The NPS Entrepreneur

Posted on November 13, 2022 by anentrepreneurswords

Every entrepreneur understands how critical it is to take care of the customer – that’s old hat. We know that unhappy customers will cause our businesses to suffer. This fact has been magnified by social media and how a few damaging reviews can really cause severe and long-term problems. If your organization is like ours, you regularly send out customer satisfaction surveys. Much time is spent parsing the verbiage and trying to determine exactly the right questions to ask. All this is fine and good – we need to ask several questions to better understand who our customers really are and what they prefer. But how do we get an overall handle on exactly what our customers think about us and our product(s)? Enter the NPS.

OK, you are probably wondering what NPS means. It stands for Net Promoter Score and is a tool that measures customer loyalty. The Net Promoter Score was developed in 2003 by Fred Reichheld, the private equity firm Bain and Company and Satmetrix (and is also a registered trademark of these individuals and companies). It is based upon the theory that our customers are either detractors or promoters. A detractor is unhappy to the point that they can drive away other customers. Promoters do just the opposite. The NPS is calculated based upon the response of a single question, “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?” The numerical answers to this question become an index ranging from -100 to +100. A raw score of six or less puts the respondent in the Detractor category. Passives are those who give a score of seven or eight. And Promoters give a score of nine or ten. The NPS is calculated by subtracting the percentage of Detractor respondents from the percentage of Promoter respondents (Passives are disregarded). Generally, an NPS of +50 or greater is considered outstanding.

In January 2018, our companies implemented the NPS. It’s fascinating how focused we have become on trying to move the number. Incentive compensation plans can be tailored to include the NPS – especially for team members who are able to greatly influence customer satisfaction. What we’ve learned is how very important it is to have as large a survey response as possible. Sending out 500 surveys and generating 15 responses that lead to an NPS of +60 may be very misleading. Smart companies have figured out techniques to boost the number of responses including drawings for prizes and continuous follow-up with the customer until a response is rendered.

For the NPS to be most effective, customers need to be identified when responding to a survey. This does present a bit of a dilemma as some customers are reluctant to share their true feelings when a survey is not anonymous. But the value of being able to follow-up and resolve issues that may have been encountered by the customer is well worth the extra effort to solicit responses for non-anonymous surveys. The goal is to ultimately convert Detractors and Passives into Promoters.

Hundreds of large companies including Delta Airlines, Southwest Airlines, Citigroup, Best Buy, Sony, GE, Apple, American Express, Four Seasons Hotels and AT&T are using the NPS. A large percentage of entrepreneurs with whom I’ve spoken are unfamiliar with NPS. Having a universal methodology to measure customer satisfaction and enable “closing the loop” with the customer does not have to be limited to the big boys in the business world. And software is available that can help take the NPS question from survey results and calculate a running score.

This is a new journey for us and we’re still working to get “buy-in” from all our team members. One of the advantages of NPS implementation is that everyone can see the difference they make – positive or negative – with customer satisfaction. If the product is defective, the bathroom in the store is dirty, or the service is sloppy – all can show up in the survey results. The “weak link” in the chain may drag down the score from nine or ten to a six. We expect accountability from peer pressure will improve over the next few months and years.

Our customers are the lifeblood of our businesses. We can become more precise at measuring their satisfaction with our products and services by utilizing the Net Promoter Score.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Social Media Savvy Entrepreneur

Posted on September 19, 2021 by anentrepreneurswords

In the old days if a product was lousy, it was hard to get the word out to the public. Short of taking out a full-page ad in the newspaper or standing in front of a store handing out flyers, there really wasn’t an effective way to inform unsuspecting customers about a flawed product or terrible service. Social media has changed all of that in a good way for the most part.

