Amaze Every Customer Every Time

by Shep Hyken

  YOUR AMAZEMENT TOOLBOX

  Moments of Misery leave clues. Moments of Magic leave clues. Look for the root causes of both experiences, and learn!

  Learn from your happy customers, especially if they are willing to tell you their story, so you can repeat it with others.

  We can learn as much from our Moments of Magic as we can from our Moments of Misery—if not more.

  THE DRILL

  What is the most important lesson you have learned from a happy customer?

  What is the most important lesson you have learned from an unhappy customer?

  BEFRIEND THE COMPETITION

  * * *

  Keep your friends close and your enemies closer.

  THIS FAMOUS PIECE OF ADVICE is commonly attributed to Michael Corleone in The Godfather, Part II, and is an excellent business strategy, even if the original quote comes from Niccolò Machiavelli, who wrote The Prince.

  Whoever said it, the point is that you can learn a lot from your competition. And you should! Too many companies make the mistake of turning their competitors into “bad guys.” They get into the habit of assuming that everything the competition does is driven by some kind of bad intent. Sure, they want to be successful, and that may mean taking some of your customers and stealing away market share. However, the problem with persistently labeling your competition as the villain is that once you do, it becomes harder to pick up information you need about them that will help you compete.

  Keeping a sense of perspective and an open mind about what the competition is doing can help you be a much more effective competitor in the marketplace. In my business of speaking, training, and consulting on customer service, there are many prominent and worthy competitors.

  Do I try to avoid them? No. Do I see them as my enemy? No. On the contrary, I see them on a regular basis at conventions. I call them to meet for dinner if I’m in their city. I exchange ideas on how to be more successful in the business. We may be competitors, but we recognize and believe what Cavett Robert, the founder of the National Speakers Association, once said:

  Don’t worry about how we divide up the pie; there is enough for everybody. Let’s just build a bigger pie!

  One way or another, our competition is going to get their slice of the pie. So what can we do to keep them from making our slice smaller—or worse, making it disappear?

  Everyone deserves a slice of the pie. Why not make the pie bigger? Sean Curry, an Ace Hardware store owner in Boston, recognizes the value of the fact that he can’t avoid competition. He can walk out of his store and look either direction and see the competition—a big-box home improvement store to his right, and another big-box home improvement store to his left! Some people might think that two major competitors could put Sean’s store out of business. After all, they are huge compared to Sean’s small store. They outspend Sean in advertising by 20 to 30 times.

  So, what did Sean do? He asked the other stores’ managers out to lunch. He wanted to introduce himself, welcome them to the neighborhood, and talk about how they could work together.

  He wanted to find out what he could stock that they didn’t, and vice versa. He offered to send customers to their stores, if appropriate. They offered to do the same!

  The concept of building a friendly relationship with your competitors is a sound one. Sean gets customer referrals from both stores. He knows their shortcomings, and he recognizes how he can capitalize on them. He knows his strengths and makes sure he can exploit them. By keeping the lines of communication open, he not only competes with but also flourishes next to these much larger competitors.

  The more information you have about what the other guys are doing, the better the job you can do for your own customers. Not only that, understanding what the other guys do well in the marketplace is essential if you want to continue improving on what you do well in the marketplace. (See Tool #8: You Can’t Be Good at Everything.)

  John Venhuizen, Ace’s CEO, told me: “We never put down the ‘big box’ players in our industry. They are great retailers, and we are the first to acknowledge that. We also know, though, that one of the things that makes them great is their bigness. They’re huge. Because they are huge, the service and the convenience tend to be weaknesses in the experience they offer to the consumer. Knowing their strengths and weaknesses in the marketplace reminds us where we can be strong. We’re smaller, we’re speedier, we’re a more integral part of the community, and of course we’re more helpful. Every time we look at a ‘big box’ store, we get a reminder that we’re local and loyal, which is right where we want to be and where we ought to be.”

  YOUR AMAZEMENT TOOLBOX

  Don’t demonize your competition. Learn what they do best. Knowing about your competition can make you a better competitor.

  Know your competition’s shortcomings and capitalize on them. Know your strengths and exploit them.

  Consider taking the competition out to lunch.

  Use what you know about your competition to differentiate the experience you deliver to the consumer in the marketplace.

  Let your research on what the competition does best remind you of what you do best.

  THE DRILL

  How do your company’s strengths differ from those of your competitors? Do these strengths give you an advantage that generates referrals from competitors?

  For managers: How much do you know about your direct competition? How could you find out more?

  ADAPT OR DIE

  * * *

  Listen to your customers … and learn what changes they expect.

  WHAT WOULD YOU THINK of a supermarket that refused to take a debit card … because there had been no such thing as a debit card when the store was founded, 50 years ago? “Cash only, please!”

