Management 2000 Blog

7 HABITS OF A TRULY CUSTOMER-CENTRIC COMPANY

 

In March 2000, Harvey Thompson of IBM published a book, "The Customer-Centered Enterprise, How IBM and Other World-Class Companies Achieve Extraordinary Results By Putting Customers First" (McGraw-Hill).

Thompson suggests that a company like Amazon.com is one of the best examples of a Customer-Centered company. At the other end of the scale, he puts Microsoft as an example of a Product-Driven company. We can all relate to what Thompson is saying. The book provides excellent advice on how being customer-centered can produce much better business results than the product-driven approach.

In some ways, Thompson did not go far enough. The real key is to try to relate to how the customer sees our company. How will our typical customer feel when he or she contacts our company? We should try to stand in the shoes of our customers. Doing that, how does our company rate?

The following 7 Habits distinguish the truly Customer-Centric Company from a company that merely thinks a lot about its customers.

 

Why not score your own company and see how you rate.

1. WE HAVE A PROMISE FOR OUR CUSTOMERS, NOT JUST A MISSION FOR OURSELVES

We have a Mission statement for the company, which is like this:

Does not mention customers	Mostly about the company	50/50 company / customer	Mostly about what we will provide to our customers	A clear commitment to our customers of what we will provide them
Score 0	Score 1	Score 2	Score 3	Score 4

 

2.WE BUNDLE SERVICES IN WITH OUR PRODUCTS

We only provide products	We provide minimal services with our products	Our services are as good as our average competitor	Our services are as good as the best of the competition	We provide the full services that any customer might want
Score 0	Score 1	Score 2	Score 3	Score 4

 

3. OUR WEBSITE IS A WELCOMING DOOR, NOT A MAGNIFICENT EDIFICE

Our website is like this:

An impressive view of all that the company represents	Our customers can find what they want if they are persistent	50/50 for general visitors and for customers	Mostly for the customer	Our customers can easily see how to get the information they need
Score 0	Score 1	Score 2	Score 3	Score 4

 

4. THE CUSTOMER FINDS IT EASY TO CONTACT US, BY WHATEVER METHOD IS CONVENIENT

There are four usual ways of contacting any company - telephone, fax, email message, website form.

How many of these can the customer easily find from your website?

We don't have a website	One way	Two ways	Three ways	All four ways
Score 0	Score 1	Score 2	Score 3	Score 4

 

5. OUR TELEPHONE SYSTEM IS "CUSTOMER-FRIENDLY" AND NOT JUST COST-EFFECTIVE

Most calls are greeted by a gruff human being	Most customers wait until they then talk to a machine	Most customers talk to a machine but can get a human being	We have a rapid automatic call reception system	Most calls are greeted by a friendly human being
Score 0	Score 1	Score 2	Score 3	Score 4

6. OUR CUSTOMER HAS ONE MAIN CONTACT WHO MAKES EVERYTHING HAPPEN

 

No designated contact and no information kept about customers	Several contacts but little information kept about customers	Several contacts but with a good logging system	Two main contacts with a good logging system	There is one main contact for each customer
Score 0	Score 1	Score 2	Score 3	Score 4

  7. OUR CUSTOMER SERVICE GIVES THE SERVICE THE CUSTOMER REALLY WANTS

A stress-relief process for complaints - no results	Sympathetic hearing - minor results	Tries to correct the problem	Corrects the problem and minor compensation for trouble	Really impresses customer as they "Make it right"
Score 0	Score 1	Score 2	Score 3	Score 4

So add up your scores for the 7 habits and see how you rate.

Total score
0 - 14 You probably turn off a large proportion of potential customers
15 - 20 You probably irritate some of your potential customers
21 - 25 You're doing pretty well but the competition may do better
26 - 28 Now you're a company I would like to deal with.

So how did you do? Perhaps you feel the rating is too critical. However with the Internet, the customer is now in the driving seat. Some companies are really giving incredible service and that is setting the standard for what customers expect. This is not rocket science. All it takes is a little more thinking and a little more attention to detail. So why not join the winners. Look at each of the questions where you scored less than 4 and see whether you should be doing more to make your customer feel valued.