Do you ever read online product reviews? Smart companies give customers the chance to rate a product or service and write a short statement about their experience. And smart companies constantly monitor the ratings and reviews and take immediate action to resolve issues as they arise. I don’t know about you, but I have been paying more attention to ratings and reviews when I make purchases on Amazon and in other internet stores. Social media provides entrepreneurs with a terrific opportunity to “up their game” so to speak. Failure to deliver top quality or resolve customer problems can have severe consequences. In an instant the whole world can learn about a bad experience. And when too many bad experiences are chronicled online, an entrepreneur can lose business in a big way.

I purchased a battery-operated handheld drink mixer for use in mixing a supplement I take daily. The device worked quite well for a few weeks. And then it became temperamental and would only work intermittently. Eventually it stopped working altogether. I had tossed the packaging, so I wasn’t sure how to contact the manufacturer. The easiest thing was to simply post a review on the website from which I had purchased the item. I stated that the product was flawed and presented the facts about my experience.

Within 20 minutes of the post, I received an e-mail from the owner of the manufacturer. He expressed genuine concern that I wasn’t satisfied and said he would send me a full refund, send a replacement item, or provide tips on how I could get the unit to work properly. Apparently, my issue was fairly common, and the fix was relatively simple. I liked the mixer and told him I’d take him up on his tips which he quickly sent to me. He also reminded me that his product had a lifetime warranty. I was able to use his tips to get the mixer working properly and have been able to keep it running ever since. I quickly wrote an updated review congratulating this gentleman on his customer focus and endorsed his product.

This entrepreneur did it right. He smartly monitored his reviews. When he saw a negative one, he quickly reached out to his customer with the singular objective of doing whatever it took to make the customer (me) happy. There was never any hint of defensiveness in his responses. His lifetime guarantee is impressive. What he did was turn a potential disaster (bad review) into a stroke of brilliance by getting a positive re-write of my review – by the way, he never suggested that I do this. Better yet, the way I re-wrote the review recounted my initial dissatisfaction and all that the owner did to resolve my issue. Potential customers reading my review should take comfort in knowing that this entrepreneur stands behind his product and only wants his customers to be totally satisfied.

No matter how hard we try, things can go wrong. Stuff breaks. Customers can be cranky. Social media has created an environment where we are very vulnerable as entrepreneurs. Committing to move with lightning speed and doing whatever it takes to ensure total customer satisfaction will help keep us out of the ditch. The Pony Express days of customer service are over. This is as it should be.

The Swivel Headed Entrepreneur

Posted on April 4, 2021 by anentrepreneurswords

A good pilot has his head on a swivel. He is constantly scanning his instrument panel as well as the skies around him. There may be other airplanes in the immediate area to avoid. Maybe there are TV towers or smokestacks to miss. Engine performance gauges must be monitored, and navigational displays are critical to comprehend. All of this can be summarized in two words . . . situational awareness. Without situational awareness we are more vulnerable to physical dangers around us. A lack of it can result in an auto accident, stepping off a curb and breaking an ankle, or starting a fire when the grill is too close to the house.

In the entrepreneurial world, situational awareness is worth its weight in gold. Now, you may be wondering how this concept applies to business situations. It has less to do with physical proximity and more to do with possessing a sixth sense about a multitude of factors. As entrepreneurs we can attain a much higher degree of success as we develop our entrepreneurial awareness. For example, how well do we sense what is happening in our marketplace? There is more to this than just crunching numbers. The key is to look behind the empirical data and understand what is truly happening. Here is a simplistic illustration. A quick look at market share might show that our firm is way out in front of the competition. And yet, we know that a start-up company has won three of the last five contracts for which we have competed. Not enough to move the market share needle but could signal trouble down the road. Situational awareness would have us take immediate action to understand why they are winning, and we are losing, and then do something about it.

