faced with changing circumstances and needs to identify the need for change, the future goal and how change is to be implemented. This is equally useful when applied to individual employees, leaders or personal circumstances when planning a personal development change. D x V x F > R In the model: • The D represents Dissatisfaction – the need to identify clearly why staying where we are is not acceptable.
• The V represents the Vision of the change – the compelling vision (business or personal) that you are looking to achieve. In developing your vision, it may be helpful to think about via the 5P’s (Purpose: why do we have to do this; Picture: what will it look like when we arrive; Plan: what’s our step by step plan of how we will get there; Performance: how will we keep score so we know if we are winning; and Part: if there is more than one person involved, what is my role and the role others need to play in order to move the process forward). • The F represents the First Steps needed in order to get the change moving – like in so many things it is the first steps of the plan that are the most important as they are the ones that break with the old inertia and generate the momentum that is needed to make the planned change sustainable. • The R represents Resistance to Change – this could one of or all of the reasons that were mentioned above. The key points of this model are the relationships between D, V and F. They are multiplied together, and together they need to be greater than R for change to happen. The interesting thing here is the mathematical truth in the model: If D or V or F are zero then the left side of the relation will be zero and, therefore, there will be no change. Have you been struggling to implement a new strategy or change initiative in your business? If you have tried to change something in the past, does this model help you identify where you might have gone wrong or what you may have missed in your change process? How could you use this formula to help you implement new initiatives?
Company Insight: Brandhouse Brandhouse (www.brandhouse.co.uk), founded in 1989, is the UK’s first Brand Agency - a brand consultancy and design agency. With its 30 employees, they help clients use emotion to build stronger and more profitable brands by getting inside a brand’s consumers’ hearts and minds and finding creative ways to embrace those emotions so they will embrace the brand. In 2009, Brandhouse published The Brandhouse Emotion 100, the first ever study of the emotional landscape of the UK’s leading brands. Crispin Reed, Brandhouse’s Managing Director, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Crispin about what his proudest moment in business was, he gave us two answers. Firstly, when a member of staff complimented the Board on steering the company successfully through the recession and, secondly, investing in the development of a high performance team. Crispin also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Consistently deliver quality
2. Attention, attention, attention! Pay attention to your clients and your people – attention is the greatest currency in a time-starved environment. In every interaction, both internally and externally, we strive to treat it as the most important conversation we are having that month! Attention is the new luxury! 3. Don’t stop thinking about them. Always be looking for ways to surprise and delight your clients. 4. Great people = great quality. Fundamentally because of the quality of the people who are charged to deliver this. Having a high-performance team is critical. 5. Know what you are about and where you are going. Having a clear vision is crucial for positioning with clients and recruiting and keeping the right team members. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Are you a creative or a reactive leader?
A good leader always seems to be the one that can find or facilitate the solution to a persistent problem and tends to be more creative in their thinking rather than reactive. In business, they anticipate future demands and trends, and make new products or tailor the ones they already have to suit that future. We live in an ever and rapidly changing world. That’s why it’s more important than ever, as leaders, to take the time to understand how these changes will affect your business, your team and your life, and to establish ways to take full advantage of those changes. In order to grow yourself and your team, and to drive your business forward, you’ve got to become much better at starting things, solving the difficult problems and at making things new, or making new things.
Still not convinced? In a 2002 article in Fast Company magazine (The Secret Life of the CEO: Is the economy just built to flip?), Jim Collins (author of Good to Great) wrote that the best leaders don’t focus as much on beating the competition as they do on making their own products and services better than they were before. As true then as it is now. Creative business leaders are always asking themselves the following questions: • What do potential customers really need, now? • What worries them? • What causes them pain? • What would they be eager to buy? • How can I make our current customers happier? • How can we make the products we sell better? • How can we make the products we sell more useful? • How can we make the products we sell more valuable? Do you ask yourself these questions? Regularly? And if you do, do you come up with not just good, but GREAT answers? Answers that can really advance your business? Test your creative skills against the following checklist. Are you: • Internally driven? • Focused on the work, not politics? • Goal-oriented, rather than crisis-centered? • A good relationship builder?