With this short rating system you will be able to see how you can help your brand(s) become more Customer-Centric. Focusing on your customer in all of these aspects will ultimately help your brand(s) in retaining more VERY satisfied frequent user customers, resulting in increased profit and growth for you and your brand(s).

To obtain guidance to help your company become more Customer-Centric, send us a Message today.  We provide conversation without obligation.

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Fast. Powerful. Software that does Net Promoter right.

Only NPS Go+ from Satmetrix delivers the four things you need to do – and do well – to build a successful customer experience using Net Promoter.  It is cloud based technology developed solely for customer obsessed companies who want the greatest benefit from their Net Promoter program. You will be up and running in just hours, with all the tools you need to get actionable results.

 Satmetrix is the leader in cloud-based customer experience software for business. Over the last 13 years Satmetrix has helped businesses link customer loyalty to financial results with outstanding success. Satmetrix has deployed their software with many of the Fortune 1000 and 500 companies and now are offering it to the mid market.

Do you think you’re delivering a superior customer experience?

How do you measure this?

Did you know that 80 percent of companies believe they provide a superior customer experience, yet only 8 percent of their customers agree with them? This is an alarming fact - especially when you run your own business.

On average, companies that use the Net Promoter System grow at over two and a half times  the rate of their competitors that do not use the system. Satmetrix gives companies the ability to identify measurable drivers of loyalty that ultimately help you prioritize your investments and efforts to maximize the potential of your company.  There are four loyalty behaviors that affect this rate of growth.

1. The repurchase of your product or service

2. The purchase of additional products or services (upselling)

3. Referrals to family, friends and acquaintances – for those businesses providing a onetime product or service, referrals are an especially critical component of growth

4. The power to turn constructive criticism (feedback) into improvements of your products or services

 

 

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Networking at The IFA, Franchise Consulting Firm

 Throughout the history of business, Networking has been a major factor in business success. Management 2000 knows how much Networking can affect you and your business. So when you are attending the IFA, remember the more people you can connect with at the convention, the more resources you can call upon when you find yourself in a business dilemma.. Within the franchise community there are many groups you may want to join.  Many of the people you meet in the franchising world will end up becoming lifelong friends.

 We believe that networking helps you achieve your personal goals, which ultimately drive your business goals. The way you can start your search for new acquaintances is to identify companies you admire and find people in those companies you think would benefit your business. Keep a list of these people in your mind as you are trolling the IFA convention and stop in at their company booths to say “Hi” and introduce yourself. The more people you know in the franchise community the better off you will be in the long run.

 Those that do not understand the importance of networking will obviously not find the IFA convention as valuable as those who take the time and make the effort. We look forward to seeing existing clients, old friends and meeting those we do not know yet and helping you increase profit and growth for your company in the future.

 

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Another Sold Out Event Featuring Bob Gappa

 

 

At the upcoming International Franchise Association Convention in Orlando, FL (Feb 11-13, 2012), Bob Gappa will be conducting a ICFE Special Session on February 11^th. The topic will be “Strategic Thinking and Planning”, covering ten different areas of business that are often pushed to the side. He will help participants discover and define these areas so that they have a clear understanding of what needs to be done and how you can accomplish the results the brand is looking for.

 Bob Gappa has worked with over 1,350 companies since the creation of Management 2000 over 30 years ago. His expertise is ever growing and adapted to current/ future trends in business. From Bob’s work with companies as an Expert Witness to his commitment to World Class Branding as a strategy for increased profit and growth. Bob and Management 2000 have exceeded the expectations of our clients since the beginning and that is why Management 2000 has been a leader in the franchise consulting arena. So when you are at the IFA, make sure to make the opportunity to meet Bob Gappa and see how he could help you become the “World Class Brand” you have always wanted to be.

 In addition to this Special Session there are many more that have great value to your Brand. Take a look at the IFA’s list of sessions available. Remember to network in order to learn as much as you can from all of the people who have a big influence on the franchise community.  I look forward to meeting you at the IFA Convention in Orlando, FL.