Situational awareness from an entrepreneurial perspective involves a deep understanding of our customers and what makes them tick. Customer satisfaction surveys help in this regard, but we may need more than data. In person meetings are the best bet for getting a good read on our customers. If not in person, the next best option is a phone conference. At the root, we are looking for little tells that might indicate whether our customers are 100% in our camp. We encountered a situation a few years ago where we thought our client was totally satisfied with our services. Our team was convinced that we had performed as well as or better than expected. And yet, I had a gnawing feeling that something was amiss. When we dug in deeper, we learned that the client was hiring a competitor. The reason had nothing to do with our performance and everything to do with the fact that a corporate decision had been made to consolidate its business to a national company. I have always wondered whether we might have saved the business by doing some things in a radically different manner had our situational awareness enabled us to act sooner.

Finally, we must keep our finger on the pulse of our team. Are we on the lookout for signs of tension, boredom, or anxiety? It is easy to get caught up in the day-to-day chaos that we all experience and miss the signals that are flashing relative to our team. Perhaps an outgoing team member who normally participates in company activities gradually pulls back and is less gregarious. Without situational awareness, we could easily overlook that this individual is headed for the exits until it is too late. Realizing this sooner might have given us a chance of resolving whatever issue is causing our teammate to look elsewhere.

Situational awareness at the entrepreneurial level requires a certain degree of intuition. But even more important is our being intentional about having a deeper understanding of that which is happening around us. Then we are less likely to unwittingly step off the cliff and into the abyss.

The Fulfillment-Focused Entrepreneur

Posted on August 16, 2020 by anentrepreneurswords

I don’t want our customers to be satisfied. Put another way, customer satisfaction is not our objective. I also don’t want our team members to be satisfied. There, I have said it. I will bet you are thinking that there is a punchline somewhere in all of this. And yes, there is. But let’s dig a bit deeper before getting to the bottom line.

When we serve others, we certainly want them to be satisfied – right? This seems like a perfectly rational objective because we all know what happens when a customer or team member is dissatisfied. So, when a customer (or team member) makes a request, we do our best to satisfy that request. We generally believe that when someone is satisfied, they are happy. Here is an interesting dilemma. Suppose we have done everything we can to satisfy our customer; they tell us they are happy, but then they quit anyway. What is up with that?

One of our companies is involved in managing apartment properties for our own account and for third-party clients as well. I can remember several times over the past many years that a long-time client told us he was perfectly satisfied with our service, only to make a change and hire another firm. We were assured that we had done nothing wrong and other circumstances stimulated the change. In some cases, the client was consolidating the management of all his properties with a national property management firm. In another instance we were told that the client had a relationship with another company and though he was satisfied with our performance, he thought he might do better with the other firm. Naturally, there is a strong level of disappointment when we hear that someone is satisfied and yet they are still making a change. What in the world are we to do?

OK, here comes the punchline. Customer satisfaction is not enough. Team member satisfaction is not enough. Customers and team members leave even when they are completely satisfied. Attempting to achieve customer and team member satisfaction is a siren song that will lure us into the rocks and sink our ship. Instead, we need to focus on fulfillment. Fulfillment is a much higher state than satisfaction. It is a concept that is like exceeding expectations but is even more than that. Trust me – you will not get any help from the dictionary on this one. It says that to fulfill is to satisfy. I think the dictionary’s definition misses a very important nuance here.

Suppose an apartment resident calls and reports that her kitchen faucet is dripping. If our maintenance technician goes to her apartment and completes the repair, then he has satisfied her request. However, if he goes and fixes the faucet, and then checks several other physical elements in her apartment and fixes other items that he finds, then we are moving toward a level of fulfillment for the customer. Total fulfillment comes when there is nothing else a customer could possibly want or need, even if he or she has not articulated it. In other words, we have anticipated every possible scenario that could impact the customer and we have taken all the steps we could to resolve unforeseen issues and create an over-the-top experience. This was what was missing when we lost a client who told us he was satisfied. We had not gone above and beyond to create the over-the-top experience that achieved total fulfillment.

Customers and team members leave or quit all the time when they are satisfied. Usually it is because they are not aware of a better alternative. But when that better mousetrap is presented to them it is not hard to understand their motivation for making a change. Changing our focus from satisfaction to fulfillment increases the odds in our favor that we possess the better mousetrap.