• Making full use of your strongest talents? • Setting aggressive long-term goals? The above are all characteristics of creative leaders. Here are the traits of reactive leaders. They generally: • Are motivated by external factors like money and power. • Are focused on corporate politics, not the work. • Allow their time to be dictated by what’s in their inbox. • Ignore their strongest talents in favour of good management. • Plan in one to five-year increments. • Believe nothing is sacred and relationships are expendable. How many of those reactive characteristics apply to you? How would you grade yourself? The best leaders are indeed long-term oriented, people-friendly, loyal, eager to provide better products and services, and are unconcerned about where they stand in just about any pecking order, either within their industry or within their business. Now, I am not saying that we can all be perfect all of the time or that a perfectly creative leader exists. What I am saying is that the more that we increase our awareness of who we are and are aware of the opportunity cost of any of our behaviour that is reactive, then the easier it will be to nurture the creative leader in us all. How would you rate yourself? Are you creative or reactive?
Why learning is important for leaders
One of the keys that all successful businesses have at their heart is that they all actively learn. To promote innovation and flexibility in your business so that you are well equipped to face change and grow, even in challenging market conditions, you’ll need to encourage and develop a culture where learning is recognised, appreciated and rewarded. Ever come across that idea that says “work harder on yourself than you do on your job”? This comes from the author Jim Rohn and it is what his mentor told him when Rohn was faced with the prospect of growing his own business. What Rohn’s mentor meant was that we must grow ourselves as leaders, our people and then our business, in that order, if we want to foster long-term, sustainable growth. Therefore, if you want to promote learning and then growth, the best way is to lead by example. As my Dad always used to say when he was in management: “Never ask people to do things that you are not prepared to do yourself.”
In other words, demonstrate to your employees that you enjoy learning new skills yourself, share with them what you are learning and it’ll start to rub off on them. This may not be as simple as it sounds. Here are three tips to becoming a better learner: 1. Be excited, not threatened, by new ideas. Leaders who are threatened by innovation undermine their position and ability to see new ideas and engage with those around them. 2. Recognize your personal prejudices and admit them to others. Biases in business are often suffocating and can blind one to opportunities. This can mean that blinkered leaders spend too much time and money on far-fetched or risky concepts. 3. Remain humble. We will never know it all and it will all change tomorrow. Knowledge is temporary and is ever changing therefore staying open and humble will allow you to build a foundation of support in your organisation that’ll help you cope with change and competitive market conditions. Developing yourself through new learning, whether hard skills or soft skills, is a great way of building capability in yourself and your team. Do this and you will lead your team to do the same and see rewards through sales, productivity, strategy, customer service, account management and a host of other areas. What could you be taking the lead on learning in your business?
Company Insight: Wellers Accountants With a track record of over 50 years, Wellers Accountants (www. wellersaccountants.co.uk) is a boutique financial/accountancy firm that has 15 partners, 100 staff in 4 offices (London, Oxford, Banbury, Thame) representing 2,500 business clients. Wellers provides what it calls ‘Business Oxygen’to its clients - not simply number crunching, but real partnering and mentoring to help its clients reach their objectives. With a proven track record of more than fifty years working with Small and Medium sized Enterprises (SMEs), they know how to add tangible value to a client’s business. They are not a 9 to 5 office; their clients have continuous access to the partner that is working with their business. It’s an approach they think is a breath of fresh air amongst their peers. Neil Beck, the partnership’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Neil about what his proudest moment in business was, he told us it was successfully managing the exit of 4 partners from the firm and helping them set up on their own as they were no longer aligned with Wellers’ values. Neil also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. More than nice people. Being nice people is essential but is not enough. We’re not stereotypical accountants. We work with people to help them achieve what they want to achieve.
