Late is as bad as never

[Part 3 of a series on the Chief Customer Officer]

More words of wisdom - and warning - from Tim Story, Chief Customer Officer:

Ted: Your last position was short-lived. You were heading up sales for a small-to-mid-sized firm poised for explosive growth. What went wrong?

Tim: In sales, getting your proposal out late can be as bad as not making one at all. And in management, not listening to your sales force and operations experts can kill you.

One bottleneck that really crippled my most recent employer: we couldn't get pricing out fast enough to land the accounts. The company had only one guy who handled pricing on all new accounts. While he did a good job with it, he wasn’t able to keep up with the sales force, because he was also in charge of production and project management. This made him slow on final proposal approvals.

By the time our proposals got to our clients, many times weeks late, the clients had either gone somewhere else or reduced their budgets.

I brought this to the COO who, being in charge of operations, understood right away. Together we brought it to the CEO and CFO. They failed to recognize the problem.

If we could have gotten those proposals out when the clients were 'hot,' the cash flow would have been there to keep our company growing. Instead, management was forced to lay off half the workforce.

Now the CEO and CFO understand the problem, and they’re restructuring to handle it – just a bit late.

Ted: This exact problem happened with my second employer, way back when. I think one very important lesson is, listen to the folks who are on the front line! All day every day, they are in touch with your customer: they know what he wants and needs.

As employers, we all want to work with mature, competent adults. Well, make use of them!

*****

On other matters: Jane, my guru on all matters coffee as well as all matters customer service, called me on the floor for my recent entry knocking Starbucks. She said that, while she can't defend Starbucks' pricing for iced coffee, that discrepancy is an industry standard.

So, we took a four-mile road trip to Dunkin Donuts yesterday to do some comparison shopping. The results:

Dunkin Donuts

Small hot coffee (10 oz) $1.39
Small iced coffee (16 oz) $1.79

True, the ice takes up most of the extra six ounces. But I think you'll agree, comparing the two has DD looking somewhat better than Starbucks.

...Which isn't to say that I admire how Dunkin's Executive Chairman of the Board (and former CEO) Jon Luther runs his company. But I'll save that story for another day. It's involved.

Again I repeat, Don't gouge your customers

Anyone who has read Five-Star Customer Service or who's followed this blog long enough knows that I have a love/hate relationship with Starbucks. There are so many ways that company gets it right on the money, but then it carelessly and absolutely unnecessarily drops the ball in all sorts of little ways.

It's a shame.

Here's an example of gouging. I can't imagine a single excuse for this kind of pricing. Decide for yourself:

Tall hot coffee (12 oz coffee): $1.65
Tall iced coffee (8 oz cold coffee, 4 oz ice): $1.95

Seriously. Can someone please explain this?

Now, here's the thing: there are entire blogs and websites dedicated to criticising Starbucks and many other iconic businesses. That is not my intention with this blog, and besides, as I said, I really do admire many, many aspects of this company.

My point with this is for you to look at Starbucks pricing and see what you can learn about your own company as a result. In short, do you gouge your customers, or could they see your pricing as gouging, and if so, where?

*****

Everything - everything! - I write in this blog is ultimately about you. YOU are the Savvy Capitalist. At least, you can be if you pay attention.

Who makes the ideal Chief Customer Officer?

[Part 2 of a series on the Chief Customer Officer]

Recently, I caught up with Tim Story, who when we first met was Senior Vice President of Customer Relations (a.k.a. Chief Customer Officer) of Saratoga Technologies, a five-star customer service provider in Tennessee and Virginia.

Tim has started four (count ‘em, four!) companies: two in IT, one each in marketing and the Internet. He is the classic entrepreneur, a top-level generalist. So I asked Tim to give me some insight into the world of the Chief Customer Officer (CCO). Here is part of what he told me.

Ted: The idea of a CCO might be new to my readers. Tell us a little about yourself – your background, your strengths, how you operate.

