Happy Clients and Happy Employees Precede Referrals

It costs five times more to get a new client than to retain one
Phillip Kotler, Kotler on Marketing

“Recognizing experiences as a distinct economic offering provides the key to future economic growth…to figure out how to better engage clients to turn the service into a memorable event”     Pine & Gilmore

You can’t expect referrals if your service is simply what your client expects (average). That may sound totally obvious but the next two points are not.

There are two BIG problems with doing what you may well be doing now:

1. I hear quite a lot from certain people about their customer satisfaction surveys and how well they have performed on them. Yet these people also get very few referrals. Aiming for customer satisfaction is no longer adequate – for retention or referrals!
In their book Raving Fans, Ken Blanchard and Sheldon Bowles state that satisfied customers are satisfied SHEEP “just parked on your doorstep until something better comes along.” You have to do more than that to keep your clients as repeat business and have them endorse you to others.

Sales guru Jeffrey Gitomer makes an amusing point about what’s most important: would you rather have your spouse be loyal or would you settle for your spouse just being satisfied?!

2. Almost all business people think their customer service is what sets them apart!
Please stop and think about this for a moment. How many times have you ever heard another professional say that’s what makes his or her business better than the competition? This can’t be. So be brutally honest with yourself and ask: is what I do really any different or better? How is it truly better? I suspect that often we tell ourselves that simply because WE show up, it has to be better. That’s like saying the Audobon Society should put each of us on the Endangered Species list because there’s only one of us! What are the key skill areas you need to be strong in and how do you compare to your competition? If you’re not sure, survey your clients. At least interview a few of them.

Blanchard and Bowles argue that ‘wow’ customer service is not a sustainable practice. If someone comes into an insurance agent’s office to make a monthly payment on their car insurance, is it fair to expect the agent to send flowers or a gift certificate in the mail for a steak house? That would be absurd.

They argue that we should strive to meet expectations plus 1%. Tony Allesandro calls it going the extra inch. That is an achievable practice that over time develops ever better service and what they call raving fans. After all, it’s the little things that make a difference, right?

It is worth pausing to ask: how can I improve the service my clients get?

In The Experience Economy, B Joseph Pine and James Gilmore make a great case for sprucing up your office or workplace environment and making it a more pleasurable experience – “a memorable event”. They coin phrases and write about environments that offer ‘eatertainment’ and ‘shoppertainment’. This can include anything from classical music and flowers to works of art/photography and great tasting (and smelling) coffee. Banks and car dealerships are getting in on this act with fireplaces, comfortable seating, fresh-baked cookies, community notice boards, children’s artwork - and it does make a difference and appeal the senses.

A couple of years ago I did a workshop in Massachusetts for a financial advisor and his referral group, other influential professionals in his community. When I saw his office, he had it all: an electronic sign with the names of clients coming in that day, classical music playing in the background, china cups and quality coffee, muffins and cookies in a basket, unique artwork and interesting framed pictures, sports memorabilia signed by well-known coaches and athletes from the Red Sox, Celtics and Patriots, a broad choice of current magazines, and an elaborate aquarium. He also had a high-end follow up system for once a client had visited. There is likely more that I have forgotten. It was remarkable; it made me feel classy and appreciated. And anyone can start this process. He had been in business 25 years and learned about different ideas at different conferences and he had implemented them.

Despite all the wealth of knowledge available today about best business practices, isn’t it bizarre that most of us have LOW expectations as customers? To develop raving fans, Blanchard and Bowles recommend that you:

1. DECIDE WHAT YOU WANT. Create a vision of your business and draw boundaries: you can’t be all things to all people! What would you like to spend more time specializing in? Who are your favorite clients and do they make up a certain demographic?

2. FIND OUT WHAT YOUR CLIENTS WANT (their vision). Does it fit with yours? Use their ideas to help you BUT keep these ideas in line with what YOU do best. Remember: they will not have the big picture that you have, only specific hot buttons.

3. DELIVER THE VISION PLUS 1%. It’s not about under-promising and over-delivering; it’s about CONSISTENTLY meeting expectations and then doing just a little bit more. People do notice whether you follow up promptly or not and when you say you will (one reason they do notice is because most people do not keep their word on what they say they will do and we remember!). It is ALWAYS one of the 5 or 6 things that come up when I ask people why they refer others.

Charles Walgreen, the founder of the Walgreens pharmacy chain described success including customer service as:
“doing a thousand little things the right way – doing many of them over and over again.”

Don’t forget about your employees!
According to Gallup’s Peter Flade; “Employee engagement, at an emotional level, is as crucial to the success of a business as customer engagement.” How come nobody seems to talk about this?

A great example of this was learned thirty years ago by Sam Walton whose employees had a poor reputation for how well they were treating customers. What he learned was that if his managers treated his employees well, the happy employees would then be nicer to the customers who would then have a positive shopping experience. He noted; “the customers will return again and again, and that is where the real profit in this business lies.” It was an innovative way to gauge customer satisfaction that proved very effective. And it all started at the top.

Advantages also include employees who are more productive, who stay with your company longer, are absent less, and who have a higher safety record. All of which also means lower training and replacement expenses for you.

Sean, one of the sales managers I currently coach to get referrals for recruiting prospects, has started taking one of his reps out for a beer each week. It has been a huge success. He asks them to block out two hours. The bulk of the meeting is focused on how they are doing and how he can help them improve in their business. He takes on the role of coach so he offers support, accountability, and direction on what they are not seeing about their performance. The atmosphere is more relaxed and conducive to more open dialogue which means making an emotional connection away from the hustle of the office, the multiple phone calls and sales appointments. It’s a distraction-free environment (unless the waitress or waiter is cute!) where it is easier to show that he truly cares.

And there is a win for Sean. His reps are expected to come with three referrals for him (he aims high and they average one quality referral each time). The win for the reps is that they can take on a leadership role in helping the person they recommend succeed because they know they are bringing that person onto a winning team. Sean has created his own additional rewards as well after asking his reps what else would motivate them.

Strong customer (and employee) service is a must in order to earn the right to ask for referrals and to expect them.

“The new economy is described by some commentators as a relationship economy. Why? Because customers don’t just want a great price or a fast delivery, they also want a good experience.”               Robert Holden

“The best things in life are not things.”
          Anon.

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