Why Do We Always Do The Basic Things Wrong?

While helping do an inventory of computer accessories and electronic gadgets in a retailing outfit, I can't help but ask the people manning the store how they keep track of their customers.

Guess what? They don't!

They don't keep track of where they are getting their sales: What product and who buys them? The last time I was in retailing was in 1998 selling the very exact things but I carried more than 50 brands with the likes of Seagate, IBM, Hayes, Microsoft, Lotus, Creative Labs, Intel, AMD, and a lot more.

I can't believe that in 2008, retailers are still doing a lot of things wrong. Well not exactly wrong, but they don't do the most basic things at all (at least to get the sales consistently coming).

Back when I was managing retailing operations more than 50% of our sales were from more than 30% of our repeat customers. Customers who buy more than two items or have bought the second time will always end up in our database together with information about what hardware or software they already have at home and at the office (in this order).

Eliciting this "basic" information from customers has been integrated into the "script" of counter sales associates so that even if we don't get a sale we always have at least 5 to 10 new names in our database on that day.

Basic sales training will tell you that it is harder to get a new customer than encouraging repeat sales from an old customer but most retailing organizations ignore this. It is amazing. 9 out of 10 counter sales personnel will not initiate on their own a sales campaign for existing customers and more than half of retailing (especially small businesses) do not have such a campaign as a matter of policy.

If you want to test this, just walk into a computer store or even a hobby shop. You will most likely leave the store without the store clerk ever asking you about what you already have or how to get in touch with you about what you may need in the future.

Don't ask me if I tried it. I bought books, a new TV, a DVD player, a video game player, DVD rewritable discs, a headphone set, 2 pairs of shoes, a file box, a knapsack, a LED flashlight, binders, and more since January of this year and not a single salesperson or clerk ever ask me anything.

You don't really need much to get basic information from your customers. I designed a form that can be printed on letter-size paper (four forms on one side). The form keeps the information about the customer's full name, phone, email, address (if you're lucky because some are not just concerned about security they just find filling up forms tedious like me) or even mobile phone numbers.

To encourage them to give information, I usually tell them that they get to be invited to free seminars sponsored by our partners and on some special occasions I get to give them freebies from our partners.

I also created a Microsoft Excel template to compile all of this information so that later on I can easily integrate that into mail merge or even a fax campaign template.

If you really keep track after a year, you will be amazed at the pattern that will be seen after collating all the information including sales from each of your customers. You can even predict which week in a month they will most likely order again their supplies (I used to sell printer paper and ink).

I like to hear the expression "You called me just in time!" from customers every time my telemarketers make their daily calls.

In my next blog, I will show how a simple graph in Microsoft Excel helps me advise a friend not to close shop just because customer traffic is not consistent in their new store location in the same shopping mall.

Gung Ho and Leadership

The book "Gung Ho!" by Ken Blanchard and Sheldon Bowles is a must reading for those who would like to turn things around in an organization that either has lost its way or lost its steam. For many, this could be an eye-opener but for some who have been in the trenches of developing organizations and driving them to take the challenges of evolving, much of the teachings in “Gung Ho!” would be a given.

“Gung Ho!” teaches about the Lesson of the Squirrel: Worthwhile Work. People must understand that their work is important in the greater scheme of things. People in our organization must share this understanding and the goals that must be achieved. Our understanding and our shared goals must be ingrained in our values or are sustained by our values.

The second lesson of “Gung Ho!” is the "Lesson of the Beaver": In Control of Achieving the Goal. The book defines the elements of control as the ability to understand and know the realm within which you can act, to have a full appreciation of every person in the organization, and to challenge and stretch the boundaries of uncharted possibilities within the capacity of the people who will pursue the goals.

“Gung Ho!” closes with the third lesson: The "Lesson of the Goose": Cheering Each Other On. Cheering each other means congratulations should be true whether active or passive. We must cheer or excite people to go on not just in the end but the whole stretch or process of achieving results.

You get a variation of all of these lessons in management classics like "In Search of Excellence" by Thomas J. Peters and Robert H. Waterman, Jr., followed by "A Passion for Excellence" by Thomas J. Peters and Nancy Austin, "Theory Z" of Professor William Ouchi of Harvard, "Mission Possible" by Ken Blanchard and Terry Woghorn and even from the more recent "Direct from Dell" written by Michael Dell himself of Dell Computer Corporation.