Tim: What I really enjoy is a bit of sales, marketing and customer service combined. I'm all about building relationships and becoming a trusted adviser. I enjoy actually solving customers’ problems. It’s key that the CCO have the authority to do that; part of the CCO job is to always keep in mind that the company must remain profitable overall. I enjoy being "the face" of a company (not necessarily the boss, or owner) and can pull that off pretty well, whether engaging a crowd or conversing one-on-one. I like being the 'go to’ guy with any questions internally or externally. Not that I necessarily always know the answers, but I make it a point to be known to always get the answers. Some of my friends and colleagues have said I have a "P.T. Barnum-esque" personality and profile.

Ted: While I know you to be highly successful at what you do, it can’t always be easy for you. What are some challenges you’ve faced as Chief Customer Officer – no matter your official title?

Tim: One problem is that some companies don't always seem to get the concept of a C-level customer champion and all-around problem solver. My background is a bit scattered as well, which is not always valued by the entire management team. I've been successful, sure, but my background sometimes makes me look "scattered" or "not expert" in a certain field. I can relate, sell, market (and be creative), manage, lead, understand operations and financials; everything a real leader needs to be effective.

At times, though, I have been pigeon-holed into one area to do just part of what I enjoy. That makes it really hard, when I know I can help out in other areas but my peers think “that's not my job." If the CEO buys that line of thought, I’m not able to do the job I am supposed to.

Tim had one such issue recently that I’ll share in an upcoming post. Spoiler alert: don’t squander talent like Tim’s by keeping the chain too tight. When you’ve got a winner, let him loose to win for your team.

NICE is in

From an encouraging article in today's NY Times, entitled "Back by Popular Demand:"

Research indicates that people who might be categorized as nice tend to have lower blood pressure and lower divorce rates, said Linda Kaplan Thaler, an author of “The Power of Nice: How to Conquer the Business World With Kindness.” Doctors who take an extra few minutes to talk with patients are sued less often for malpractice.

“Companies that have the highest retention have the nicest atmospheres,” said Ms. Kaplan Thayer, who is also chief executive of the Kaplan Thaler Group, an advertising agency that employs about 175 people. “And in a situation where people are losing their jobs and you have an option of whom to hire, you’re going to hire the person who is complimenting your tie. Nice becomes a competitive edge.”

I highly recommend "The Power of Nice." It's too short for my liking, but that's more an endorsement than a complaint, isn't it?

For the entire article: http://www.nytimes.com/2009/05/24/fashion/24nice.html?pagewanted=1&_r=1&ref=fashion&adxnnlx=1243094423-cgxCyM4P8zcNNjVuJ1b3bA

Recessionproof!

For the past eight months or so, I've been collecting data and conducting interviews of leaders at companies that appear to be recessionproof - they are thriving in this economy, not because of the downturn, but despite it.

Here's one I just found today: Zamboni, the ice-rink-smoother-machine makers. You can bet your bottom dollar I'll be looking into this interesting company further before my study is done.

http://www.nytimes.com/2009/05/23/sports/hockey/23zamboni.html?_r=1&hp

Two preliminary secrets to their success in this tough time would appear to be their near-cornering of a tiny little niche, and their utter lack of ambition (or should I say greed?). They're about a $15 million company, just as they've been for years.

More on my study later.

Zappos - you've GOT to experience this!

You know when I pay attention to a recommendation? When it comes from the customer service guru Jack Mitchell, best-selling author of "Hug Your Customers" and owner of Mitchells/Richards/Marsh's.

Still, I'm a putz, so it took me a month or two to actually check out www.zappos.com for myself.

...Don't be a putz!!! Stop, drop, and roll - whatever you're doing right now, abandon it to watch this segment from ABC's Nightline: http://abcnews.go.com/Video/playerIndex?id=5333958

Then, when you're done, go to Zappos and buy something - it doesn't have to be shoes anymore; they've branched out.

You can bet your bottom dollar this amazing company with its refreshing culture and anti-hero* CEO will get its own chapter in my next book.

Yes, they're that good.