  What would you think of a consultant who chooses not to communicate with his clients via email … because email didn’t exist when he graduated from college back in the ’80s? “Hey, watch your postal deliveries carefully over the next few days; I just sent you a detailed report, via First Class Mail, about that time-sensitive business problem that you paid me to look at. Drop me a postcard once you’ve had the chance to look it over. I’ll write you back, and then we can schedule a meeting.”

  What would you think of a start-up business that wants to build up a national following rapidly … without setting up a website or any kind of social media presence? “Internet, schminternet. My dad launched his business without any of this online stuff, and I don’t need anything like that for my business, either. If people want to find out about us, they can call our toll-free line or look at the brochures we’re printing.”

  I know what I’d think about each of these businesses. I’d be wondering how closely they’d really been listening to their customers. And I’d also wonder how much longer they could expect to stay in business—if they didn’t adapt.

  You might laugh at these examples, but the truth is, for some it can be very hard to admit that times have changed, and that our responsibilities to the customer have changed too. That’s especially true when we’ve grown used to doing things a certain way. Sometimes, we build up a preconceived notion of how something should work. We may think, “Hey, we’ve always done it that way. Why fix something that isn’t broken?” But we don’t always stop to ask ourselves, “How does the customer want to do it?” And we don’t always take the essential step of listening to customers when they tell us how they want to do something.

  Case in point: Virtual (online) complaints that mention your business by name. At one time, these weren’t a big deal. If you haven’t gotten used to monitoring the Internet for references to your business, you might not realize how important it is to do so now. As it happens, one of the critical best practices advocated by some of the top-performing Ace stores is to monitor the store’s social media feedback very closely, and to respond quickly whenever a complaint pops up on one of those interactive channels. You need to pay attention and address whatever issues come up online, because if yo
u don’t, that negative feedback may start echoing around cyberspace.

  This is an extremely important strategy for thriving and—let’s face it—even surviving in the 21st-century marketplace. But Ace stills runs into the occasional owner who asks, “Hey, do I really have to do this?” Guess what the answer is? No. You don’t have to do it. You don’t have to be in business next week, either!

  It wasn’t all that long ago that Ace faced competitive challenges when competitors like Home Depot, Lowes, and other big-box stores started to invade their communities. If ever there was a time to adapt, this was it. It was no longer “business as usual,” as these larger competitors were very aggressive with their prices and advertising. The smart Ace stores adapted to the new competitive landscape by shifting the way they had always done business through changes and tweaks such as extended business hours, being more price competitive, stocking inventory with localized and hard-to-find items, and more.

  The moral here, for Ace and for everyone else, is simple: Adapt or die. Maybe your daddy didn’t have to worry about dealing with the same kind of service, economic, competitive, or communication challenges that you now face. You do! Accept that. Amazement is not an end—not some final answer you come up with once and never revise. It is a process—a journey—that is ongoing, ever-changing, and always being adapted to meet the needs of the current situation.

  YOUR AMAZEMENT TOOLBOX

  Times change, and our responsibilities to the customer change too. If we don’t adapt, our business may die!

  Amazement is not an end—not some final answer we come up with once and never revise.

  Great customer service is a process that is ongoing, ever-changing. Keep up. You must always adapt.

  THE DRILL

  What are the greatest challenges you face in order to stay relevant to your customers?

  How have your customers’ expectations and buying habits changed? What have you done to keep up?

  KNOW THE VALUE OF YOUR CUSTOMERS

  * * *

  Knowing the lifetime value of an average customer can help you make the right customer service decisions.

  WHEN EMPLOYEES HAVE CLARITY about the lifetime value of a customer, they can make better decisions during interactions with customers. They are more likely to understand why the service they provide is so important, and they’re more likely to be motivated to uphold the shared mission of delivering amazing service.

  That mission is not to get rid of the next person in line, not to get to the next break, not to bring the conversation with the customer to its speediest possible conclusion, but to keep that customer! When employees, especially those on the front line, have the information they need and are empowered to make appropriate decisions, they’re in a much better position to take the steps that help customers decide that they want to come back the next time, every time.

  Consider the lifetime value of a customer at a grocery store. Based on several studies, an average customer of a grocery store spends between $80 and $200 each week. To make the math easy, let’s say that hypothetically an average family (customer) may visit the store twice a week, spending an average of $50 each time. That’s $100 per week for 50 weeks—we’ll assume the family takes a two-week vacation. That’s about $5,000 each year. Let’s say the average family stays in their neighborhood for seven years. That makes the average customer worth about $35,000. That number doesn’t factor in any referrals to new families moving into the neighborhood. That means the average customer might be worth multiple times that $35,000. So, if every once in a while a customer complains that a carton of milk was spoiled, do you really want to argue over the price of a carton of milk?

