The Last Word: Customer Solutions Profit Ideas

I have talked to many companies who are, with obvious reason, greatly concerned about the health and ultimate survival of their business. For those of you who are not yet in financial crisis I strongly recommend that you focus on customer service and your areas of greatest profitability.

In times when you can not easily force or influence growth to the topline, YOU MUST focus on building the bottomline. That means tightening costs, improving customer frequency, reducing loss and building “average check,” or sales. The ways to do this include:

• Customer Experience Management: keep your customer service standards high and monitor adherence to your standards.
• Employee Theft Control: monitor for employee theft (cash and products) and install a thorough process of investigation and action around identified areas/employees of risk or concern.
• Stress Suggestive Selling: identify the top grossing products/services and train your staff to suggestively sell (they’ll thank you for that).

By being proactive and focused you will have a better chance of weathering the period of this economic storm. What’s more, focusing on what you can control will create a well-run business that will deliver better results in any economy.

This economic environment is of great concern to many industries, but the restaurant industry – which operates on narrow margins as it is – is definitely feeling the pressure.

In addition to the pressures on independent restaurant owners, franchisees are also feeling the pinch. I read recently (Wall Street Journal, “Credit Crunch Squeezes Franchisees,” September 29, 2008) that “lenders are tightening credit to restaurant franchisees.”

This will inevitably make it more difficult for owners to buy or remodel locations. But, what concerns me the most is that this trend will lead to fewer people being able to buy into a franchised business.

Franchising has been known as a way for people to step into business ownership by adopting proven operational concepts. Now, they have to come to the table with at least 50% of the costs in equities.

Internal Stress, Like Employee Theft, Should Also Be Evaluated

What I hope is that anyone considering the purchase of an existing franchise will investigate the current operational data – sales, performance, rank within the region (and overall network), staff assessment, cost percentages, shrinkage, employee theft, leases on property and equipment, etc.

In a troubled economy, you can expect to see instances of employee theft escalate. Look at how your candidate handles workplace theft during this troubled economy, whether they use suggestive selling techniques, etc. You may need to retrain the staff.

Another way of looking at is that their lax business practices may devalue the current performance yet offer you ample upside opportunity with better management practices. Bargain time, anyone?

Doing the due diligence and understanding the health of the operations is the only prudent approach to considering the purchase of a franchise these days. And, this investigation will help to successfully launch the business and maximize 90-day performance.

Will Starbucks not be on every corner???? Starbucks announced a few months back that they will be closing many of their outlets. In their report to analysts, they sited poor real estate decisions. They apparently put some store sales at risk when opening too many locations within too close a proximity.

This is unfortunate, but often what happens when a company gets too big to closely manage all aspects of their operations. As any retail CEO knows – location and a smart real estate strategy are keys to success or failure. That and a good customer service reputation.

I continue to admire Starbucks for the brand and company that they have become, and hope that they will look internally to improve their operational decision-making and procedures. For consumers and fans it will mean fewer Starbucks and longer lines at the ones that remain – but that is the adjustment necessary for a company that got a bit too big and sloppy in its rollout strategy.

Now, let’s chat about those longer lines… if they want to keep their customers, they will need to pay special attention to customer experience management. The store closings could stress their customer service for the ones that remain – which, after all, is an important component of their success.

I don’t know about you, but I look forward to going into my local Starbucks and being recognized and greeted as if I matter! In an increasingly impersonal world, they offer a sense of community this is welcome.

For Starbucks they will survive because while real estate decisions were unsound, their product and customer service strategies have been consistent, high quality and well managed. Customer experience management should include employee monitoring to ensure that they maintain that high level of customer service while absorbing customers from the closed locations.

How fabulous are the online shoe retailers like Zappos! I have heard many women speak directly to the value and benefits of not having to deal with the negative aspects of brick and mortar shoe shopping.

This was driven home when I read the Forbes article interviewing Tony C. Hsiech, the 34-year-old CEO of Zappos.com. Yikes – only 34! With Zappos you go online, search by size/color/type/price/brand (from a huge inventory of options), order all that are of interest and wait for a rapid delivery. And, I do mean rapid.

You try them on in your home and return all that don’t work out – for free. Every step is tracked and communicated to the customer online – you never need to wonder where your order is or when it will arrive, or when your returns are received or will be processed. Talk about a great customer experience!

After all returns you get a simple survey that asks “why” and queries your overall satisfaction with Zappos and the process. It is wonderful to see retailers who understand the value of “customer service” and what is required for complete satisfaction.

Hsiech even employs a “cultural fit interview” for prospective hires. This all smacks of Nordstrom’s level customer service (the original Nordstrom). This is an example of a well conceived customer experience management approach – one that has every consumer touch point and interaction well thought through and competitively improved upon. Touché – well done.

(Note: In our most recent Exec Insights podcast – I interviewed Kelly Davis of The Strategy Tree, who gave us some ideas on how to hire great customer service employees. You might find some useful info there if you tune into it.)

Avoiding Costly Customer Service Hiring Mistakes

Dan focuses on what you can do to hire the best front line customer service employees possible in this discussion with Kelly Davis, owner of a top-notch human resources consulting firm, The Strategy Tree, www.thestrategytree.com, to find some answers.

The Challenge: Today’s tight labor market makes it tough for customer-focused companies to recruit and retain great customer service employees.

The Quandary: Avoid having to lower your quality bar for recruiting and hiring your service-dependent employees.

The Remedy: Learn how to manage the system. There are pragmatic answers if you pay attention to some basics and some somewhat contrarian advice.

Listen & Learn:

• How to become the preferred employer that attracts the cream of a limited talent pool.
• What to do when skills in the available labor market don’t keep up with demand.
• Why reference checking is different for customer service focused employees – think outside the box!
• Why temperament is a critical, yet often overlooked, attribute for success when hiring customer service employees.
• How to manage multigenerational customer service employees – Baby Boomers, Gen X, Gen Y… Oh My!
• Why you need to think outside the box on those reference checks.
• How to create a solid recruitment process that improves your chances for success.
• More…

Today’s tight labor market makes it tough for customer-focused companies to recruit and retain great customer service employees. So, how do you avoid having to lower your quality bar for recruiting and hiring your service-dependent employees?

Dan Cosgrove focuses on what you can do to hire the best front line customer service employees possible in this discussion with Kelly Davis, owner of a top-notch human resources consulting firm, The Strategy Tree, www.thestrategytree.com, to find some answers.

 

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