The one thing that “Gung Ho!“ does not openly teach but is skirting or is swimming around in the book is the key that binds all three lessons. The key that ensures the three lessons are understood and lived by. The key is leadership.

The individual character that grows from these lessons must be embodied in a person. It must be perceived in and lived by the one person who will demonstrate that these lessons are real and achievable. That person is the leader.

There are many shades of leadership you may have witnessed and read about but the most common for me in my experience for the last 20 years seem to fall in different colors of grey in two personalities: The Boss and The Politician.

The Boss is the control freak: Always scared of losing control, always putting people down, always making everyone feel inadequate, always in on things however trivial or mundane, always the chairman of something, the only one who can do it, never delegates, all-knowing, the only one who can approve, only one who will be there, only one who is first, only one who is last, hates the young potential heir to the throne, the self-appointed expert of everything or the Only One of almost anything.

The Politician is the other side of The Boss: Always pleasing everyone, cannot make up his own mind, always seem to be doing something about nothing, always find someone to blame for anything, has always the right reason why it isn't him when things are bad, always find a good reason why it is him when things are good, wants to be boss but does not want to be accountable, the regular court jester, always congratulating but always scheming to get you out of the way, very good at teaching "Gung Ho!" but don't know where to start, always starting something but never finishing, finishing something but does not remember why he started it, or he is simply the common variety "wimp" in an executive suit.

We need leaders who are generative. We need leaders who bring out the best in us. The most memorable interaction with leaders that defined who I am is not really the most astounding but they are indeed profound. These leaders are not the kind we see in the limelight and they seldom are. These leaders make us realize without trying who we can be or what we can be. Their mere presence calms us and assures us that things will be better.

We should seek out the leaders among us. Bring them out and follow them. Better yet, let us seek out the leader within ourselves let it define the rest of who we are. Let that leader bring us into the light allowing us to discern the best in us that has always been there.

Gung Ho, friends!

Driving Your Marketing Campaign with Simple Databases

I always believe that a business can't operate very long without organized or structured data of some kind.

You have these forms of data accumulating somehow at some point in your existence. The important thing is to recognize these forms of data and identify which ones are relevant to your operation and your future plans.

The data that will most likely be critical to you are those that tell you about the status of your revenue, the nature, rate, and volume of your costs, and the profile of your customers.

If you are most enterprises, the last one will most likely not exist in your business. You might think you have it. Do check this out? You will most likely not have this data in a readily accessible and usable form.

Years and years ago, I use to work for a company that is into retailing of microcomputers and just about anything you can attach to it. I had zero budget for any campaign. I did have a team of ladies, however, in my telemarketing doing calls every day just to sell supplies or what we categorically refer to as consumables.

These telemarketing ladies have a list of all purchasing officers or anyone who had the authority to order supplies for their respective companies. The list was either a printout or an index card with a company name, purchasing officer's name and several phone numbers.

Each of the telemarketers kept their own list. You had to literally write on the list of cards to update it. If you filled up a card with scribbling, you were to get another one and staple it to the old card.

If it was the 1970s, a system like that would be considered efficient. I was working in the PC age in 1995. The system was not just cumbersome it was downright amusing watching the ladies update "their database".

One of the product brands (among more than 50) I managed was Microsoft Windows 95© at a time when 99.99% of Microsoft DOS© installations were pirated. Nobody believed in buying original software then. A law was just passed rendering stiffer penalties for piracy.

I have decided that a mail campaign was the most effective tool to use in creating demand for the original software. The amount of material that the Business Software Alliance was sending on a regular basis proved to be a good arsenal for the campaign. The only hitch was you have to pay the post office for every mail that is delivered.

Finance was very supportive as long as they don't give you cash. It gave me a whole new perspective on what Finance was really all about. All they suggested was: "Go use the delivery trucks. They always go out on schedule".

After that, I got encouraging words like, "Don't dare divert the routes because we'll take that out of your supplies budget". I was pretty much left to device a no-brainer no-cost mail campaign.

To jumpstart the campaign, I have to get a list of targets. The list from the telemarketers was the only obvious choice. I still need to organize it in some way and then store it as an electronic file.