Our ethos is not about just accountancy; we see ourselves as more than that - partners in business. 2. Be proactive. We are always thinking about who we can introduce our clients to from our own client base and our network. 3. Pay attention to client relationships. Some don’t want extra so listen and pay attention. 4. Team building is never finished. We build our team by having a solid 3 day induction programme and six-monthly, ongoing team workshops with full firm involvement. These are values and vision based and include practical client management review sessions. 5. Being different pays dividends. Our ‘Business Oxygen’ approach is now 5 years old and we have benefited in two ways: One, some people have left as they were not aligned with the new values and, two, we have been able to increase the quality of the talent we have attracted and recruited. 6. More referrals. Client retention has never been a problem for us but our more formal approach has allowed us to ask for more referrals. 70% of our new business comes from referrals but that rises the more time we spend with clients. 7. Don’t take too much for granted. The change to our way of working has run smoothly but we have learnt not to assume that changes will be understood straight away and that consistency is key to embedding this change. This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
When times are tough here are eight ways to get more out of what you’ve got, your team, hit your targets and still grow your business
There are times when economic conditions take on a more challenging complexion. In those times, as a leader, you may find yourself having to deal with redundancies, heavier workloads, budget cuts and an uncertain future. How on earth are you supposed to get more out of the resources to hand, inspire your team, hit your targets and still keep your job or company going? Here is some advice from our experience of working with CEOs and entrepreneurs within companies of all sizes:
1. Stay focused. To get through any downturn or challenging economic times, rather than turning down the ‘intensity’ of planning, Directors and CEOs need to step up the “intensity” with which they manage. For instance, they should shred annual budgets and instead set targets on a quarterly or monthly basis. This will help keep them and their team keenly focused on the ‘right’ things to do. 2. Be decisive. Even if you have to tell employees that aspects of your plan will not be pretty and will involve staff and budget cuts, it’s essential you let them know your strategy. 3. Be transparent and honest. Even if the plan includes difficult parts, give your team as much information as possible along the way. This will go a long way towards preventing disaffected staff from jumping ship early. 4. Err on the side of too much information. When in doubt, over communicate. Rumours can be more damaging than bad news. In the absence of information, people make stuff up. Managers always tend not to want to give specifics, especially about cuts and redundancies. But information is an important part of getting people to understand and accept what’s happened. As a leader, you have to err on the side of giving more, rather than less, information. In turn, leaders must remember how important it is to share information when the news starts improving. 5. Treat employees with respect. When companies hit rough waters and their workers get distracted, managers can find themselves chiding employees and ordering them to stay focused. But just telling people to get back to work is not treating them with respect. Instead, reassure them that you understand their concerns and that you’ll be sharing as much information as possible.
6. Take care of your remaining staff. Often in hard times, leaders and companies can tend to focus only on those that are being made redundant and lose sight of the remaining team members. These team members are the future of the company and leaders need to make sure that they know how critical their work is and what they should be focusing on in the future. 7. Empathize. The people who work for you want to know that you feel their pain. Tell them you realize how distracted they are by all the bad news going around, what they read in the papers, hear on the news and offer to do whatever you can to help them focus. It’s also important, during hard times, for bosses themselves to show sacrifice, whether it’s giving up a bonus, taking a pay cut, or relinquishing other privileges. Sharing in your employees’ pain helps earn their trust. It’s critically important, if the messenger is to be credible. What not to do: tell employees they should feel good when they have every reason to feel bad. During a trying time you have to let people know you’re still human. 8. Develop a culture of optimism. However, whilst leaders need to be open and honest with their teams it is essential that they also build a sense of optimism in their firm as they look to the future. By optimism, we don’t mean ‘the glass is half full’ kind, but optimism as a strategy – as a way of dealing with difficulties and sensing opportunities. Successful leaders look on the brighter side of life and sense opportunities even in the face of adversity. They are resilient, can see the big picture and where they are going, and are able to focus on the possibilities of what can be achieved. Their teams will look to them too, in these times, for inspiration and guidance. Is your company facing a challenging time, how many of the above are you doing and how many are you not doing? What else could you be doing to help your team and your business hit targets?
Open or closed book?
I’m a great believer in openness, transparency and honesty with the people that I know and trust. I also believe that being that way builds trust, understanding and intimacy. However, when you get other people involved in your life, one added benefit is that it also builds a whole army of potential helpers. People who are more than happy to help you achieve your dreams and goals. This can be a great leadership strategy when running a business or managing a team. Involving your team, colleagues and peers in how things are going, what they think needs to happen, asking for suggestions or new ideas and where you could use some help, can produce some fantastic improvements in results, engagement, motivation and productivity.
Some entrepreneurs and business executives find this leadership style difficult for all sorts of reasons including: • Time • Pride • Politics • Ego... If one of those reasons, or any other, is stopping you from involving and engaging the people in your business and asking for their help then you are potentially missing out on a huge opportunity. One of my clients developed a more open-book approach to their business. In a tough operating environment, their business “saw a sales increase of 48% in the first half of the financial year with a more unified and focused team”. They learnt that by adopting a more open-book style of leadership and management that they could better engage their team, more directly influence their behaviour, encourage them to take ownership of business issues and thus, drive growth. How could you be more open with the people in your business?