 An example of Bob’s Expertise:

“Attention Management Teams: What’s Beyond the Recession?” May 2009 Franchising World. By Art Coley, CFE

Bob Gappa’s response to:

What is the right management team and planning for the future? What would you recommend to franchise executives?

Everything is about results. It’s all about results. Every conversation should be about results. The difference in great companies is discipline and being clear on goals and results. If this is not your management style or culture, you are in trouble. Executives have to ask first, “Are we a world class company?” Too often it’s “Let’s franchise this” and then later on questions might start about being a world class company. Whether you franchise or not is irrelevant. Franchise executives have to be asking the same “world class” questions that any other company executive should be asking. The CEO can only seek one result. When Jack Welch was at GE they bought companies that could be No. 1 or No. 2 in that industry within two years or they sold it. That was his one result he was seeking everyday. Others on the team had supporting results they had to go after. Strategic plans are not just about more sales and profits. It has to be focused on the customer. If you have strategic plans, do they include research on your customers? Are you asking your customers what they need and want? Do you know what they really value about your service or product? That’s where planning starts. It’s not in the boardroom with executives guessing. Your customers will tell you what type of planning you need to do. Start there.

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Franchise Business Plan

The future has already happened. We just have to catch up to it.

Theory does not precede and cause new practices.  Theory follows the observation of new practices and extrapolates its importance in the future state of things. Scientists and social scientists and social psychologists watch what is happening and build theories from what they observe.  This was true of da Vinci, Galileo, Newton, Einstein, Pasteur, Kepler, Copernicus, Hubble, Ferme, Piaget, Oppenheimer, Salk, Skinner, Levi-Strauss, Mayr, Drucker, Riechheld, etc. 

 Newton’s Newton's law of universal gravitation provides an accurate approximation for most physical situations.  Gravity was first a reality and then a theory developed by Newton and then modern physics describes gravitation using the general theory of relativity by Einstein, in which it is a consequence of the curvature of spacetime governing the motion of inertial objects.

Polish physicist and chemist, Marie Curie was a pioneer in the field of radioactivity, the only person honored with Nobel Prizes in two different sciences. Her achievements include the theory of radioactivity (a term coined by her), techniques for isolating radioactive isotopes, and the discovery of two new elements, radium and polonium. It was also under her personal direction that the world’s first studies were conducted into the treatment of neoplasms (“cancers”), using radioactive isotopes.

I could write about each of those listed.  But I choose to list Peter Drucker and Frederick Reichheld.  Drucker, called The Father of Modern Management, observed and developed business theories, 55 years ago, that the purpose of business was to create systems that drove revenue and controlled costs. He further observed and developed theories that the driver of revenue was the creation and retention of very satisfied, loyal, frequent user customers. Reichheld further observed that these customers satisfaction and loyalty could be measured and he observed and built theories that small increases in satisfaction, loyalty and frequency would yield multiples of profit and growth.

Today these observations of Drucker and Reichheld are accepted practices in the Fortune 1,000 companies and are being slowly accepted by the franchise community.  Brands using franchising as their primary growth strategy would do well to study these customer-centric theories and practices and implement them very quickly in order to achieve greater profit, growth, ROI, EVBITDA, and shareholder value. The theory of customer-centric is as obvious as gravity, the atom, and cancer research.

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Developing Successful Franchise Training

The International Franchise Association convention is coming up very soon (February 11^th-14^th). Attending this convention will help you and your company network with some of the most influential and beneficial companies in the franchise community. Alongside meeting many new people and companies there will be plenty of breakout sessions and seminars to attend while you are there. The topics of these seminars range from financial planning to learn how to franchise. Management 2000 is proud to announce The “Strategic Thinking & Planning” breakout session that will be held on February 11^th at the IFA convention.

