I used to hate January.
The parking lot at the health club was overflowing. It took forever to find a space to park the car if I could find a space at all. Then the locker room would be crowded with too many people too close together.
Finally, the equipment, the treadmills, and the bikes were all being used by people that didn’t exist in December. I used to call them “The Resolutionaires”.
That used to piss me off. But then, I would smile to myself because I knew a month later the scene would be totally different:
- The cars in the parking lot would all be gone.
- There wouldn’t be any waiting time for equipment.
- The Resolutionaires would all be gone.
- I could go back to my happy existence in a somewhat empty health club.
But this does bring up a common problem all businesses face: how do you keep your customers for a lifetime? In other words, how do you avoid The Curse Of The Resolutionaires?
Let’s Go Back To The Beginning
I began my business career in high school working at a Swensen’s Ice Cream franchise in Encino, CA. I was scooping ice cream and busing tables. In other words, it was a typical job for a kid in high school.
My next job was working for a company owned Mobil Gas station right across the street from my high school. I got to do oil changes, fix flat tires and other basic repair work on cars. Plus, I got to work on my car. This job was much better!
Mobil was also my first management experience because I became shift manager. Depending upon the shift, I would be opening the station in the morning or closing the station at night.
Part of the job of closing the station was depositing the money from the safe and then driving to the bank to deposit the money. Thank goodness no one ever followed me to the bank and robbed me!
The first thing you did opening the station was check the price at the Chevron station across the street. Then we would change our price if we needed to, so our price was within one penny of our competitor.
Gasoline is about as pure a commodity as you can possibly have. You will not get many customers if your price isn’t in line with the market.
I don’t know what the margins were on gas back then, but I’ll bet they were pretty slim. Mobil made money upselling things like motor oil, anti-freeze, and power steering fluid.
We had a script we were supposed to follow. Back then the station was full service, so we were pumping gas.
I hated that script because it felt so unnatural (and rude) to be tapping on someone’s hood. Why not just ask them if they would like their oil checked?
The reason is obvious of course: “We don’t want to give customers a choice because they might choose the wrong one.”
I learned some valuable lessons working at that gas station. The most important lesson was to shop your store.
Mobil Oil had company employees “shop” the station. In other words, these people would drive in and ask you to fill up their gas tank and see if you followed the script.
I Got Busted!
I wasn’t following the script (I was asking customers if they wanted their oil checked), and I got my ass handed to me by my boss. I was bluntly told to follow the script or I would be fired.
There were two takeaways from that experience:
- You need to shop your store/company/enterprise to really see what the experience is like for your customers; and…
- Your employees are not going to want to follow a script if they are not comfortable.
Shop Your Store/Business/Enterprise
It’s so easy to call in and see what happens that I don’t understand why more people don’t do it. Here are some of the simple mistakes I’ve seen over the years of doing this simple exercise:
- Wrong pricing on a product
- Product not in stock when the product IS in stock
- Wrong delivery dates
- Being put on hold for over an hour
I don’t even want to get into some of the crazy mistakes I’ve seen made.
My philosophy used to be, “Customer service people needed to be tightly scripted.”
In other words, don’t give customer service any leeway or ambiguity. You should just force them to follow the script just like at the gas station.
The problem was, just like I didn’t like following the script at the gas station, neither did the customer service people I worked with.
There had to be a better way, but I didn’t know what it was.
Zappos Changed Everything
I was flying from to Chicago on American Airlines when I read an interview in American Way magazine with online shoeseller Zappos’ CEO Tony Hsieh.
I enjoyed reading the interview so much that I read Hsieh’s book, Delivering Happiness. Delivering Happiness is a great book about entrepreneurship and building a business.
You can differentiate yourself from your competitors in many ways. Hsieh choose customer service as Zappos’ key differentiation.
Call center personnel are typically measured by how many calls the operator can take an hour. You literally have to get customers off the phone quickly.
Call center personnel rigidly follow the script they are given, just like I had to all those years ago at the gas station. And I’ll bet the call center personnel hated it just like I did.
Hsieh choose the completely different approach of giving more flexibility to the Zappos call center personnel. “Take as long as you need to help the customer,” he said.
“Just make sure the customer leaves happy.”
Hsieh’s idea worked brilliantly. Zappos was so successful that Amazon bought Zappos for $880M.
I wondered if the Zappos model would work in an entirely different industry. I decided to model customer service in my company after Zappos.
You Have To Audit The Results
We gave our customer service team complete decision-making authority over just about everything. The team made the real time decisions, and the VP of Sales and I audited the results.
Auditing allowed us to give quick feedback to the team, so they could keep improving. There are several benefits to this structure:
- You react quickly to customer requests, so…
- Customers are happy, and…
- Customers buy more, plus…
- The customer service team takes on more and more responsibility, so…
- The customer service team is happy, and…
- Employee retention is high
Push Responsibility Down In Your Organization
Companies have a tendency to put in more rules limiting what employees can do as a company grows. You need to fight to keep this from happening.
Netflix built their company on the philosophy of hiring great people and giving them more and more responsibility (read https://www.brettjfox.com/how-to-steal-netflixs-company-culture-in-six-easy-steps/ for more) as Netflix grew.
It doesn’t have to be the old rigid way like it was for me at the gas station. Empower your people (just make sure to audit the results) and you will likely see tremendous results.
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