Company Insight: Foviance Foviance (www.foviance.com) started life in 2001 as The Usability Company and became Foviance following a merger with Web Abacus. In 2008, Foviance acquired Applied Insights to become the UK’s pre-eminent customer experience consultancy, offering the full range of user experience consulting services. They are independent and often work alongside design agencies. Foviance helps business drive business performance by improving their approach toward customer experience. They do this by providing consultancy underpinned with strong qualitative user research, experience design, data analytics and customer insight capabilities. Paul Blunden, Foviance’s CEO, shared some insights about what has made his business so successful in retaining customers, building a great team and driving repeat business and growth. When we asked Paul about what his proudest moment in business was, he said it comes every month at their company meeting when he gets to read out recognition from staff members and clients about people in their team. Paul also shared some insights on what he believes they do that has helped them build a truly customer-focused business and team. Here are some of his insights: 1. Focus on the long term relationship. We avoid short term financial gain in favour of a longer term relationship. This has built very strong relationships with our clients based on trust and high quality deliverables.
2. Strong relationships with clients allow you to test new ideas. We still work with customers we won in 2001 when we founded the company. In fact , four of our top five clients have been with us more than 6 years and 3 of those have been with us for more than 8 years. These clients have also been a proving ground for new ideas and allowed us to try things out and provide us with honest feedback. 3. Don’t take your culture for granted. We didn’t focus on the culture until we were about 5 years old. We trusted that it was taking care of itself and it wasn’t. We now recognize that the company’s culture is something you have to work on constantly like any other area of business. 4. Building your culture starts at induction and never ends. We have a core value of candour and talk about it constantly from induction onwards and we live and breath it even pulling people up for being “political” but in a nice way. We also have a monthly company meeting where we all get together and talk about our successes and share new ideas. 5. Values are linked to performance appraisals. We also published the companies values (having worked them up with staff) and make them part of the performance and appraisal system. It is not good enough to achieve targets or deliver good work alone, we now look at how that work was done (looking at the underlying behaviours). This is another great example of an established business that is leading its industry, empowering its team and delivering value for its customers. Can you learn anything from their approach?
Eight common errors why organisations fail to change
Here’s a list of eight common mistakes that organisations make that cause their change initiatives to fail: 1. Lack of a sense of urgency. Without a clear sense of urgency or a real reason ‘why’ change should happen, organisations can fail to generate the momentum they need to see change through. 2. Failing to create a sufficiently powerful and guiding team. Whilst, many of the top managers may ‘get’ the need for change, if all employees don’t ‘get’ the need then change initiatives can be doomed to fail before they have even started
3. Underestimating the power of vision. A sensible vision helps direct, align, and inspire actions on the part of large numbers of people. No vision leads to lots of debate. 4. Under-communicating the vision. Lots of communication is necessary to capture employee hearts and minds. 5. Permitting obstacles to block or derail the new vision. Obstacles or difficulties associated with change are a fact but they need to be confronted and overcome so that you can succeed. There are so many skeletons of initiatives by the side of the road to change because they were stopped in their tracks by obstacles. If the need is great enough you and your team have to find a way to overcome them. 6. Failing to create short term wins. Change is hard, so to keep up the momentum, focus on generating some early wins in the process. This will have a positive effect on motivation and momentum. 7. Declaring victory too soon. This is a bit like changing or giving up a bad habit. If you relax too soon it’s really easy to sink back into your old ways. Real change takes time so give it time to sink in and permeate your organisation’s culture. Don’t underestimate how long this could take.
8. Neglecting to anchor changes firmly into the corporate culture. In order for change to be effective, it needs to become “the way we do things around here�, supported by policies, procedures, behaviours, routines etc. Efforts to effect change that are over-managed and under-led also tend to try to eliminate the inherent messiness of transformations. Eight stages are often reduced to three. Seven projects are reduced to two. Instead of involving many people, the initiative is handled by a small group. Real lasting change should never be underestimated or under-resourced. Have any of your change initiatives failed? If so, do you think that you fell victim to one of the reasons above? What would you do differently next time?
Is social media and the internet making Bennis’ predictions come true?
In the relatively old book, On Becoming a Leader, by Warren Bennis (first published in 1989), the author suggests that the next generation of leaders will have certain things in common: 1. Broad education. 2. Boundless curiosity. 3. Boundless enthusiasm. 4. Belief in people and teamwork. 5. Willingness to take risks. 6. Devotion to long-term growth not short-term profit. 7. Commitment to excellence. 8. Readiness. 9. Virtue. 10. Vision.