Here is a taste of the things you will learn and better understand to help your brand(s):

Ineffective training programs lead to high turnover, poor compliance, bad franchisor /franchisee relations, lack of standardization in the marketplace, low market share and dissatisfaction among franchisees and consumers. We show clients how money invested in their training programs will pay tenfold dividends in higher revenues and profits for franchisors and franchisees. Among the subjects included in franchise training programs developed for our clients are:

› Understanding and appreciating how your system really works

› How following your system will maximize profits

› Why marketing is critical to growth

› Importance of marketing the brand within the walls of the unit

› Importance of providing unparalleled customer service

› Understanding how they own the assets of the business, not the franchise itself

› Understanding that they are not independent owners, but interdependent co-investors in a franchise marketing and distribution system

› How to work with fellow franchisees to dominate local markets

› Importance of opening new units and how, if they don’t, competitors will

› Using market share as a way of determining if they are in or out of business

› Customer service strategies

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Successful franchise systems

Profitable  and successful franchise systems in 2012 and beyond will be those that build strong partnerships with their franchisees and are committed to dominating their markets by providing unparalleled customer experiences for their valued customers.

Over the past three decades we have had the opportunity to work with hundreds of franchise systems, offering a wide range of diverse products and services. Yet, as different as these companies have been, we have seen a similar pattern emerge repeatedly. This experience has led us to isolate what we call The Components Of A Successful Franchise System.

 1) Making The Customer The Focus Of Everything We Do
We must learn to talk to the customer and build our business around their expectations, wants, needs and desires. We must measure how well we are doing in serving and satisfying the customer. Following these priorities will result in high margins and profits and:

• Get the customer.
• Keep the customer.
• Make the purchase experience exceed the customer’s expectations.
• Build goodwill, which will result in the customer being the best form of marketing.
• Offer a wide range of products and services, which will get the customer to buy more often.
• A successful franchise system

 
2) Superior Leadership
Your management team must provide the kind of leadership that earns the respect and trust of franchisees.  Your leadership should inspire an appreciation for the operating system, help internalize the desire to follow the system and result in opening additional units.
 
3) A Strong Business And Financial Plan
To succeed in franchising, both the franchisor and the franchisees must carefully plan the growth of the brand and determine how to control finances. In addition, you must have a plan for systematically monitoring franchise operating information and analyzing return on investment from the development, marketing, operations and training departments.
 
4) Recruiting Excellent Franchisees
We believe franchises should not be sold. They should be awarded. You must have an efficient system for recruiting and awarding franchises to people who will:

• Build the value of your brand
• Follow your proven operating system
• Use your ongoing performance improvement to dominate local markets

 
5) Operating Systems/Effective Manuals
At the very least, your manuals should clearly and concisely document your proven operating system.
At best they can also:

• Enhance the value of your brand among franchisees
• Teach the value of franchising, marketing, customer service and compliance
• Act as valuable marketing tools in the recruitment of new franchisee candidates

 
6) Excellent Franchisor/Franchisee Relations
You must constantly promote a franchise-wide strategic-partners relationship. Everyone should work together toward the common goals of disproportionate market share, enhanced brand image and mutual profit.
 
7) A Focused Performance Improvement Staff
You must have a professional field staff who will work in harmony with franchisees to help them deliver excellent customer service, build market share and work with fellow franchisees to dominate local and regional markets.
 
8) Effective Training Programs
Awarding franchises to top candidates is only the beginning. You must have a carefully planned training program to assimilate them as smoothly as possible into your organization. You must also provide ongoing programs that will further develop existing franchisees and reinforce the purpose and practice of your systems and strategies.
 
9) Technology: The Management Of Knowledge.
Today’s company, if it is to be tomorrow’s company must learn how to use technology to manage the knowledge it has available and to help it get the knowledge it needs. Most companies today do not have the information they need, when they need it, to make critical decisions that affect its mission. If we need information we have to find a way to measure, track it and then get it to the right person at the right moment to be a successful franchise system.
 
10) The Right Metrics.
In addition to the excellent ways you have to measure the performance of your company it is our belief that the following seven metrics are critical today:

• the number of new customers this year over last year
• the customer retention ratio
• their satisfaction score
•  the frequency of use number
• the loyalty ratio
• the satisfaction of franchisees and of Franchisees’ employees
• the turnover of the franchisees employees

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Business Strategic Planning: How “Customer Focus” Came About.

The Changing Nature of the Customer and of Competitive Advantage

 A customer is anyone who uses your products or services and as a result you produce value for them.  The purpose of this blog is to understand that a customer is the ultimate end user of your business, company owned or franchise operated.

