Tag Archives: Customer

The Rule of Thirds

I know that I have high expectations compared to the “average consumer,” but that’s because I don’t tolerate excuses.

I know that a high level of customer experience can be achieved, every time, if the focus is put in the right places. The area, where focus is most often currently placed — profit — will take care of itself, if the customer experience is taken care of.

This is one of the reasons why I feel that I am more capable, beyond my years of experience, to run a company is because I my “big picture” focus is where companies need to be placing their effort. Effort should be placed equally in three areas of the business:

The Rule of Thirds

  • 1/3 on maintaining an excellent product quality.
  • 1/3 on amazing and memorable customer experiences.
  • 1/3 on constant innovation (thinking of ways to improve).

Rule of Thirds

If effort is placed equally on these three areas, businesses will result both in fantastic short-term success, but more importantly long-term customer loyalty and retention.

For those who feel that customer retention plays a relatively minor role in helping a company grow a healthy bottom line, here are a few statistics you might be interested in:

According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. 

And if those numbers don’t impress you, Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers. 

Still not sold on customer retention? One final statistic provided by Lee Resource Inc. should give you plenty to think about:

Attracting new customers will cost your company 5 times more than keeping an existing customer.

– Forbes.com

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Why Can’t a Tech Giant like Google Have Amazing Customer Experience?

Is a company like Google too large to make huge impacts on their customer service? I don’t think so…

Now, to be fair, when I complained that the iPhone App for Google+was no longer working, I did get a comment from +Vic Gundotra, who “plus-mentioned” someone else (I’m assuming the person responsible for the Google+ App for iPhone).

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The iPhone App has yet to be fixed, but I give Google major points that the person in charge of Google+ actually read my post and passed on the information to someone who may actually be able to do something about it…

I sent +Vic Gundotra  a private message about this, thanking him and offering up a suggestion, but I don’t know if he read it or not (he never responded, but he is a busy man), but it’s not private information. It is a deeply held belief of mine, so I don’t mind sharing my advice on this post…

Companies Make Mistakes

Shit happens. From my many years managing in the restaurant industry, I learned that no matter how “tight of a ship” you run, occasionally the ball is going to get dropped. At my restaurant, it might be a spilled drink tray or an undercooked piece of meat. For Google+, it may be the iPhone App breaking or various other bugs that occur from time to time.

fail

The two are actually a lot more similar than a lot of people realize (running a restaurant or running a billion dollar tech company). Both occur in real-time, right in front of the customer. There is no “down time” during the operating hours of a restaurant, just as there is no “down time” during the running of a social network. They can’t just magically fix all the mistakes while things are shut down and reopen the next day fresh.

They have to stay running on all other fronts, in addition to fixing whatever went wrong. A restaurant has to continue serving all of its other patrons, and a social network has to keep functioning for all of its other users, while the problem gets fixed in the background (at the same time).

Initiating a Moment of Truth

This is what I used to call it when something bad happened at the restaurant. It is not a ‘problem’… it is a ‘challenge’ that gives the business an opportunity to show what they are really made of. As I said, initially, companies make mistakes (even the best companies). How the mistake is handled is what separates the weak companies from the strong companies.

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The “problem” that occurred is an opportunity for the business to:

  1. Apologize for the mistake.
  2. Let the guest/user know that a solution is being worked on.
  3. Fix the problem (get the right food out or work out the kinks in the Google+ iPhone App).
  4. Make it up to customer/user (with restaurants, I would comp a guest’s meal, but with a social network they may need to think outside-the-box on this step).

I was the only one that I know of that complained, but I’m sure the bug in the iPhone App affected all Google+‘s iPhone users. To make up for the iPhone App being unusable for multiple weeks, perhaps on the next App update, they could include an extra feature that is iPhone-exclusive.

So, a way +Google+ could “initiate a moment of truth” would be:

  • issuing an official statement that explains the error
  • that they fixed it.
  • they are including an extra special feature in the next update to make up for it.

Another way Google+ could initiate a moment of truth would be:

  • issuing an official statement.
  • that they fixed it.
  • maybe offer a couple free songs from Google Music (a way to apologize, and secretly convert iTunes users over to using Google Music).