On re-reading this list, I was struck by number 6: Devotion to long-term growth not short-term profit Over the last twenty years, I am not sure that we have seen much evidence of this with many company leaders still very focused on short-term profit and customer acquisition, particularly in publicly traded companies. However, over the last few years in the face of the economic turmoil, the changing face of marketing from broadcast to permission/ conversation based, the rise in competition and the impact of social media, I believe that companies are being forced to change the way they do business. Or at least, to start to think about changing the way they do business to one of longer-term growth as the means of delivering short-term profits are being increasingly undermined. When Bennis first wrote his book, marketing used to be a lot easier. Companies found out where their customers lived, worked with an agency or an in-house team to create an eye-catching campaign and then bought lots of mass media space to push their message - broadcast style. Sales were generated and targets were met. But now, the rules have completely changed. I’m not saying that the traditional forms of advertising are not still very powerful. They undoubtedly are. But, they are becoming less and less effective whilst the Internet is becoming more and more significant in our lives and is changing the nature of how we interact with each other and companies.
The rise in social media is a generating a never-ending stream of interesting and innovative ways that businesses can reach and engage their customers. However, whilst the possibilities may be endless, the returns are not guaranteed and there is no new proven path. So, experiments and risk-taking will need to be encouraged if companies are to be able to define and tailor what works for them and their customers in this new world. Further, more change seems inevitable. Given the changing landscape and falling returns from traditional marketing, this all undermines a short-term focus and is demanding a shift to more longer term thinking focusing on customer retention and customer loyalty. I think leaders at all levels of companies are starting to realise this. Are you? What can you do to develop and nurture long-term, sustainable growth?
Thanks and Acknowledgements I am grateful to the following people for their inspiration, input, comments and support through this project: Crispin Reed of Brandhouse Jim Prior of The Partners James Freedman of Zone Alison Fydler of Firefish Sue O’Brien of Norman Broadbent David Chapple of Bostock and Pollitt Andrew Beale of Beales Hotels Conrad Swailes of Weboptimiser Henry Stewart of Happy Stephen Waddington & Steve Earl of Speed Communications Alan Haley of Europa Communications Grahame Lake of PSP Rare Publishing Justin Cooke of Fortune Cookie Neil Beck of Wellers Accountants Paul Blunden of Foviance Stefan Töpfer of Winweb Eleanor Edwards of GiveaBrick.com Christine Livingstone of adifferentkindofwork.com
Andre Sakai Salib Rei Sekine Roy Anstey of White Elephant Marketing Louis Downs Cori Padgett at Biggirlbranding.com Matthew Needham at BigRedTomatoCompany.co.uk Mike Cliffe-Jones at Mikeslife.org Chris C. Ducker at virtualbusinesslifestyle.com Jim Connolly at jimsmarketingblog.com Mike Southon Seth Godin Verne Harnish John Jantsch Michael Heppell Chris Brogan Fred Reichheld Tony Hsieh Ben Lumley at 6aliens.com Jo Stickings Mark Grant Wendy McCance Simon Hedley and of course Hana, Mum, Dad, Jan and Jason without you all of this would not have been possible
The RARE Process
The RARE process that we use is outlined below. The questions below each of the headings are some of the typical questions that we would seek to address in each stage. • Research • Where are you? • Where do you think you are? • Where do your customers think you are? • How do you compare with your competitors? • Can we test-drive your customer experience and tell you what we think? • Aim • Where do you want to be? • What is your strategy to create your RARE business? • Are there any limits that you need to take into account? • Roadmap • How will you get there from here? • What needs to be done with your customers, people and leadership in order to make this happen? • What other resources do you need? • Execute • What can we do to help you make that happen in terms of consultancy, project management, group and one to one training?
We, myself and my associates, work with clients on some or all of the following elements through a combination of research, hands-on consultancy, facilitation of thinking and implementation. I hope that from the book you will have been able to glean that our approach is straightforward, pragmatic and practical but that it also produces results and, in many cases, with a fantastic return on investment. If you would like to discuss how you could create a RARE business or any of the other ideas in the book then please drop me an email at adrian@rarebusiness.co.uk or take a look at the RARE Business site www.rarebusiness.co.uk Finally, why don’t you check out my blog: www.adrianswinscoe.com And connect with me on: LinkedIn: http://uk.linkedin.com/in/adrianswinscoe Twitter: @adrianswinscoe