 It is commonly agreed that the reason for business is economic performance.  Truthfully, the purpose of a business strategic planning is to create and keep customers and the result of a business is VERY satisfied and loyal customers. 

• Very satisfied customers drive branding today.

•  Very satisfied customers do business with a company at a factor of 6 times over satisfied customers and they personally recommend, rather than simply refer that business to friends and family. 

 Branding used to be defined by measuring “how well known” a brand was among consumers.  This ranking was done with either the technique of “aided top of mind awareness” or the technique of “unaided top of mind awareness”.

 The new way of looking at Branding is known as “Emotional Branding” and has been written about by Marc Gobe [Emotional Branding – ISBN # 1-58115-078-4].

 Reality is changing the way businesses are thinking about how they do business.  Simply put our economy is being transformed from a manufacturing mentality and economy, to an experience mentality and economy. This is starting to transform companies that use franchising as a growth strategy.

 Today’s consumers want to have very satisfying experiences when receiving a product or a service from a brand and its representatives. The Harvard research over the past thirty years has indicated that our economy has evolved since the 1950’s through four stages of “Competitive Advantage.” These stages are:

 1.    Points of Distribution [1950’s – 1970’s]

 □             This stage was characterized as having Distribution networks each of which had a Dealer network.

 □              This stage was primarily concerned with manufacturing, distributing and selling more “stuff” than competitors. So the focus was on the acquisition of Distributors and Dealers.

 2.    Quality [1960’s – 1980’s and to the present]

 □             Quality, we learned from the Japanese, became the next competitive advantage.   Quality replaced “built in obsolesce” as a principle of business and was replaced by Total Quality Management, Zero Defect Management, ISO 9000, Six Sigma, etc.

 □             Quality, often combined with points of distribution, became the next competitive advantage. This became the key to success.

 □             One of the slogan’s of this era was; “Processes Are More Important Than People.”  Many economists give credit to this era of quality systems to the increases in productivity the world has been experiencing over the past 40 years or so.

 □              Quality systems are designed after two questions are asked and answered: [1]”What is the most effective way to do a thing?” and [2] “What is the most efficient way to do the most effective thing?”

 □              In many ways this era gave birth to franchising as a system and process way of replicating business practices.  Franchising reinforced the era’s slogan “Processes Are More Important than People” by often saying of their franchises; “Anybody can do this.”

 3.    Customer Service [1980’s – 2000 and to the present]

 □        Customer Service, characterized by slogans such as “Knock Your Socks Off Service,” “Exceeding Customers Expectations,” “Doing Whatever It Takes To Please The Customers,” became platitudes of this next stage of Competitive Advantage. 

 □        Companies that were able to have numerous points of distribution, with excellent systems, creating high quality products, by employees dedicated to serving the customer with excellence and exceeding their expectations experienced growth and their profits increased.  These companies experienced a competitive advantage over others who could not do what they did.

 4.    The Customer Experience [1990’s – to the present and into the future]

 □             In order to “fix” the inconsistent quality resulting from individual, dedicated, employees attempting to create great customer experiences, senior executives began to ask themselves some questions.

 □             Could the things learned from Stage 2 where quality could be controlled by having well trained, engaged and dedicated employees executing systems and processes designed to produce zero defect products be applied to the interaction employees had with customers?  Or were there too many variables involved in the service experience that made controlling the customer experience impossible?

 □              We know the answer is that the customer experience can be controlled, and that it can be measured.  So the ultimate competitive advantage for today’s businesses is accomplished by having the dominant number of locations with quality, defect free products and services delivered within a controlled experience by well trained, developed and engaged team members resulting in very satisfied and loyal customers who return frequently and recommend the business to friends, family and colleagues.

 

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The keys to VERY satisfied and loyal customers are!

1. To have a business model designed to create VERY satisfied and loyal customers,

2. To have well trained, loyal and satisfied team members who love to create these experiences for customers and to execute the business model; and

3.  To have well trained managers and franchisees that know how to select, orient, manage, lead and coach team members to be engaged in the pursuit of VERY satisfied and loyal customers. 

