The Exponential Power of Gratitude

Gratitude

Gratitude

Wow, another year’s Thanksgiving Day is upon us in the United States. Like many Americans, this is one of my favorite holidays on the calendar.   It is a great time to get together with friends and family, show our appreciation, and express our gratitude for what we have.

Intuitively, we all understand the importance that gratitude has on our emotional, spiritual, and physical well-being. Whether its family, friends, or community, we can always find something positive in our personal lives. Yet, many of us keep our personal lives separate from our business and professional lives. Just think how we might be able to transform our organizations, our markets, those we lead, and those we serve if we integrate an attitude of gratititude into our business culture .

In keeping with the holiday tradition, I’d like to express my gratitude for the following people and organizations that have impacted me and my business over the last year:

  1. Clients & Prospects: The number one purpose of any business owner, executive, manager, or employee is to get and keep customers. Without clients and prospects, we have no business. I am thankful for anyone who has let me serve them. However, it’s not just satisfied clients that I am grateful for having. It’s also those prospects or customers that expected more because they let me ask the important questions that lead to breakthroughs and transformations in my business.
  2. Competitors: Competition is a great thing. Why would anyone attempt to limit or squash it? Not only do competitors help validate that a market exists for my services, but my competitors force me to continuously find ways to add value to my customers and differentiate myself in the market.
  3. Trade Associations & Analysts– These organizations help me stay in touch with the pulse of the industry. I am involved in several trade associations and grateful to serve on the board of one. The networking, exchange of ideas, and conference & events offered through these organizations allow me to remain current with the critical issues and trends important to my customers and market at large.
  4. Business Partners: I am thankful to my business partners who work collaboratively with me, provide me with suggestions on how to grow my business, and share a referral or two. I am also grateful that they have let me serve them in a similar capacity.
  5. Coaches, Advisers, and Mentors: These folks provide me with a competitive edge. They hold me accountable, help sharpen my skills, remind me of my strengths, and share in my success. I am truly grateful for these individuals. Do you have anyone like that in your network?
  6. Technology platforms vendors: I am very grateful for the Cloud and Mobility platform vendors with whom I work. They have provided me with access to new applications that enable me to better serve the market, expand my reach, and offer new innovative products and services.
  7. My Tribe: A special thanks to anyone who regularly follows me on social media, reads my blogs, submits a reply, shares a post, or favorites a Tweet. Thank you for being part of the conversation, sharing your wisdom, and getting my message out to others who you think can benefit.

Now it’s your turn. What are you grateful for in your professional life? Who or what are you thankful for you in your business? Take time out and reflect. It’s easy to become complacent as the year comes to end. Maintain your edge and achieve those stretch goals you’ve set for yourself through the power of gratitude!

Monetizing Customer Satisfaction

customer satisfaction image

There have been numerous studies published by business gurus that it is very costly to acquire new customers. As result it is very painful when we lose a customer. Not only can it hurt current revenue, but it can demoralize employees and dampen future sales. In fact, the average customer with a complaint will tell between 9 and 10 people; some will tell as many as 20.   That’s why it is so important to measure customer satisfaction on a consistent basis. The truth is that maintaining a high level of customer satisfaction is critical to achieving financial gains. According to research from The Aberdeen Group, organizations that achieved a 90%+ customer satisfaction rate saw an annual 6.1% growth in service revenue, 3.7% growth in overall revenue, and 89% rate of customer retention.

Unfortunately, many service executives struggle to achieve these results. Very often this is because they don’t understand what factors influence or drive customer satisfaction. As the saying goes, you can only improve what you measure. If this is the case, why not measure factors that drive satisfaction? Instead, many companies measure only satisfaction and not the factors that influence it. This is like trying to lose weight by just weighing yourself on the scale every day and not measuring other things like calories consumed, portion size, length and frequency of exercise, etc.

I have been studying the relationship between customer satisfaction and financial performance within the High Tech Service Industry for over 20 years and I’ve found that companies who turn high customer satisfaction into measurable financial results are those who understand the four primary factors that drive customer satisfaction and loyalty. They are performance related and include:

  • Service Proficiency – Customers expect that service is performed right the first time, every time. Do you have the right resources (e.g., parts, people, systems, etc.) in place to achieve this outcome?
  • Service Resolution Time – Customers will pay close attention to the length of time it takes to get their issue resolved. This may be measured in terms of response time, turnaround time, and repair/resolution time.
  • Customer Experience – One bad experience with a discourteous, non-responsive employee can result in a lost customer. Inaccurate invoices and reporting errors and delays can also have negative consequences.
  • Supplier Know How – Most customers usually want to do business with a trusted partner. Someone who understands their requirements, has experience with similar issues, and offers solutions that meet their needs.

