Rosanne D’Ausilio, PhD, Customer Service Expert

Dear Subscriber,

Found this article in Forbes* interesting.

Treat yours customers as if they were newspapers reporters; this is the new mantra for savvy companies of all sizes.

As consumers, we’ve become disenchanted with advertising and marketing of all sorts, having being duped, tricked or made to feel foolish on more than one occasion. The last true medium that holds sway is referrals from friends, colleagues, or online reviews from the likes of Yelp, AngiesList or TripAdvisor. According to a survey by the American Marketing Association, 90 percent of consumers trust peer reviews and 70 percent trust online reviews. It’s the last, true, medium that many consumers turn to when faced when inundated with choice, and confused by similar-sounding sales pitches.

Perhaps it is because reviews are the last sacred ground, that a flurry of outrage spread like wildfire across the Internet when news leaked that Reverb Communications (a PR agency) was paying interns to write positive reviews on iTunes for their clients Apps. Or when the occasional Amazon.com author gets ousted for disparaging competing books while positively reviewing their own. If you can’t trust advertising messages, and you can’t trust reviews, what else is left?

Based on my experience growing 99designs into a company that earns 7-figures per month, based largely on word of mouth, here are my three golden rules:

1. Think long-term reputation vs. short-term profit.

Trying to optimize profit on a sale-by-sale basis is a fool’s game, leads to frustrated customers and lost repeat business. When FedEx left an eBags package without a signature at our office building over the weekend which got stolen, a single email to the company resulted in a quick refund to my credit card. Compare that to a recent experience with a National Retailer, where a request for an exchange or refund took two store visits, three people, and more than 90 minutes of waiting while employees scoured the back-room for inventory that turned out to be non-existant.Even Apple lived up to its reputation recently, happily issuing me a partial refund on a laptop order after I failed to claim a discount I was eligible for. It would have been easy to transfer me around different departments, put me on hold, or outright say “no” to retroactively applying the discount. But the first person I spoke to happily made it happen even though they had no idea that we had 90+ employees on MacBook’s that we regularly refresh, spending thousands in the process. You never know who the customer is on the other end.

1. Identify your top customers and make them feel special.

With many companies, the most feverently loyal customers represent a disproportionately huge chunk of revenue. Knowing who those people are — and giving them special attention — is a must-do for every company. I recently had a conversation with the founder of a large Las Vegas based conference that’s been running for more than 10 years who used Klout.com to identify his most influential attendees. By offering just a little bit extra (free limo service to and from the airport), a dozen influencers directly contributed to over 100 additional tickets being sold with almost no additional marketing costs.

1. Make yourself available.

I had my personal cell phone number on sitepoint.com for 10-years (a site visited by more than 2.5 million people every month and ranked Top 1000 in the world), and was happy to answer more than 30 calls on Christmas Day, when a special deal we were running on the website went wonky. These days, we have dedicated support reps for us on three continents, and we’ve never outsourced to a call centre to cut costs.

Tony Hsieh from Zappos says his company loves to talk to customers, and classifies customer service as a marketing investment, rather than an expense that must constantly be slashed and analyzed. Zappos has no metrics that reps have to hit around calls per hour, average time per call, or other silly nonsense that leads frustrated customers.

Some businesses are even taking it a step further, by turning their most prolific fans into advocates and online sales people. Under Armour and Skullcandy have recruited an online sales force made up of their most loyal and knowledgable customers and are paying them with cash and gear for answering live chat requests from prospective customers on their websites. After all, who better to make authentic product recommendations and answer detailed product questions, than the customers already using them? No outsourced call centre team can match the passion, product knowledge and helpfulness of your most ardent supporters. There is hope.

Regards

Rosanne D’Ausilio, PhD

Customer Service Expert

*http://www.forbes.com/sites/theyec/2011/12/28/why-customer-service-is-the-new-marketing/

Dear Subscriber,

This was a guest post on Forbes.com by James Slavet, Greylock Partners

After years of leading teams and then, at Greylock, watching some of the best startup CEOs in the world, I’ve learned that the most important metrics are often ones you never read about on the income statement or in the financial press.

“If you can measure it, you can manage it” is a business saying that goes way back. Maybe it was Henry Ford who said that, or Peter Drucker? Regardless, most managers only measure outputs, not inputs, which is like telling a Little League team to score more runs, rather than actually explaining how to swing a bat and make contact with the ball. Similarly, most companies measure traffic, revenue or earnings, without considering how to improve the company at an atomic level: how to make a meeting better, or an engineer more productive.