Achieving fulfillment for our customers and team members requires a combination of commitment, innovation, understanding, vigilance, appreciation, and gratitude. Fulfillment is the best mousetrap in today’s highly competitive entrepreneurial environment.

This blog is being written in tandem with my book, “An Entrepreneur’s Words to Live By,” available on Amazon.com in paperback and Kindle (My Book), as well as being available in all of the other major eBook formats.

The Customer-Centric Entrepreneur

Posted on January 26, 2020 by anentrepreneurswords

Way back in the olden days I can envision a prehistoric man trapping a small animal of some variety and trading it to another prehistoric man for a new spear. And at that precise moment in time, the first entrepreneur and the first customer were born. Now suppose that this first entrepreneur continued to trap small animals and trade them to other “customers” for the basic necessities that they could provide. This economy worked reasonably well until something happened. Another prehistoric man decided to do his own trapping and he too made his “product” available for trade. But a funny thing occurred. He was willing to trade it for something of less value than the first entrepreneur. So “customers” flocked to him leaving the first entrepreneur with “unsold” “inventory.” And thus, competition was born.

Ever since the earliest days of commerce, entrepreneurs have developed a rudimentary understanding of their customers. More recently, highly sophisticated techniques and technologies have been created to aid with this customer understanding. Yet still, a vast number of businesses do not truly have the depth of customer knowledge that is necessary to consistently win. How could this possibly be considering the amazing advances that have been made since prehistoric days? The answer is relatively simple. Many entrepreneurs have not chosen to make their customers the absolute primary focus of their business. Much time and effort are spent improving processes, creating systems, increasing productivity, cutting costs, managing revenue and a host of other business practices. There’s no question that all of this is necessary. But from where does it emanate? If it starts with the bottom line instead of with the customer, the road may be rocky.

A customer-centric business starts with the basic question, “How well do I really know my customer?” Most of us think we have a pretty good idea who our customers are and what makes them tick. But I’m willing to bet that we probably have only scratched the surface with respect to the depth of our customer knowledge. Do we know the stratification of age cohorts across our product and service offerings? That’s an easy one. Do we understand the subtle preferences, needs and desires of these different age groups? Have we spent much time fine tuning our products and services to address this information? Oh sure, we perform ongoing customer surveys. But often they are designed to determine whether our customers are satisfied with our products and services. How much survey work do we do to get to know our customers better? We suspect that live customer focus groups might provide some valuable insights, but we believe that this approach is too expensive, something left to big corporations or we have no idea how to go about implementing such focus groups.

I submit that we all need to step back and take a deep breath. Then we need to pull together our team and begin to examine just how we are going about a deep dive into customer understanding. I’m championing this effort in my own companies and believe that it may dramatically transform our product and service offerings. Big Data is a treasure trove in this regard. We’ll be combining extensive demographic studies with customer focus groups, surveys and other initiatives to know for certain that we absolutely understand exactly what our customers need and want. We are looking for more than just what our customers tell us, however. Big Data will help us go beyond the obvious and identify the buying habits and other trends with our customers that might not be readily apparent. And then with the customer front-and-center, we’ll make sure that our products and services precisely meet those needs and wants – stated and unstated.

Developing a deep understanding of what our customers really want and need, will help us create more customer-centric organizations. Then we are able to align our products and services with this customer focus that will manifest in high levels of customer satisfaction and greater profitability for our enterprises.

Four Customer No-No’s

Posted on October 13, 2019 by anentrepreneurswords

Once upon a time there were entrepreneurs who cared about their customers. They understood what it took to make their customers happy and keep them coming back. Then their businesses grew and grew until one day they weren’t small anymore. Instead they became large behemoths that cared less about the customers and more about bureaucracy, CYA, policy and how to squeeze more dollars out of their customers. In the process, a number of their customers had experiences that were unacceptable and downright maddening. In this blog, I would like to relate several stories about encounters I’ve had as a customer of several larger companies. The names of the companies are irrelevant. What is instructive are the lessons we can learn as entrepreneurs and especially what we don’t want to emulate.