I decided to create a new format in Microsoft Excel© since most of the files like price list, product brands, and parts inventory were already in Microsoft Excel©, most of the administrative staff were already using it in some way. I requested the supervisor to put all their lists in Microsoft Excel© based on the available data from their cards.

Not all telemarketers were very good in Microsoft Excel© since nobody wanted to master it. There was really no need to do so since historically telemarketers never get to stay more than five months.

I had to design a crash course in Microsoft Excel© and Microsoft Word©. I was able to design a tailored training that needed only eight hours to complete. The actual data from the telemarketers were used to rapidly build data while still in training.

There was a lot of grumbling and visible resistance from the telemarketers. Getting them off the phone for a day for training naturally means they won't have sales for a day.

The real consolation was the personal directive that was given to all telemarketers by the president. Everyone with direct contact with Customers by phone or over the counter must have training. The list in Microsoft Excel© although very crude at first finally got its first edition submitted in a single spreadsheet file.

So I thought about what I can do with the list in Microsoft Excel©. There was a slight problem with the distribution aspect of the mailers. I had to work out a schedule that synchronizes with the daily route of the delivery vans. The vans were assigned according to cities.

The Microsoft Excel© data must be able to sort itself not only according to cities but also according to streets right down to the building and floor. It was the only effective and efficient way to sort the mailers after they were printed and packed.

The problem with this realization was that I will be put in a situation where I may have to ask the telemarketers again to enter their data in another way. They now have to break up the addresses to specific cities, streets, and buildings.

I drafted a letter in Microsoft Word© and use its "Merge" feature. By the way, if you do a little experimentation, you will find out that you can link your Microsoft Excel© data to your Microsoft Word© Merge Letter.

I just "linked" the existing spreadsheet data with my letter and I have hundreds of letters with each letter "personalized" to a specific customer right down to their nicknames and the exact product or service we were providing them.

The mailing labels were "no-sweat" since most word-processors like Microsoft Word© already have built-in label forms in popular sizes.

I only needed to be able to sort the data according to building, street, and city. So I suggested my own spreadsheet template or form for telemarketers to fill up every time they get new information from customers. It was not really a problem since each telemarketer had her own workstation.

By using the spreadsheet I was able to sort the names of the customers according to the street and city, and then generate a mailing list. You can now sort out the mailers according to this mailing list and pack them accordingly for delivery.

Now all I have to do was talk to the Supervisor in charge of scheduling the deliveries. The supervisor knew the exact streets and city they will be going through. They normally have the schedule before five in the afternoon every day.

By knowing the exact building, street, and city, I can actually sort my mailers according to the schedule and routes of the delivery truck. I simply asked the delivery assistants to pass by my cubicle and pick up the mailers for the day.

After a few weeks, I was able to work out the other details I can add to the spreadsheet customer list. I was now able to enter in the remarks column that this customer is just a supplies customer, this is an inkjet customer, and that is a simple form paper customer. The unexpected benefit of this data is we can also put in the index column, when is the best time to call a customer.

We were now able to schedule our telemarketing activities according to the expected time supplies of customers start running out. Two or three days of the expected need, telemarketers are hot on the phones calling these customers.

We were able to level off inventory because of the predictable cycle of the need. We were always calling at the right moment.

My simple spreadsheet evolve into a more useful set of data we can safely call a database. This demonstrates how a little effort to record or document simple information about customers turns into an unexpected tactic for getting the customer at the right moment, and grudgingly without additional cost.

The really good thing about the experience is now the president of the company was suddenly supportive of what we were doing. Telemarketers were no longer complaining if we request assistance for data gathering campaigns in preparing for a product launch or for a market study.

Telemarketers knew that they will eventually benefit from the ideas we churn out. Telemarketers were earning from commissions from sales so they have every reason to support our efforts.

The other use I got with the database we have is as a negotiating tool with OEM distributors. While most of the computer retailers can say they have lots of customers, I can actually sight the exact number of customers we have who are regular customers and who are intermittent customers right down to what industry.

I can wave around pie charts of how many customers were in the financial services, manufacturing, shipping, education, government, and if you ask me more I can tell you how many are CEOs and how many are CFOs.

It does wonders especially if you are trying to entice OEM distributors to get your company to launch certain top-of-the-line products every year and every quarter. It's a great boost to my image. You can always let your OEM partner foot the bill if you can back up your market or customer profile with numbers and charts.

