Leading people in a business is one of the biggest responsibilities one can undertake.  Given the current economic conditions it is even harder, with businesses shrinking in size and profits under pressure.  The toughest thing a leader has to face is having to deal with the human element, people.  People are being laid off in an effort to stop the sinking ship (the business) from faltering.  You also have a record number of businesses closing its doors as the economic melt down has struck local, national and international businesses around the world.  Unfortunately, this is on all our radar screens, it is happening all around us and maybe to us.  We have to deal with it as a survivor or as a casualty.  In either case, there will be hardships.  The only thing you can do is push forward, be persistent and manically focus on what you can control.  As in all recessions there is a bottom, it will end and there will be prosperity again.

Given the opportunity to lead during difficult times, a leader needs to be focused on the business and try to minimize the distractions about the economy that abound.  For the most part businesses will be very defensive in their approach to the crisis by cutting costs.  It is the right approach as you need to size the business for what you believe the market opportunities are presenting. You want to be able to give the remaining employees a sign that you are done with costs and now you are on the attack, again, taking what opportunities the market has to offer.  There will always be opportunities, but you need to be on offense in order to take advantage of the situation.

Some simple things to consider:

Giving clarity and Focus on the priorities as you have less resources, time and money.  Your employees should have a clear line of sight of company expectations and the company should ensure they have the processes, systems and tools to enable them to serve their customers.

Given the economic conditions that we are under, Planning is a critical element from leadership.  The leadership team has to plan for modifications and adjust to the plan as the environment is subject to rapid changes.  This is the time to have contingencies and anticipate scenarios the business could confront.

No plan is of any value if you don’t have measurements in place to Measure your progress.  Remember based on today’s condition, you need to determine leading indicators of change.  Communication is also required so as you are keeping score the employees understand how the company is progressing.  Honest communication is always the best and employees may not like the news, but they will respect you for your truthfulness.

Even the best laid plans can go south.  Leadership has to be prepared to Make difficult decisions as time is not your friend in the current environment.  I don’t mean to imply that decisions should be done off the cuff.  They should be studied, evaluated and executed.

As I have mentioned many times there are always winners and losers regardless of the environment.  Once an organization is stabilized, it is time to Change to offense and Accelerate.  This is time to ensure you are taking care of your current customers and acquire new ones.  Your competitors are dealing with the same situation as you are, but if you are prepared and aggressive you will take market share at the expense of those on defense.

I am sure as you read this you most likely are thinking this is pretty basic.  I would agree with you, but the basics are what we get away from in times of prosperity.  I had the opportunity to live this once before and we acted as I described.  We held ground as we stabilized, we had high retention, we began to grow share and grew faster when the market turned for the better.  In tough times, you need to focus on the fundamentals.

Posted under Customers, Employees, General, Leadership

Creating Customer Experiences

Harley-Davidson’s focus on customers started in 1983.  They created the Harley Owners Group otherwise known as H.O.G.  This is a Harley division that is dedicated to the customer experience.  It was started to promote a positive Harley brand and to clean up the negativity of the old biker gang image.  H.O.G. extended its mission to include a closer relationship with their customers to determine their needs regarding Harley’s products and services. 

 The customer contact starts when a customer buys a Harley-Davison motorcycle.  They receive a free one year membership with H.O.G.  There is constant feedback between Harley and their members.  In fact, Harley conducts an annual survey for new and active members to determine their satisfaction with H.O.G.  The H.O.G. members are very instrumental in the feedback that Harley receives regarding their equipment, apparel and the H.O.G. organization itself.  Harley’s primary focus is listening to the voice of the customer and taking action to create the ultimate Harley lifestyle.