Let’s start with the airlines. The large domestic carriers are consistently stepping in it with their customers. One summer we made flight reservations on a major airline and then a few weeks later needed to change one leg of the flight. The airline’s website was impossible to negotiate to figure out how to make such a change. So, I called the customer service line and got into the queue. Thirty minutes later they called back and were ready to assist me. I was informed that because I had a “special” fare, I would have to pay the difference of $173 plus a $200 change fee. I protested and pointed out that the special fare was still being advertised on the flight to which I was changing. And I also said that I found it unreasonable to charge a $200 change fee for a couple of minutes of re-booking. The representative wouldn’t budge. I said that I would leave the original reservation in place and in the future, find another airline to fly with friendlier policies. The “haughty” young man representing the airline said, “All of the legacy carriers are charging the $200 change fee.” Wow! Of course we know this is true, but a statement like this sounds like blatant collusion. The message to me, the customer was, “We’re going to screw you and so are the other major airlines.” Lesson #1: Never use the “everyone else is doing it” explanation when interacting with a customer.

My wife and I were in Washington, DC and made reservations for dinner at a major national steakhouse chain. It was a Tuesday evening and when we placed our order we naturally wanted – you got it – steak. Well, steak wasn’t an option at this restaurant. They were out of every cut of beef with the exception of a low-end sirloin. When I spoke to the assistant manager, she said that there had been a delivery issue. Seriously? They do have grocery stores and meat markets in Washington, DC. My entrepreneurial instincts caused me to wonder why someone hadn’t simply gone to the store and purchased enough steaks to cover until the delivery arrived. I’ve been to other restaurants where the server or the manager has literally made a mad dash to the store and purchased something I wanted, and they didn’t have. Lesson #2: Never tell a customer “we’re out of that.” Do whatever it takes to ensure that the customer gets what he or she wants.

Here’s a classic. A national chain store closes at 8:00 PM. I arrive at exactly 8:00 PM. What do you suppose happens next? The store manager won’t allow me to enter and says, “Sorry, we’re closed.” So here I am, a ready, willing and able customer and the store representative doesn’t want to serve me. Adding insult to injury, I’m told to come back the next day when they reopen at 9:00 AM. But what if that’s not convenient for me? In this case it’s apparently more important to avoid inconveniencing the store employees than the customers. Lesson #3: Always remain open for business until the last customer leaves. And if someone else wants to enter and it’s after hours, by all means accommodate him or her.

Finally, here’s another one that I’m sure will sound familiar. I made an appointment for an MRI at a large chain of imaging centers. I arrived 15 minutes early to make sure that all the paperwork was completed prior to my appointment time. Then I waited, and waited, and waited. About 20 minutes after my appointed time I asked once how long it would be and was told, “We should get to you soon.” After another 15 minutes I inquired again and the receptionist said in exasperation, “Sir, I have no idea how long it will be before we will get to you.” I left. Lesson #4: Never tell a customer that you have no idea when he or she will receive service.

As our businesses grow it’s critical that we amplify our efforts to maintain customer focus even if it costs extra to do so. The additional investment will more than payoff when our happy customers continue to return and refer other customers to us as well.

Chronic Uh-Ohs

Posted on December 16, 2018 by anentrepreneurswords

Have you ever had a chronic issue that simply couldn’t be resolved in a cost effective manner? In fact, maybe there isn’t any sort of solution at all. What do you do – especially if the situation has a negative impact on customer satisfaction? Here’s an example of what we encountered on one of our apartment communities. In this particular case, there is an issue with our water supply lines. Very simply – they break a lot. When this happens, apartments flood; sheetrock is damaged; carpet is destroyed, and residents are inconvenienced. We’ve spent huge sums of money to clean up the aftermath and have looked for every way possible to prevent the problem in the first place. Unfortunately, the piping material is flawed and short of re-piping the property, there isn’t another solution. And re-piping could run into the millions of dollars, so it’s just not an option.