Microsoft, Microsoft DOS, Microsoft Windows 95, Microsoft Excel, and Microsoft Word are trademarks, tradename, and copyrights owned by Microsoft Corporation.

The Six Handicaps in After-sales Customer Relations

Experience and research show that nurturing existing customers and building customer relationships with these existing customers are cheaper strategies than regularly looking for new ones.

Many know this to be true whether you are a small or medium enterprise (SME) or a large one. But, for the life of me, I still see more enterprises making enemies out of their existing customers and getting new customers who buy from these enterprises simply because these customers are ignorant about the questionable practices of
these enterprises.

Most of the selling processes of small and medium enterprises are purely focused on making the first and only sale from every customer that literally "walks in" the stores. After this first sale, practically no more interaction takes place between the salespeople and the customer.

The Six Reasons for Most SME's Reluctance or Inability to Establish After-sales Contact

There are many reasons for this reluctance or inability to establish contact. Let's start from the more common kind of business: The enterprises that have products, services and people dedicated to the more shameful side of customer service or the absence thereof. By the way, there is a lot of this kind around.

It's both a boon and a bane. A boon because it provides almost unlimited opportunity for the good ones to shine; while it's a bane because it erodes the "trust" element in customer perception for not only the enterprise in particular but for the whole industry where you belong in general.

Ok, back to the "more shameful side of customer service or the absence thereof."
There are a lot of reasons why this kind of enterprise avoid after-sales contact:

Reason Number 1
The first and more obvious reason for not pursuing after-sales relationship is that there is really really and absolutely no "after-sales" process to speak of. There is simply none and the enterprise has no plan of putting any in place. You will not see any visible process being followed or any policy governing their customer service or any service for that matter.

These guys really don't have the resolve, the money to put it up or are purely scam artists with one strategic goal in mind "to get as many of us to give our money to them at zero cost if possible and then run before any of us becomes the wiser!"

I suggest you read my blog on "Indicators of Weak Customer Service Programs" to stay away from this kind of enterprises or better yet avoid being a clone of these enterprises.

Actually, if you become a member of a bunch of businesses with bad customer service, you actually make my work easier teaching the better enterprises to be good at the basics of impeccable customer service. By being bad, it's pretty easy for people like me to distinguish and demonstrate what is truly an excellent customer service program
from the really rotten ones.

You help me simply by providing me a long list of examples of what they should not be doing to customers. Believe me, the list I have now is long enough but with your help, I might just get it to be encyclopedic.

Reason Number 2
Here's another very common reason for avoiding after-sales service. The product or service is simply bad, poorly designed, poorly made, or a truly distasteful concoction of all of those I mentioned.

Your frontline sales or support personnel just don't have ready answers for problems that your product or service create either for your customer or for your own people. They know that these problems will not die down simply because you are still producing items or delivering service that are inherently bad.

Your people are just doing what a normal human being does a "fright-flight" reaction.
They're scared out of their wits facing customers or picking up the phone to answer customer complaints with all that angry and well-motivated "new enemies" after each sale and the unlimited potential for consumer protection litigations to boot.

They make the sale and hope the customer forgets their name and their face.
No amount of good communication and public relations will improve a bad product and a poorly delivered service. In my blog entitled, "The 20 Customer Service Facts You Should Know" I outlined 20 common service facts that guide me in designing customer service programs.

Customer Service Fact number 2 states: "300% more people will know about your bad service from dissatisfied Customers than your good service from satisfied customers."
It simply means that you will have 300% more coverage in terms of reputation for your bad customer service than from your good one (if you have any). Your bad reputation simply precedes your other (or worse) reputation whatever that is.

Reason Number 3
Here's another reason that's related to the previous one: Your people do not have the capacity or competence to build much less nurture after-sales customer relationships.

Any organization to function must build certain sets of skills and knowledge to ensure that jobs get done in the quality and degree acceptable to its stakeholders like your customers. People aren't born with telephone skills or problem-solving skills. In fact, every parent sure wishes each baby brought out of this world came with a manual of some kind.

Training can make considerable difference in the absence of a seamless process for building relationship with customers. Unfortunately, very few invest in training (probably because most of their people never stay long enough to finish it).