 

By measuring these factors, you’ll understand, at a more granular level of detail how well you are meeting your customers’ expectations. In turn, this will help you understand where you need to improve. It will most likely be in one or more of the following areas 1) people (i.e., skills, training), 2) processes, 3) systems, or 4) information (e.g., data, knowledge). For example, if the customer experience is positive but resolution time is slow, then maybe it’s a matter of not having the right systems in place. On the other hand, if service is delivered in a timely manner but it’s just not performed right the first time, then maybe it is a process issue. It’s likely to be people issue if the customer experience is negative. And if your customers perceive that you do not understand their challenges or have a solution to their needs, than maybe it is time to get better information about their situation.

In summary, measuring customer satisfaction is critical to getting and keeping customers. However, you can only improve customer satisfaction if you know exactly where your gaps exist.   That’s why it is important that you design your customer satisfaction studies to measure key drivers of performance. The more granular and precise your measurement, the more effective you’ll be at zeroing in on critical issues that produce a high return. That’s why you might also want to consider working with an experienced management consultant who can not only help you design and execute the survey but work with you to achieve actionable results. To learn more schedule a strategy session today.

Do customers really know what they want?

Market Research

“If I had asked people what they wanted, they would have said faster horses.”
–Henry Ford

Last week I had a very interesting conversation with a prospective client. Let’s refer to him as Jim to keep this story anonymous. At any rate, Jim asked to meet with me to discuss challenges he was having with his business. The issue that he presented me with is not that unusual. Jim owns an IT Solutions business and he is struggling with a strategic planning issue facing many companies today.

Basically, Jim is keenly aware of the “Nexus of Forces” within the IT industry and how it will impact the future of his business. In fact, he is currently experiencing a decline in sales since his customers are no longer purchasing new on-premise hardware and software at the rate they once were. Furthermore, his once dependable, annuity based, hardware maintenance revenue stream is also on the decline as his customers now turn to cloud based solutions and mobile technologies which require a different support model.

At first glance, a logical growth strategy would be for Jim to diversify into new service and solution offerings brought about by the Nexus. However, it is not that easy. The big question that Jim has is which technologies and applications should he concentrate on. He is concerned that if he picks the wrong one, his customers may not be ready for it and sales will continue to decline, creating a negative impact on his financial performance.

My suggestion to Jim was that he should survey his customers to get a better understanding of their current business needs and requirements, and future plans. This will help him understand where to focus his resources. Jim quickly pushed back and claimed “My customers won’t be able to tell me what they want because they are not using any of these technologies.” Jim also pointed to the famous quote from Henry Ford, “If I had asked people what they wanted, they would have said faster horses.”

Unfortunately, this is a common view held by many business owners and executives within the IT Service Industry. Quite frankly, IT executives think market research is not a necessary part of the strategic planning process for a number of reasons. Either they don’t think their customers will be able to effectively express their wants and needs, or they think the answers will be found in some analysts’ report. Others think they don’t need to ask because they are smart enough to figure out the strategy on their own, or they confuse just talking with customers with conducting analytical and objective market research

The truth is that customers can articulate their needs. While they may not be able to identify or define innovative solutions on their own, they can express the challenges and frustrations they are having with their businesses, existing technologies, and current suppliers. This information can help you understand which solutions you can offer to them and how to get your message across. Basically, you’ll be able to understand their behavior, future aspirations, concerns and fears. More importantly, you’ll get insight into what types of solutions they might need and how they want to be sold to.

As far as analyst’s reports are concerned, they are a great source of data. However, they deal with macro-economic industry trends. These trends may or may not reflect the needs and requirements of your market or niche, on a micro level. Remember, there are reasons why you have the customer that you do and these reasons may not align with macro level information. Furthermore, there is nothing like analyzing granular data that speaks to your specific customers’ desires, behaviors, and pain points.