 These very satisfying customer experiences result in three things:

1. The customers are VERY satisfied and loyal,

2. They return frequently, and

3. They recommend your business to everyone. 

 Determining the sustainable competitive advantage [how we go about creating and keeping VERY satisfied and loyal customers] is the primary goal and function of the planning process.  Once discovered, the sustainable competitive advantage puts a company in an advantageous position in creating more economic value for its customers vis-à-vis its competitors.  The results of creating more economic value for its customers are: 

• Greater profit and growth
• More new customers
• Higher retention rates of existing customers
• Increasing numbers of VERY satisfied customers
• More loyal customers
• Increased frequency of customer purchases
• Lower employee turnover
• Increased employee satisfaction, loyalty and engagement
• Higher average unit volumes
• Higher margins
• Greater market share
• Increased Brand equity of franchisees and franchisor
• Easier to find more qualified new franchisees 

Competitive advantage is founded in the differences between a company and its competitors.  These differences are often never found in the business model itself.  These differences are found in the perceptions, emotions and feelings the Brand’s customers have when experiencing the implementation of the business model by loyal, satisfied and engaged employees, managers, franchisees and team members.

 The business model is defined as the systems, processes, programs, policies and procedures that make up the delivery systems for the Brand’s products and services. These systems, processes, programs, policies and procedures include administration, marketing, operations, support, performance improvement and technology. 

 Therefore the business model is more about the mechanics of the business through which the business delivers its products and services and less about what differentiates it in the eyes of customers and gives it a sustainable competitive advantage.

 The business model is not a strategy.  The business model describes, as a system, how the various pieces of the business fit together to produce a profit.  But the business model does not factor in a critical dimension of performance: competition.  This is the job of strategic and operational thinking and planning.  It results in adding to the mechanics of the business model the dynamics of the business model which include: 

• A Customer-Driven Mission
• Core Beliefs and Values
• Vision
• Strategy Positioning Statement
• The Customer Experience Defined and Measured
• Selecting and Orienting Customer-Driven Team Members
• Leading, Managing and Coaching Customer-Driven Team Members
• Implementing Customer-Driven Experiences for Customers
• Getting Feedback and Monitoring the Perceptions of Customers and Team Members

 Strategic thinking and planning, as noted above, differs from operational thinking and planning in the following ways: 

• Strategic thinking and planning fundamentally changes the business model,
• While operational thinking and planning deal with how to do what we already do more efficiently and effectively.

 It must be noted that once a strategic direction is determined, there are most certainly operational implications.

 

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Strategy for a successful business

The Strategy Process

Strategic and Operational Thinking and Planning are grounded in the strategy process.  Over the past 35 years we have designed and implemented the process, to be explained here, in hundreds of companies.  The use of this process has resulted in their being able to establish strategic and operational changes in thinking and execution that have made them more successful in:

• Profit and growth
• Focusing on creating and retaining VERY satisfied and loyal customers,
• Building their brand,
• Improved business and financial planning by the company and the franchisees,
• Acquiring better franchisees,
• Making the operating units more profitable,
• Improved operating systems,
• Improved Training and Development systems and processes,
• Making the field function more productive and profitable,
• Increasing franchisees’ satisfaction and loyalty, and
• Increasing profitability of the parent company and individual franchisees

Why Process Is Important

Process ensures that people are involved.  The more involvement people have in the development of the Strategic and Operational Plan, the more commitment they have to it.  The more commitment they have, the more conviction and passion they have for its achievement.  The more conviction and passion they have for its achievement, the greater the chance they will implement the behavior changes necessary to achieve the results of the plan.  The greater the chance of implementing the necessary behaviors required to achieve the plan’s results, the greater will be the success of the plan.

The Strategic Planning Process

What follows is the process we use, with some modifications, with our clients when facilitating a 3-4 day strategic and operational planning meeting.  You will be able to use this process in conducting your own strategic planning meeting or in providing guidance to a facilitator you might engage for that purpose.

In conclusion, the benefit and value of planning is it provides forethought rather than hindsight.  We always hear the saying, “Hindsight is 20/20”; with Strategic Thinking and Planning, foresight has a greater chance of being 20/20 as well.

 

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