Thursday, April 22, 2010

Customers Will Pay a Premium Price for Superior Service

Anyone who knows me knows I am a cheapskate. I have a real hard time spending money on myself. I’m one of those people who will look for the lowest price and buy that item even if the quality isn’t quite what I want.

At least that’s what I’ve always thought. Then something happened to open my eyes to an interesting concept.

Since I travel so much I use a laundry service to wash and press my shirts, pants and suits. Fortunately there is a cleaner just around the corner from my home.

Several months ago I realized this particular cleaner is fairly expensive. My wife told me I could get my shirts cleaned for almost 50% less than what I am paying. But I refuse to change, regardless of the cost savings. At first I thought my hesitancy to switch was out of convenience. The other cleaner is several blocks away, while this cleaner is just around the corner. But when I went to my current cleaner the other day it dawned on me why I am willing to pay more and stick with the cleaner I’m using.

As I pulled up to the cleaners the shop owner saw me, pulled my ticket, and started spinning the conveyor belt looking for my clean clothes. When I came through the door she smiled broadly and said: “Good morning, Mr. Mac.” She also had a new ticket ready for my dirty load of clothes and had written my name on the top of the ticket. She did all of this after recognizing my car when I pulled into the parking lot.

When I walked out of the cleaner I had a big smile on my face. I knew the way I was feeling at that moment was the reason why I'm willing to pay more for my cleaning. I like the way they make me feel. They know me. They know how I like my clothes cleaned. They make me feel special. They act as if I’m an important customer and that they want my business. I don’t know if they treat every customer like that (I like to think that it’s just me), but I certainly notice it and am willing to pay a premium price because of it.

It doesn’t take much to wow your customers. You just have to notice. Notice who they are and what they like. All you have to do to earn their loyalty is pay attention and do a few minor things that make a difference. It’s the little things that make people want to come back.

The other day, while on a business trip back East, I was in a restaurant waiting for my dinner. I normally order room service when I travel alone but the hotel where I was staying did not have this service. I hate eating alone in a restaurant because it’s boring sitting there staring at the empty table.

On this occasion another waiter (not my own) noticed that I was alone and that I had been waiting for some time for my food. He came over and, in a concerned voice, said: “One of our cooks called in sick today so our service is slower than usual. Can I get you a newspaper to read while you wait?”

Needless to say, I was impressed. I gave him a tip when he came back with the paper.

Several years ago I read a survey where people were asked to identify the one thing that would cause them to take their business elsewhere. The results were surprising. Only 20% of the respondents said they would take their business elsewhere if they were treated “rudely.” But 86% of those surveyed said they would stop doing business with a company if they were treated “indifferently” — as if their patronage was not important.

Most customers are more than willing to pay a premium price for service providers who simply notice them and then proactively respond to their needs without prompting. My cleaner has convinced me that this is true.

Sunday, April 11, 2010

Why Feedback Needs to be Immediate

Every manager knows he or she should give an employee immediate feedback when the worker performs below expectations. But sometimes managers fail to do what they know they should do because they are afraid of the reaction they may get when they confront the employee.

Managers who delay giving feedback to their employees do a disfavor to all concerned. They cause more problems by not confronting the employee than they would by confronting the employee immediately.

When a rocket goes off course the best time to give it feedback is as soon as the discrepancy occurs. If caught early, the course can be corrected with a short burst of the rocket thrusters. The longer the rocket goes off course the more fuel it will require to get it back on the right trajectory. And, if caught to late, there may not be enough fuel to correct the deviation. When this happens the rocket has to be destroyed.

The situation is the same regarding employee performance. When an employee goes off course the best time to give him or her feedback is as soon as the digression occurs. When caught early very little energy is required to make the correction. The longer the employee travels down the wrong path the more energy it will take to change the employee’s performance. Not only will the employee have to do more to change, but the manager also must exert a lot of energy to get the employee to make the course correction.

Managers who delay giving feedback to off-target employees cause problems for themselves. When an employee has been doing the wrong thing for an extended time, and then is finally confronted with the error, the worker is more likely to respond poorly to the feedback than they would have had the feedback been given earlier. Belated feedback incites a great deal of resistance. The employee typically retorts with such comments as: “How come you didn’t tell me this earlier”; “This is the way I’ve always done it”; “This is how I was trained to do it”; or “There’s nothing wrong with the way I’ve been doing it.”

When feedback is delayed it invariably causes the employee to focus on the path they have been on rather than the corrective path they need to follow. They argue about where they have been rather than accept where they need to go.

Late feedback also causes the employee to focus on the manager rather than focus on his or herself. They often accuse the manager of being wrong rather than accepting that their own performance is wrong. Instead of using their energy to make the course correction they waste time and energy fighting the feedback they’re given. Rather than immediately getting back on track they stand their ground and defend the course they are on.

Immediate feedback is much easier on both the employee and the manager. The earlier the feedback is given to the employee the easier it is to accept the correction and the less energy it takes to change one’s behavior.

The sooner the manager delivers the feedback the less likely the employee will respond negatively to the feedback and use their energy to attack the manager rather than attacking the problem. Immediate feedback gets immediate positive results.