The fact that +Vic Gundotra  took notice of my post at all was huge for such a large company like Google… and I can infer from his plus-mentioning of someone else that it’s being taken seriously. However, Google could take it to the next level of customer experience by doing something like the examples I’ve listed above.

I know that it is such a large-scale user base that the individual can get lost in the shuffle, but I don’t think the solutions I’ve suggested above are unreasonable for Google to do, and it would set them apart from the other technology companies by actually taking the user’s discomfort seriously, showing that they empathize with them, and making an effort to do something to make up for it.

That’s what would push them into an exceptional customer experience level, like what you would expect at one of the Disney Parks. The “word of mouth” alone from doing something so positive would spread like wildfire on the net: “Even Tech Giant Google Cares About Their Users, Whether They Use Their Branded Smartphones or Someone Else’s.”

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You couldn’t beat that. Just a suggestion…

How to Build Innovative, Next-Generation Products Before Anyone Else Does

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Put yourself entirely into the mind of a consumer (except slightly in the future):

  • How they will think.
  • How they will feel.
  • What your business will look like from their POV.
  • How your product will seem from their POV.
  • What they truly desire.
  • What would make their life easier, simpler, or more enjoyable?

Completely “become the customer” in your mind. Forget about reports, stocks, the shareholders, the technical limitations, and the cost. For a significant amount of time, try and see everything through their eyes, not through the experienced eyes of an experienced businessman.

Try not to recognize the technical limitations taught to you in engineering school. After all, the customer doesn’t care about those things. They do not exist to a customer.

BECOME THE CUSTOMER

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“You’ve got to start with the customer experience and work back toward the technology – not the other way around.”

– Steve Jobs

Imagine the product that would make your life easier, better, or more enjoyable in someway. Now take this imaginary device and try your best to explain it to your team. It’s at this point that you may realize certain “impossibilities” of the product you’ve imagined. You may realize at this point that the technology needed to build this product is a decade away, or is still in the experimental phase.

START BUILDING THAT PRODUCT, REGARDLESS

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“You can’t just ask customers what they want and then try to give that to them. By the time you get it built, they’ll want something new.”

– Steve Jobs

Then, you simply build the product that you wanted, with all hands-on-deck to push along the development of any aspect of it that is not yet possible. Double the R&D funds to that department, if necessary. They key is to build the product that you imagined, and to do it faster than originally seemed possible.

You imagine first, then you make it possible.

“In the end, for something this complicated, it’s really hard to design products by focus groups. A lot of times, people don’t know what they want until you show it to them.”

– Steve Jobs

That is how you disruptively innovate an entire culture with a single product. By doing so, you get to the prize (the fully developed product) several years before your nearest competitor. Everything they do will be a rip-off of your invention, or a counter-move to catch up.

The Future of Business: Experience Over Profit

There is No Such Thing as a Problem

This is a concept heavily inspired by my experience as a restaurant manager. What I would encourage my staff to live by at work.

Every problem is an opportunity

Even in an amazing restaurant, with the best training in the world and every system set up perfectly, shit would sometimes happen:

  • The order comes out wrong.
  • A customer would accidentally be forgotten by their waiter, having to wait extra time to be taken care of.
  • The food order is accidentally cooked wrong.
  • A waiter would put the order in wrong.
  • A tray of water accidentally drops a glass of water on the customer.
  • A customer doesn’t enjoy their meal.

Even with perfect planning and extreme effort, certain problems were unavoidable. Just like they always say: “shit happens.”

Responding

The way to react to these problems was never to give an excuse. They don’t care if you are short-staffed or that the grill broke in the middle of a busy night. They want perfection, and that’s okay. Excuses were not allowed.

How we handled these problems made us so incredibly successful. The solution was always to get a manager to go by the table, so it doesn’t sound like the waiter is covering their tracks. There was no avoiding the problem.

I would tell my staff: I don’t care if you make a mistake, as long as you tell me about it immediately and try your hardest. I don’t want the details of how it went wrong, I only want to know the basics and the table where it happened.