H.O.G. Posse Ride

Harley has created unique riding experiences which include, the Posse Ride.  Harley riders assemble from all over the world to attend these coveted events.  Harley-Davidson designs the course and uses their dealer network to host the riders on their trek across the country.  Harley also conducts targeted surveys on specific participants for tracking and interaction throughout the Posse Ride event.  Applicants fill out a registration form, which requests specific demographic information, and they collect soft information that ties the emotional aspect of being a Harley owner to why they ride.  Harley-Davidson is using every interaction as a means to collect useful information about their customers, their products, their dealerships and their apparel.

Harley-Davidson executives play a roll in the Posse Ride.  Harley-Davidson executives use the event to meet and greet with their customers.  This gives them the opportunity to get first hand, unfiltered information directly from their customers.  Harley executives not only meet with the customers, but they also ride with them.  This is a great way for Harley executives to learn about design changes or new features based on customer feedback and on their own riding experience.

Executive Involvement

Harley-Davidson’s H.O.G. division creates many opportunities for interaction with their customers to gain valuable feedback to strengthen their brand, their products and the loyalty of their customers.  They survey them, they talk to them, they ride with them and, most importantly, they create many memorable experiences for them.  Harley has made a commitment to take their customers from being just satisfied to being loyal by providing them the experience of a lifetime.

Collecting customer information leads to continuous learning of an organization and innovation of its products and services.  The willingness to ask and act on the feedback results in better products, services and mutually beneficial relationships with your customers.  Creating loyal customers and a win/winwith them, what a beautiful place to be!

Posted under Business & Process Innovation, Customers, Leadership, Value Proposition

People are the most important element in an organization.  They have the greatest opportunity to have the most important impact on a company’s success in how they serve customers.  I read two articles that connected profitable growth, operational efficiencies and employees into a powerful combination that has demonstrated success.

Putting the Service-Profit Chain to Work by Heskett et al. (1994)  Why Customer Satisfaction Starts with HR by Kiger (2002)

Heskett’s work determined that a company’s employees can drive higher customer satisfaction, which leads to profitability.  Kiger pointed to a study that showed if employee satisfaction increased, customer satisfaction increased, which resulted in higher revenue and profit. Companies who can make the employee and customer connection will create a competitive advantage over their competitors.  Heskett agreed that the right people would drive higher customer engagement levels and that a 5% improvement could increase profits 25% to 85%.   

It starts with executive management supporting and investing in an employee and customer engagement strategy.  With their support the organization can build a customer centric culture that is focused on delighting (Creating Loyalty) the customers.  Creating engaged customers means attracting, developing and retaining employees that can support their strategy.  Companies who understand that profits are driven by employees will design new hire processes and selection criteria.  They use profiling, defining desirable attributes, conducting multiple interviews and including employees as part of a process to assure they hire the right people. Kiger spent considerable time studying the psychological traits of potential employees.  He supported a rigorous hiring process which included, testing, conducting multiple interviews and role playing.  His objective was to find the right people with the right personalities and train them for the specific job.

Engaged Employees Lead to Loyal Customers

Once you have hired the right people you need to work on employee engagement.  Employee engagement is a measurement of commitment by the employees to the company.  By creating engaged employees, employee retention increases and turnover decreases.  An engaged employee maintains longer relationships with customers and provides higher levels of service, which leads to higher levels of customer delight (loyalty) and profit.  Heskett determined that employee retention was critical in maintaining long relationships with customers, which led to lifetime revenue streams of customers and an increase in productivity by employees.  He concluded the real cost of employee turnover is the loss of productivity resulting in decreased customer satisfaction. 

Kiger concluded that customer satisfaction starts with Human Resources.  Investing in the development of employees to train them to serve customers is part of the engagement process.  Providing employees with education, training and systems that enable them to serve their customers easily, with speed and quality leads to employee engagement.  Education and training are the foundation in developing the skills they need to do their job, but more importantly, the company is providing them the opportunity for a career.

The connection of value proposition, service delivery, employees and customers is intuitively simple, yet so many companies can’t seem to get it right.  It starts with executive management supporting and investing in a employee and customer engagement strategy that supports the value proposition and service delivery.  The levers need to be in balance to maximize acceleration and profitable growth.