Metric 1: Flow State Percentage

Jobs that require a lot of brainpower—software programming for instance—also demand deep concentration. You know that feeling when you’re “in the zone,” cranking on something. That is flow, a term coined by psychologist Mihaly Csikszentmihalyi. Unfortunately, most of us are constantly interrupted during the day with meetings, emails, texts, or colleagues who want to talk about stuff. These interruptions that move us out of “flow state” increase R&D cycle times and costs dramatically. Studies have shown that each time flow state is disrupted it takes fifteen minutes to get back into flow, if you can get back at all. And programmers who work in the top quartile of proper (ie uninterrupted) work environments are several times more productive than those who don’t.

Ideally programmers and other knowledge workers can spend 30% – 50% of their day in uninterrupted concentration. Most office environments don’t even come close. To get started, ask your engineers to track for a few days their personal flow state percentages: how many hours each day are they in flow, divided by the number of total hours they’re at the office. And then brainstorm ways that the team can move this number up. For example, perhaps there’s a little paper sign at each person’s desk that says “Go Away, I’m Cranking.” Or maybe you have a day where no meetings are allowed. Tom Demarco has written insightfully on the topic of flow.

Metric 2: The Anxiety-Boredom Continuum

Years ago, back when I was younger and cooler, I took a salsa class with my wife-to-be where the instructor said something that really stuck with me. He said that his goal was to keep all of his students in the pocket between boredom and anxiety – but closer to anxiety. In other words, we shouldn’t be so overwhelmed that we break down and give up, but we also shouldn’t be coasting either. He kept the rhythm fast enough so that we were challenged, but not so difficult that we lost the steps completely. And he kept tuning the difficulty level of the class to stretch but not break us.

This same anxiety-to-boredom continuum also applies to managing people. Star performers can get bored easily, and often function best when they’re expected to rise to great challenges. You want expectations to be high, but not completely overwhelming. With this in mind, check in with your employees periodically about where they are on this continuum, while also keeping an eye out for signs of where they stand. If they have low energy, or are showing up late and leaving early, they may be bored. If they’re responding to small setbacks with anger or frustration, or getting sick a lot, they may be pushing too hard.

Metric 3: Meeting Promoter Score

Most meetings suck. And they’re expensive: a one-hour meeting of six software engineers costs $1,000 at least. People who don’t have the authority to buy paperclips are allowed to call meetings every day that cost far more than that. Nobody tracks whether meetings are useful, or how they could get better. And all you have to do is ask.

In the last minute of a meeting, ask the participants to each rate from 1 to 10 how effective the meeting was, with one suggestion for making the meeting better. It can be on a scrap of paper, or a simple web form. Verne Harnish has some good ideas about running better meetings.

Metric 4: Compound Weekly Learning Rate

My three year old son just asked me what the word “expert” means. When I answered, he nodded and asked “so am I an expert about superheroes yet?” The best leaders hold on to this relentless curiosity. Joi Ito wrote recently about “neotony”, the retention of childlike attributes in adulthood. This ability to learn is like the compounding interest on an investment: after two or three years, a relentless learner stands head and shoulders above his peers. Jeff Weiner, the CEO of LinkedIn, referred me to Joi’s posting. Jeff is one of the most relentless learners I know, and this quality is an essential element of his success and the success of his teams. So try asking your team this question: how did you get 1% better this week? Did you learn something valuable from our customers, or make a change to our product that drove better results? As your team gets into a learning rhythm, you can review this as a group. 1% per week adds up.

Metric 5: Positive Feedback Ratio

You can learn as much from John Gottman as you can from John F. Kennedy about being a great communicator. Gottman, a psychologist, is the author of “Why Marriages Succeed or Fail”.

In his research, he found that marriages that succeed tend to have five times as many positive interactions as negative ones. And when a couple falls below that ratio, their relationship falls down too.

The same is true at the office, where you’re often connected for years in relationships with people who can either become wary of your criticisms or eager to give you their best effort. Catch people doing good things. Never miss a chance to say something nice, even if you feel a little silly. Then when you have feedback on areas to improve, they‘ll really listen. It may be hard to manage to the 5:1 ratio at the office, but you should be mindful of the balance.

So, there you have it, 5 metrics that will never show up in the best companies’ financial statements or a Wall Street Journal article, but are the kinds of reasons those companies succeed. Tracking these five metrics isn’t glamorous. But it’s something everyone can do. And it really works.

Regards

Rosanne D’Ausilio, PhD

Customer Service Expert

Dear Subscriber,

I’ve one again been included in one of Carol  Roth’s blogs.

http://www.carolroth.com/blog/60-webinar-and-workshop-tips/

Mine is #5, Content is King.

Regards

Rosanne D’Ausilio, PhD

Customer Service Expert