Talking to customers is great! However, there is an inherent level of bias that comes into place when your sales personnel or management speaks directly to customers; in the way the question is asked, by the meaning that the customer places on it, and the way the answer is interpreted by the interviewer. That’s why it is important to consider working with an independent and objective consultant to help you design the questionnaire, collect the data, and analyze results. Lastly, thinking that you know better than your customers is just plain arrogant. This is all the more reason to work with a 3rd Party consultant

Let’s get back to Jim. Instead of conducting market research, he’d rather beef up his marketing campaign. This maybe be throwing good money after bad if he truly understands and accepts the trend he has been observing. However, there is chance that he could be right. Without hard data, he is taking a gamble, don’t you think? Ultimately, market research provides data which will help optimize Jim’s decision making process and overall business strategy.

I’d love to get your thoughts and reactions to Jim’s situation. Please share your comments. Hopefully, Jim will see the value of market research while he still has time and capital to change course in his direction. Please also don’t hesitate to schedule a strategy session with me if you would like to learn more about how market research can help optimize your decision making process.

Market Orientation – The Key to Service Revenue Growth

 

Customer Focused image

Did you ever wonder why some companies in the Aftermarket Service Industry are struggling to increase revenue while others are achieving phenomenal year over year growth? One of the reasons might be their business orientation. I mean whether they have production orientation or a market orientation. Companies with a production orientation think in terms of what they make or produce. In other words, their needs come first. In contrast, those with a market orientation think in terms of providing the market with what it needs. The difference between a production orientation and market orientation could be the difference between having loyal, raving fan customers who provide tons of referrals versus struggling to keep the ones you have.

Let me give you an example. My wife and I are empty nesters and we enjoy going out for dinner every so often. We have a choice of two restaurants nearby that sell the type or cuisine that we enjoy. They both offer a similar menu and the quality is the same at both places. One restaurant, lets refer to it as restaurant A, is two minutes from our home. We can practically walk there. The other, restaurant B is a 15 minute drive away. The manager of restaurant A is not very friendly. Every time I go in there he acts like he doesn’t know me. He never smiles or acknowledges me. He also won’t accommodate special requests because he says it will place too much of a burden on his kitchen. It’s either his way or nothing at all. Meanwhile, the manager at restaurant B knows my name, he is always happy to see me, and willing to accommodate any special request that I have. Which restaurant has a production orientation and which has a market orientation? If you said A is production and B is market then you get a gold star. As you probably guessed, I also prefer restaurant B. I only go to restaurant A when I am in a hurry.

The truth is we all like to do business with people and companies who have our best interests at heart. In fact, we are likely to go out of way to do business with them. If you are like most rational business managers and executives, the challenge lies in finding ways to make market orientation more than just a matter of delivering the warm and fuzzy to customers. To be effective, we need to understand how to make it into a sustainable, competitive advantage. To achieve this outcome we have to shift our perspective from being internally focused to externally (think customer) driven. There are five (5) core areas in your business where you can focus for this change to occur:

1. Attitudes toward customers – Companies with a production orientation have a belief that customers should be glad they exist. After all, they are working so hard to lower costs and bring better service capabilities to market. Market oriented companies realize that it’s their customers’ needs that determine business strategy.

2. Product/Service offering – Do your customers’ requirements determine your capabilities and service offering? If you answered yes than it is every likely that you have adopted a market orientation since production oriented companies let their capabilities determine what they sell.

3. Role of Market Research – Production oriented companies do not place much value in market research. It is used to determine market reaction if used at all. On the other hand, market oriented companies understand that market research is very powerful tool for determining customer needs and evaluating how well they are being met.

4. Interest in Innovation – What does innovation mean to you? For the market oriented company, innovation is about leveraging technology to create new opportunities for customers. For the production oriented company, technology is valued for its ability to help cut costs.

5. Objective of Profit – Profit is a critical objective for market oriented companies. It plays a role in setting strategy. It’s what’s left over after all costs are covered for the production oriented company.

Transitioning from a production oriented company to a market oriented company does not occur overnight. It takes a little bit of work for this to happen. The first step is to take a critical assessment of your business. You need to understand how your company shows up in the marketplace. Look at where you really are not on where you imagine yourself to be. It’s not just about how front line personnel behave and interact with customers. It’s also about whether or not your strategy, operations, service portfolio, and sales & marketing processes are designed to meet the needs of your current and potential customers. Once you have these questions answered you can begin to put together a plan and then take on the work associated with implementing that plan. Still wondering why some companies achieve exponential growth while others struggle? Contact Blumberg Advisory Group for a free consultation.