The impact that this issue has had on our team and our residents has been profound. We’ve lost staff over this problem. A number of residents have moved out. Our team is weary of dealing with a challenge they cannot solve. Unfortunately there’s a lot of negativity on display among our team members. This negative energy feeds on itself and everyone holds their breath each day hoping that the phone doesn’t ring with more bad news.

But all is not lost because there is something we can do. We can (and must) take a chronic situation like our pipe-break dilemma and turn it into a positive. We accept the fact that we are going to have pipes break from time-to-time. Acceptance is the first step in this process. For far too long we’ve operated in a state of denial. But this doesn’t have to be. Knowing that this problem will persist, we next amass as much data as we can generate and continually pore over it, looking for patterns or any other key elements that might help us identify where the next break might happen. Is there a particular location in the piping runs where most breaks occur? Does temperature or water pressure play a role? We obviously focus on higher level units first since breaks on those floors can wreak more havoc than a first floor apartment. Ultimately we take whatever proactive steps we can to prevent the breaks – even to the extent of making some repairs before a break occurs.

The next part of this turn-the-negative-into-a-positive process can actually be fun. We develop a comprehensive plan for how we are going to create a wonderful experience for our residents when a pipe breaks and their apartment floods. Sounds crazy – right? How could anyone think wet carpet and water coming through the ceiling is a “wonderful experience?” But here’s how we make it happen. We mobilize our clean-up and repair team that is highly trained to deal with issues like this. We communicate clearly and often. We do everything in our power to minimize the inconvenience to the resident. Knowing that we are going to have a certain vacancy factor built into our financial model, we take a few vacant apartments and fully furnish and equip them with all of the comforts of home. When a flood occurs, our team quickly moves clothing and other necessary items for the resident(s) affected, into one of the furnished units. We treat them to a nice dinner out and provide them with gift baskets. Perhaps we’ll even offer them movie tickets or send them to an amusement park. In other words, we try to create a positive experience for them that they might not otherwise enjoy. Meanwhile, our team is working fast and furiously to repair the leak, clean and sanitize the carpet, repair the sheetrock and put the apartment back the way it was before the flood. Then, as quickly as possible, we move the resident back into their original apartment. And I can’t emphasize enough the need for clear and constant communications.

Probably the most critical aspect of dealing with chronic problems like I’ve described is the mindset of the team. If the attitude is negative – we’re doomed from the start. When we look for creative ways to “wow” the customer, we can create goodwill AND it can be exciting and stimulating for our team. No, the problem doesn’t go away and coping with it may still be costly. But when our team finds a way to turn a negative into a positive for the customer – we will experience even greater levels of success than we might have otherwise.

You can also listen to a weekly audio podcast of my blog. What you hear will be different than what you read in this blog. Subscribe on iTunes or wherever you get your podcasts. You can also click on this link – Click here to listen to Audio Episode 123 – Who Is This Murphy Guy?

Flooded vintage interior. 3d concept

Sinful Service

Posted on September 30, 2018 by anentrepreneurswords

Customers are the lifeblood of an entrepreneurship. And yet, many entrepreneurs have or condone a rather cavalier attitude about their customers. I’ve written before about the Net Promoter Score (NPS) which is one of the best measures of customer satisfaction. A poor NPS is a pretty good indication that something has gone awry with how customers are being treated. Comcast has a -5 NPS. Bank of America and Honda USA have an NPS of zero. By contrast the NPS for Amazon is +62 and for Apple it’s +72. For more information on the NPS, link to https://en.wikipedia.org/wiki/Net_Promoter.

There are several surefire ways to drive down a Net Promoter Score. Explained another way – there are a number of errors that are made that drive away customers. Let’s look at a few sinful service flubs that are all too common.