Posted under Customers, Employees, Value Proposition

Marketers use data bases to create prospect or customer lists for messaging and creating a call to action.  This is the standard practice for marketing to the masses.  However, there is difficulty in understanding what is happening at the individual level.  Tracking and customizing to individuals has been too complicated and expensive for companies to scale.  As a result, targeting who is ready to hear the message, wants the message and will take action is difficult at best.

That is changing with a new computer model called “dialogue marketing”.  Dialog marketing combines data base technology and a personalized approach to individual customers.  These are preprogrammed responses created by marketing to anticipate the customer responses and call to action.  This model changes the marketing approach from the masses to individual dialogues.   Kalyanam and Zweben (2005) describe a dialogue as “a series of outreaches and responses between a company and a customer ideally leading to some action on the part of the customer”. 

The dialogue marketing model includes four types of dialogues, Foundation, Level I, Level II and Level III.  Foundation dialogue pushes information to prospects or customers.  Level I uses purchasing history to create dialogues for repeat buying.  Level II uses predictive modeling, track buying characteristics and customized dialogues. Level III automatically identifies you, analyzes your buying behavior and instantly customizes an offer for you.  Each level is progressively more sophisticated in creating a relationship with the customer and moving them through the buying and loyalty cycles.

Personalized for You

For example, Amazon starts advertising to target prospects to visit their web site, where it prompts you for identification.   A product is purchased and instantly offers additional recommendations.  An email thanks you for your purchase.  You receive special promotional notifications for products that fit your profile. The website welcomes you by name and presents a customized web page tailored to your preferences.  The more you buy, the more personalized the experience becomes.  You feel as though they know you even though not one verbal conversation has occurred.

Genius Tailored to You

Dialog marketing is a computerized system that is focused on customizing a one and one relationship with an individual.  Its mission is to get the right information to the right individual at the right time.  It customizes its interactions and becomes more refined as more dialogues occur.  “Companies that adopt the dialogue model early can become not just the voice that customers hear, but also the one they listen for.

Posted under Business & Process Innovation, Customers, General, Value Proposition

It is interesting that the customer basics seem to come back when times are bad.  Companies who hold true to customer fundamentals during good times have a higher rate of success in tough economic times.  They shrink less and grow faster as the upturn starts.  This makes perfect sense, but it is only obvious when things are at their most difficult.  Unfortunately, for some companies it’s too late to change as they lose customers, market share and profit.

We Think it Matters

There is an article on MANAGESMARTER by Andrea R. Nierenberg that I thought was worth sharing.  I would say that these points are great ones that should be embedded in the DNA of company cultures.  They lead to growth and prosperity in good times and success in difficult times like we are having today.  There will be winners and losers in this economic down turn.

14 Ways to Keep the Loyalty When Times Are Tough

1. Start off by taking an inventory of their needs and expectations, then develop solutions.

2. Be someone they enjoy working with.

3. Stay in touch with them via their preferred method of communication.

4. Ask for their advice and feedback.

5. Think strategically.

6. Do something that is “out of the box.” 

7. Stay on their radar.

8. Be dependable and reliable.

9. Show your appreciation and say Thank You. 

10. Make sure you know what the competition is up to.

11. Build a true foundation of trust.

12. Put yourself in their shoes and see the world from their eyes.

13. Keep these five basic expectations top-of-mind to your clients: Rapport, Recognition, Reliability, Responsive and Resolution.

14. Aim for share of wallet, share of market and share of heart.

Thank you Andrea for the 14 points and the very actionable information that companies can take advantage of to build loyal customers and internal stakeholders.  You bring the point home that doing the right thing for customers in difficult times will lead to even more loyal customers in good times. 

Personally, this isn’t the winning formula for bad times. It’s the formula of success for all times, regardless of economic conditions.

Posted under Customers, General