Customer loyalty obviously isn’t important to some… Derek Williams (WOW awards)

Derek Williams, founder of The WOW! Awards for Outstanding Customer Service

Derek Williams

We all know of organisations that don’t care about customer loyalty from their customers.  There are little signals:-

1. The hotel restaurant that cannot serve breakfast to customers arriving at 9.05 am.  “We stop doing breakfasts at 9!”
2. The supermarket where employees are more interested in discussing their night out than they are in serving you.
3. The hotel doorman who ignores the visitor wearing the motorcycle jacket.  “Don’t worry about opening the door for that one.  He’s just a courier!”
4. The coffee shop that can’t switch on the heating even though customers are shivering and putting their coats on.  “The heating is on timed.  We can’t adjust it.  It always takes a long time to warm up.”
5. The bank who records the signatories to an account as either “Mr. D or Mr. P Smith”.  When Mr. D Smith tries to report a stolen credit card over the phone they refuse to speak to him because on their system his name shows as “Mr. D or”.

You will have had experiences like this.  How loyal are you as a customer to organisations that treat you like this?  Would you go back?  Would you recommend them to a friend?  Some of these businesses simply don’t deserve to survive.  And with the downturn continuing to bite, many of them will fail.

But take another look at the examples above.  What do they all have in common?  The restaurant had all the equipment and the food to make breakfasts.  The supermarket had great products and keen prices.  The hotel purported to be one of the best in London.  The coffee shop had air conditioning units that could be easily adjusted to supply warm air.  The bank had the computer systems and the infrastructure.  There are absolutely no complaints about price or product quality.  What they all lacked was one simple thing.  Discretionary effort.

But before you go rushing around looking for discretionary effort, do you really need it?  Ask yourself these three questions:-

1. How competitive is your industry?
2. How hard is it to differentiate what you do from what your competitors do?
3. How much do you depend on repeat business?

If you scored highly on one or more of these questions then how important is loyalty and advocacy?  If you’re still not sure try looking at some of the research:-

• Bain & Co revealed that a 5% improvement in customer retention could add between 25% and 125% to your bottom line.  If you doubt the figures, simply do the calculations for yourself.
• The Strategic Planning Institute found that businesses with good service records were likely to grow twice as quickly as businesses with poor service records.
• Ipsos Mori revealed that 72% of customers could be more loyal if a complaint was resolved to their complete satisfaction than they were before the complaint arose.
• The Empathy Rating Index Company measures empathy as a combination of “how it feels to be a customer” and “how it feels to be processed when interfacing with an organisation”.  They show a very strong correlation between empathy and profitability.

So what is this discretionary effort that might make all the difference?  And where does it come from?

Discretionary effort was what you gave on your first day in a new job.  It’s the thrill of starting in the job that you fought so hard to get – there were lots of other applicants, this was a promotion and a salary increase.  You were keen to get on with your boss and with your colleagues and, most importantly, with your customers.

Discretionary effort was a clean shirt and polished shoes.  A new hair cut and a big smile.  You trimmed your nails and flossed your teeth.  This was the job that you always wanted.  You were determined to do well.

But all of that was on your first day.  Other people soon let you know “this is how things are done around here” and your discretionary effort started to evaporate.  After all, it’s a brave new employee who wants to stand out from the crowd.

Discretionary effort is a culture.  Some organisations nurture it.  Some organisations don’t even know what they are missing.  Here are some key elements for you to consider:-

1. Leadership.  Clear, consistent, cohesive leadership.  A determination to build a great team and achieve great things.  Respect for people.  The nurturing of new ideas and better ways.  Flexibility and fairness.  A set of rules that are clear, easily understood and adhered to.  Integrity.
2. Communication.  Probably the biggest single weakness in most organisations.  No point having great aspirations if nobody knows about them.  And what the leader does may communicate much more than he ever says.
3. Support for people in the front line.  This is where the relationships are won and lost.  Give your people the support the resources and the encouragement to deliver.  Make sure that everyone in your organisation is facing in the same direction – towards your customer.
4. Align the motivators.  If service is truly the most important issue in your business then why reward sales.  If employee attendance is really what matters, find incentives to give up smoking rather than building smoking shelters.
5. Catch people doing things right!

Almost every organisation that I have ever come across since has the same sort of complaints system.  But how many of them have a compliments system?  How many of them are actively catching their people doing things right?  How many are focusing on the things that customers really like and trying to give those customers more of the same?  How many managers really understand all the good things that their people are doing – the discretionary effort?

Consider these alternatives…

1. “Good morning sir.  We were just about to close for breakfast. But please take a seat and I will see what our chef can do for you?”
2. “Some nice ham madam?  Certainly.  Now would you prefer the breaded ham or the honey roast?  By the way have you tried our new range of farm sausages?”
3. “It’s a lovely day for motorcycling.  Would you like to use our cloak room to store your jacket and boots?”
4. “Excuse me, can I just check with you – is it warm enough in here for you?  I can always switch the air conditioning over to warm air if you would like me to.”
5. “We seem to have a little glitch on our system here, Mr Smith.  Can I just ask who all the signatories to the account are and take a few more details from you to confirm your identity?”

Discretionary effort matters.  Let your customers help you to catch people doing things right.

Derek Williams’ is creator of The WOW! Awards – a process for catching people doing things right that is now being used by organisations in the UK, USA and Australia.

Derek is giving a presentation titled “Catching People Doing Things Right!” on the morning of 3rd of April for Jon Penn and Academy Entrepreneurs Board 15.

Derek@TheWowAwards.co.uk

01438 310191