Many years back, I got invited as a Marketing Consultant for a computer retail store. The first day I showed up, I notice how most of the sales and technical support people kept their distance from the phone every time it rings.

Most of the technical support guys avoid the phone like the plague. According to them, most of those customers calling in are yelling at them because the sales people either can't explain their problems about their newly bought computers or are not calling them back.

The sales people in turn wasn't picking up any ringing phone because the customer complaint is about technical matters they know nothing about and the technical guys aren't very keen on explaining these technical matters to them.

Training is important because a well-designed training of any kind delivers real skills, knowledge and competence. With these skills, knowledge and competence comes confidence. The very confidence they need to pick up that ringing phone or walk into a customer's office with a purposeful gait.

Reason Number 4
You're getting the wrong people for the job of building or nurturing customer relationships. This is another reason you can't rely on your people to do the job even if you did train them. You have to find the right character for the job. The keyword is "character".

This is one thing I try to do right the first time--Getting the right people for the job.
In reality, most are doing everything the first time and doing it wrong all the time. Like this is the first time I interviewed a woman, this is the first time I interviewed an ex-seminarian, ex-con, ex-wife, ex-girlfriend, ax murderer, my mother-in-law, Jude Law, and ad nauseum...You're just not too good with people.

Personally, if you fit in this mold I suggest firing yourself. Mind you, this is not the first time I actually advised a client in a consulting engagement to fire himself and get somebody to act as CEO. The CEO was very bad with people I suggested he votes himself chairman and get somebody professional as CEO.

Nowadays, not only do you need to find the right "character" but also the right attitude to work with a team. Customer interaction is now becoming complex in this age with the advent of many avenues for communication like the Internet, websites, email, and all that you will most likely need people with different cultural and technical backgrounds.

Imagine all that then getting them to meld as one team. Honestly, it helps if you have a good compensation package if you use teams to build customer relationship. We'll get to the topic of compensation soon enough.

You need to read my blog on building customer service teams entitled what else "The Team" for more insights on building service-oriented teams.

Reason Number 5
You aren't paying your people in proportion to the expected output or the quality of work demanded of them. Ever heard this expression" "Hey, I didn't sign up for this!"

This is another reason why sales or service personnel don't put up with the stress of customer interaction or after-sales relationships. The level of stress brought about by a culture of bad service is enough incentive to leave a job even a high-paying one.

In a survey done early 90's among Asian employers, it was found out that pay is not the primary reason why people leave their jobs although this is the number one factor for applying for one. Most of those who leave believed that there must be a direct correlation between their worth as contributing member of the organization and their pay.

This means that the compensation package does not necessarily have to be high per se to keep people but must have a direct relationship to their perceive worth and contribution to the organization's growth.

In the workplace, people just shut off customers if they want to survive the stress of the day. This starts a vicious cycle of low-key avoidance strategies to an all-out apathy towards customers.

When you have a disproportionate compensation package for frontline people who are suppose to initiate and manage the after-sales relationships, you are, in a manner of speaking, creating the correlation between pay and bad service.

Personally, I think this trend will not change any time soon. I'm referring to both the leaving and the bad service.

The last reason I have for the inability to nurture after-sales customer relationship has more to do with the boss or the entrepreneur which is ...

Reason Number 6
The business is not creating the environment nor the culture that puts the message across that customer relationship is a strategic concern for the enterprise.

Most enterprises really revolve around the character of the founder or the entrepreneur. Much of the discernible characteristics of the enterprise is much a reflection of the entrepreneur rather than the culture of the collective character of people making up the enterprise.

Entrepreneurs tend to hire people that are mirrors or reflections of their own character or a child of similar personal or cultural background.

Surprisingly, this is very true for males than for female entrepreneurs. Female entrepreneurs tend to look for personalities that complement rather than compete with their character.

Even I hate to admit this. This trend alone may explain why female entrepreneurs tend to get this entrepreneurship thing right the first time. They just have the knack for getting the right people at the right moment.

When the views and actions of the entrepreneur say that customer relationship is not important it comes across more clearly and with far more impact than a policy and operations manual in a three-ring binder.

My next blog on The After-Sales Customer Relationship will be on building and nurturing a process for such a relationship. I will cite specific examples of how I get around all the six reasons above.