It’s not my job. I’m sure we’ve all encountered someone who tells us this. The implication is that this person really could care less about me as a customer. It’s more important to him or her to color inside the lines and take no responsibility for helping me with the bigger picture. By contrast, I’m pleased to report that I recently visited a Bed Bath & Beyond store and asked a salesperson where to find a certain obscure product. Not only did she tell me exactly where it was, but she escorted me across the store and helped me find the right item. Maybe that’s why Bed Bath has a +44 NPS!
I’m going to give you the royal runaround. The “it’s not my job” approach leads to a far worse malady called, “the royal runaround.” This happens to me frequently when I’m calling a customer help line. First, I have to spend several minutes punching my way through the automated attendant to eventually get to the right person. I don’t know about you, but when I call for service, I don’t want to listen to a recording. I want to talk with a live person. Sometimes when I finally succeed in this quest, the person is friendly and solves my problem immediately. But in other instances the person may tell me that he or she can’t help me and I need to be transferred to another department thereby increasing the chances of being disconnected, or finding out that the next person is also going to shuffle me to still someone else.
I’m just following policy. This one is just lovely. We try to understand why the defective item we purchased at a particular store cannot be returned to that store, but instead must be sent directly to the manufacturer. “I didn’t buy the item directly from the manufacturer; I bought it from your store,” I explain. “That’s just our policy and there’s nothing I can do about it” I’m told by the customer “service” representative at the store. Makes me wonder why I need to pay a mark-up to the middleman if I’m going to have to deal with the manufacturer when the product fails.
My job sucks and I’m going to treat you like dirt (or worse). It’s easy to tell when someone who interacts with the public hates their job. I once had an encounter with a person who worked for a large company. I went to the office of this company and was ushered into an inner waiting area. The person I was to meet was sitting at a desk across the waiting room. She had a permanent scowl on her face and refused to acknowledge me. She fiddled around with a variety of menial tasks and finally at ten minutes after my appointment time she motioned me over. Not once did she make eye contact. She asked a couple of perfunctory questions; stamped a piece of paper, and shoved it back across the desk without saying a word. Her loathing of her job was palpable.
I may be smiling, but I’m still lying to you. This is pure poison. When a customer can no longer trust the company with whom he or she is dealing, then all is lost. Here’s the scenario. We are talking with a customer service representative for a consumer products company. We’ve had an issue with one of their products. The representative is most pleasant and assures us that the issue will be resolved immediately. Days pass with no resolution. We speak with the representative again and are told that the problem is being resolved. More time passes – still no resolution. Finally we speak with a different representative and learn that there is no resolution and never was to have been. We were fed a pack of lies from the very beginning.

As we grow our entrepreneurial endeavors, we must be ever vigilant to ensure that our customers are completely satisfied and we avoid the pitfalls of sinful service.

The NPS and You

Posted on March 18, 2018 by anentrepreneurswords

Every entrepreneur understands how critical it is to take care of the customer – that’s old hat. We know that unhappy customers will cause our businesses to suffer. This fact has been magnified by social media and how a few damaging reviews can really cause severe and long-term problems. If your organization is like ours, you are regularly sending out customer satisfaction surveys. Much time is spent parsing the verbiage and trying to determine exactly the right questions to ask. All this is fine and good – we need to ask a number of questions to better understand who our customers really are and what they prefer. But how do we get an overall handle on exactly what our customers think about us and our product(s)? Enter the NPS.

OK, you are probably wondering what NPS means. It stands for Net Promoter Score and is a tool that measures customer loyalty. The Net Promoter Score was developed in 2003 by Fred Reichheld, the private equity firm Bain and Company and Satmetrix (and is also a registered trademark of these individuals and companies). It is based upon the theory that our customers are either detractors or promoters. A detractor is someone who is unhappy to the point that they can drive away other customers. Promoters do just the opposite. The NPS is calculated based upon the response of a single question, “On a scale of 0 to 10, how likely are you to recommend this company’s product or service to a friend or a colleague?” The numerical answers to this question become an index ranging from -100 to +100. A raw score of six or less puts the respondent in the Detractor category. Passives are those who give a score of seven or eight. And Promoters give a score of nine or ten. The NPS is calculated by subtracting the percentage of Detractor respondents from the percentage of Promoter respondents (Passives are disregarded). Generally, an NPS of +50 or greater is considered outstanding.