  • The floor manager would always personally go to the table.
  • We wanted to go into that event without hearing the biased view of the waiter, as much as possible.
  • The manager introduces themselves personally to the customs, and find out directly _their_ perception of the situation from their own eyes and words.
  • The manager would always apologize, even if it was simply the customer’s misinterpretation, or perhaps their own mistake. It’s irrelevant the cause of the problem, because customers come to have a great experience.
  • A solution would be arrived at immediately right there at the table.
  • How do we make this right. This was called the moment of truth, the chance to turn it around.
  • The manager would personally oversee the situation from that point.
  • The plan of the solution was communicated to any staff involved.
  • The manager would continue to follow up with the staff to make sure the solution stayed on track, as promised to the customer.
  • If a 15 minute cooked meal gets screwed up, than it’s unavoidable that it would take that same amount of time to get the right meal out to them.
  • The Manager explained honestly these things and not given an unrealistic solution.
  • The Manager Immediately offer the customer a complimentary appetizer to hold them over.
  • Once the solution was reached, visit number two happened from the manager to make sure satisfaction by the customer.
  • At this point we would offer an proper way we would reimburse them. If their meal was screwed up, even after it was fixed, that item would be taken off the bill, simply for the inconvenience.
  • The manager would make visit number 3 at the end of the meal, reassuring satisfaction. Sometimes an added bonus was provided: “free desserts for the table.”
  • – If it ended up still being a shitty experience for the table, a complimentary gift cars was given: “You’re next meal with us will be on the house.”

The main aim was to get that customer back in the building again

This was the goal, even if it meant we didn’t make profit for this meal and the next. Even if it meant taking the fall for a mistake they made, perhaps ordering the wrong dish.

Switching Focus from Profits to Experience

  • There was, at this point, zero–fucks given to money, being right, or profit.
  • We called these of events “the moment of truth,” because it was our chance to turn a pissed off customer to someone who brags about us to friends and coworkers.
  • The customer leaves satisfied, and they are coming back: WIN. Even if this meant losing money from the interaction.
  • Pride came second to ensuring the customer came back in the building again.
  • As we all know, a bad experience is roughly passed on to hundreds of potential customers by word of mouth.
  • A positive experience generates less of a buzz. However, that is irrelevant, because to prevent bad word of mouth is most important.
  • We would always give away for free more than any other restaurant we knew of, and were allowed to have a certain amount of complimentary percentage at the end of the day.
  • If the complimentary percentage became out of normal range during a time, the message was not “lets give away less,” but rather what are ways we can improve our systems to cut that amount by having less of those problems.

Order of Focus

  1. Customer perception was the day-to-day focus.
  2. Constantly and proactively fixing the root of the problem was our week-to-week focus.
  3. Monthly, we would look at the big numbers, mostly to grade the scores against each other, and the management team’s effective execution of steps one and two.

Preconceived Notions are Poison

There was no thinking about “oh, that customer just wants a free meal.” However, we would keep track and if it was the customer every other week, we would take notice and give them less.

Some customers knew our reputation for giving away food and complain on purpose, but that was a small percentage compared to the customers we turned into loyalists for life.

Customer Experience Over Profit

  • Even with how much we would give away, we were the largest, most successful, and most profitable restaurant group in Texas, by far.
  • It was not unusual to for us to have 2 hour wait times on a Friday night, even when the next door restaurants had a wait time of 30 minutes.
  • We spent next to nothing on advertising, as it was all word-of-mouth. We built a drooling fan base by consistently providing amazing experiences.

If more companies and industries were experience focused instead of profit focused, the world would be a better place. This applies to every industry.

If you wow your customers, the profits flow naturally and in larger quantities. This means having to be somewhat flexible with “policy and rules.”

For example: the maximum return-time on this product is two weeks, but we want you happy, so we will make an exception. Most companies are afraid of changing these habits, because they have lost touch with who really runs companies: the customers.

Reputation

Be willing to take the hit on an individual sale, and leave them speechless and happy. I can’t tell you how many times, such as, I’ve personally switched phone companies due to them focusing on their policy, and not focusing on my happiness.They will piss me off, I will trash-talk them, and I will switch providers.

It’s ridiculously less expensive to keep up your current customers than the advertising expenses that go into finding new ones.

When the customer’s perception of your business outranks “how much can we profit this quarter,” that is when you truly maximize your business.

Summing it Up

  • Good companies make money.
  • Clever companies create brilliant ad schemes.
  • Legendary companies are advertised for free by their own fans.

Don’t Ever Forget Who Runs Your Business

With the ease of communication, review sites, and social networks, this will continue to become more important.

From my new Google+ Page: +TheBackwardsTimeMachine