  The Five-Dollar Lifeboat strategy from chapter four in part one of this book ties into this. It’s such a small amount of money to invest in solving a problem, and it can have such a huge emotional impact on the customer. For most businesses, giving a frontline employee the independent authority to spend five bucks to resolve a problem makes perfect sense. It means giving the employee the authority to hand over another carton of milk in order to resolve a complaint. Why would you want to make the employee leave the customer waiting, even for a moment, while he goes to “check with the manager”? Make it easy for the employee and the customer. Is the customer unhappy? Yes. Would making the customer happy cost less than five bucks? Yes. End of problem. Hand over the carton of milk!

  As I point out later in chapter nine (see Tool #40: Satisfaction Is a Rating, Loyalty Is an Emotion), customer loyalty is all about the next time—every time! Customers usually have a choice: to do business with us or our competitors. So, what decisions are our employees making today that will make our customers decide to do business with us, instead of one of our competitors, the next time they need something we sell? Our employees should be making smart business decisions that allow them to deliver an experience that is so good that, if our customers were to go to a competitor and ask for the same level of service, our competitors would find that customer demanding!

  A great example of why you should give your employees all the information they need about lifetime value and margin involves the Ace store in Edgewater, Colorado. This store ran a Labor Day promotion involving a special discount on canning jars, and the offer proved so popular that the store was completely out of stock of the canning jars on the very first day of the promotion. The next day a customer named Tiffany made her way into the store asking for the discounted canning jars. The Ace associate could have just said, “I’m sorry, we ran out of them yesterday.” That would have been the easy way out. But she didn’t do that. She did a little math. What’s the likely lifetime value of the average customer—perhaps this customer? That number was a heck of a lot more than a case of canning jars costs. What’s the total cost of securing another box of canning jars for this customer, and discounting them retroactively? A few minutes of my time, plus the discount: less than a few dollars, anyway. Easy call!

  At the counter associate’s suggestion, the customer got her canning jars, with the full discount, thanks to a special order placed on the spot. They came in after Labor Day, but who cared? “I was taken aback by her going above and beyond,” Tiffany recalled later, “and it was much appreciated.”

  When it comes to creating loyalty, we can’t wait until it looks like we are going to lose the loyalty to start trying to keep it. That just doesn’t make good business sense! When our people know the numbers, they’re more likely to understand why loyalty needs to start at the beginning of the process and continue throughout the lifetime of the customer. They’re more likely to manage the contact with the customer with that lifetime value in mind every step of the way.

  The more we know about the value of a customer, the better the decisions we make about taking care of that customer.

  YOUR AMAZEMENT TOOLBOX

  All employees should know the lifetime value of the average customer.

  The more we know about the value of a customer, the better the decisions we make about taking care of that customer.

  Manage the contact with the customer with the lifetime value in mind every step of the way.

  THE DRILL

  What do you estimate is the lifetime value of your average customer?

  Think of a time that you solved a problem for a customer that cost a little money in the short term but won the person’s loyalty for the long term. Describe what took place.

  KNOW WHAT DRIVES YOUR SUCCESS

  * * *

  What are the most important factors that drive your business success?

  ONE OF THE EXERCISES I do with clients is to ask them to define their most important success drivers. Typically, they will have three to five, maybe six, of these drivers. I then ask them to choose which one driver is the most important. In other words, why would someone do business with them, or choose them over a competitor?

  Jay Heubner, Ace’s Director of Retail Training, told me that there are five factors that are absolutely critical to an Ace store’s s
uccess. I didn’t have to ask him to come up with them. He already knew them, and one of his goals is to make sure that every single owner, manager, and associate in the Ace family knows exactly what those five keys to success are. The list is Ace’s version of a classic marketing concept known as “The Five Ps.”

  The first P is for people. Ace depends on its people to deliver a great experience to customers, and to earn Ace the reputation as the most helpful hardware stores on the planet. They refer to their people as their “weapon in the retail world.” Without the right people, trained in the right strategies, supported over time, there’s nothing else to talk about.

  The second P is for product. Ace is recognized as one of the top retailers in the entire industry, so obviously this P is pretty important to them. Each Ace store stocks high-quality products and manages the inventory with the goal of helping the customer get everything he or she needs in a single trip. The retailers localize their inventory with the right local and hard-to-find products to meet the needs of their communities. Simply put, the strategy is to have a relevant, differentiated, and local product mix. And by the way, if the people at your local Ace store don’t have the product you need in the store, they will try to get it for you.

  The third P is for pricing. Ace is all about delivering exceptional value for the money paid, and its pricing reflects that. They define value as: competitive price + convenience + quality products + exceptional customer service.

  The fourth P is for place. In addition to the convenient neighborhood locations, this factor connects to the physical features of the store itself, and to related aspects of the store experience such as size of the store, parking, fixtures, signage, décor elements, and more. Convenience and the focus on the customer are of the utmost importance.