In January 2018, our companies implemented the NPS. It’s fascinating how focused we have become on trying to move the number. Incentive compensation plans can be tailored to include the NPS – especially for team members who are in a position to greatly influence customer satisfaction. What we’ve learned is how very important it is to have as large a survey response as possible. Sending out 500 surveys and generating 15 responses that lead to an NPS of +60 may be very misleading. Smart companies have figured out techniques to boost the number of responses including drawings for prizes and continuous follow-up with the customer until a response is rendered.

Hundreds of large companies including Delta Airlines, Southwest Airlines, Citigroup, Best Buy, Sony, GE, Apple, American Express, Four Seasons Hotels and AT&T are using the NPS. A large percentage of entrepreneurs with whom I’ve spoken are unfamiliar with NPS. Having a universal methodology to measure customer satisfaction and enable “closing the loop” with the customer does not have to be limited to the big boys in the business world. And, software is available that can help take the NPS question from survey results and calculate a running score.

This is a new journey for us and we’re still working to get “buy-in” from all of our team members. One of the advantages of NPS implementation is that everyone can see the difference they make – positive or negative – with customer satisfaction. If the product is defective; the bathroom in the store is dirty, or the service is sloppy – all can show up in the survey results. The “weak link” in the chain may drag down the score from nine or ten to a six. We expect accountability from peer pressure will improve over the next few months and years.

Our customers are the lifeblood of our businesses. We can become more precise at measuring their satisfaction with our products and services by utilizing the Net Promoter Score.

Go Away – We’re Closed

Posted on September 11, 2016 by anentrepreneurswords

Let’s start with the airlines. The large domestic carriers are consistently stepping in it with their customers. One summer we made flight reservations on a major airline and then a few weeks later needed to change one leg of the flight. The airline’s website was impossible to negotiate to figure out how to make such a change. So I called the customer service line and got into the queue. Thirty minutes later they called back and were ready to assist me. I was informed that because I had a “special” fare, I would have to pay the difference of $173 plus a $200 change fee. I protested and pointed out that the special fare was still being advertised on the flight to which I was changing. And I also said that I found it unreasonable to charge a $200 change fee for a couple of minutes of re-booking. The representative wouldn’t budge. I said that I would leave the original reservation in place and in the future, find another airline to fly with friendlier policies. The “haughty” young man representing the airline said, “All of the legacy carriers are charging the $200 change fee.” Wow! Of course we know this is true, but a statement like this sounds like blatant collusion. The message to me, the customer was, “We’re going to screw you and so are the other major airlines.” Lesson #1: Never use the “everyone else is doing it” explanation when interacting with a customer.

My wife and I were in Washington, DC and made reservations for dinner at a major national steakhouse chain. It was a Tuesday evening and when we placed our order we naturally wanted – you got it – steak. Well, steak wasn’t an option at this restaurant. They were out of every cut of beef with the exception of a low-end sirloin. When I spoke to the assistant manager she said that there had been a delivery issue. Seriously? They do have grocery stores and meat markets in Washington, DC. My entrepreneurial instincts caused me to wonder why someone hadn’t simply gone to the store and purchased enough steaks to cover until the delivery arrived. I’ve been to other restaurants where the server or the manager has literally made a mad dash to the store and purchased something I wanted and they didn’t have. Lesson #2: Never tell a customer “we’re out of that.” Do whatever it takes to ensure that the customer gets what he or she wants.

As our businesses grow it’s critical that we make amplify our efforts to maintain customer focus even if it costs extra to do so. The additional investment will more than payoff when our happy customers continue to return and refer other customers to us as well.

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