*In the not-too-distant future I'm going to take the conversation on this blog from customer service to leadership. When I do, the cult of personality will never be the same.

Chief Customer Officer, part I

Chances are, your company has a Chief Executive Officer - for better or for worse.  The second-most common C-level position is finance, as in Chief Financial Officer. 

I think this shows where most corporations' priorities lie.  Sadly.

Most larger companies, and many mid-sized as well, have Chief Operating Officers and even Chief Technology Officers.

There is infinitely smaller chance that your head of human resources (I prefer the department-name "People") goes by the title Chief.  Yet what's more important to the success of an organization, people or money?* 

And there is next to no chance that your firm has a Chief Customer Officer.  More's the pity, because again I have to ask you, what is more important, money or customers?

"Money enables us to hire people!" some will surely say.  I hear you.  Money rocks - this blog is a paean to wise Capitalism, after all!

"Without money to keep the doors open, we can't serve our customers!" the same folks will argue.

Ah, but let's not put our cart before our horse on either score, shall we?  And let's limit our focus today to customers - we'll get back to the all-important People of your company at a later date.

Does your company have a Chief Customer Officer?  If not, perhaps it's time you created the spot.  Like all C-level spots, this person should report directly to the CEO, and be an intricate part of her team and of her strategic vision.

Of course, the title itself only matters as a symbol.  Later this week, I'll introduce you to a man who served in the CCO position while wearing a vice president's name badge - that's eminently possible: indeed, I'm not a big one for standing on ceremony.

The important thing is to have a person, right up near the top, whose livelihood is dedicated to making sure the customer is not merely satisfied or happy, but damn-well delighted.

Do you have a Chief Customer Officer?  If not... well, it's never too late, is it?

*To tip my hat to Jack Welch for a second time in less than a week, you can read the iconic manager's take on the relative importance of these two departments in his book, Winning.

"When a man knocks you down..."

"When a man knocks you down and you can't get up, you bite him on the leg. You just don't give up. I'm not gonna give up till they put dirt on me."

- John Bradley, former Georgia sharecropper who ended up owning his own quite-successful farm.

Two Red-Flag Words

"Look..."

"Listen..."

I'm pretty sure it's impossible to start a sentence with either of these words, then go on to finish the sentence with good - even adequate - customer service. You can't do it.

Pay attention the next few times you hear someone (or yourself) start a sentence this way.

Food for thought.

*****

By the way: "I'll be honest..." "Trust me..." "Believe me when I tell you..." "To be frank..." Guess what? Get your guard up if you hear any of these.

As a general rule of thumb, I make a point of never trusting someone who implores me to trust him. If you have to make that request of someone, it's already too late.

Chrysler: how savvy is their latest move?

Chrysler is closing 25% of its dealerships. How would a savvy capitalist act?

Rule #1 of a Recession: cut costs everywhere else you can, but increase your sales and marketing efforts. ...Duh.

To rephrase: saving money in business is often shrewd. Saving money in sales is never wise.

Rule #1 of Sales: Trade Up. If it's a sales force, drop your least productive sales professionals and hire newcomers with star-potential (and whenever possible, hire your competition's best performers, which will benefit you doubly). Do the same with sales offices and dealerships as well.

GE's Jack Welch instituted the by-now-famous policy to cull the least-productive 10% of his workforce each year. It's harsh, but it's fair, and it is undeniably healthy for the organization as a whole.

How do you mesh these two rules? Trim and grow simultaneously. I doubt Chrysler's going to be able to pull off the first rule with a 25% reduction of sales branches (dealerships), but let's see how it goes.

QUESTION #1: Who Does It Serve?

Seems like someone at the New York Times is reading this blog.

Yesterday, I shared a couple of thoughts with my readers, including the notion that technology companies are generally way behind the curve when it comes to caring for their customers.

I also wrote that the most important question we business-leaders can ask is, "Who do our company's policies or practices serve?"

I've dubbed this QUESTION #1. If you never read another word I write, this single, all-important question will serve you well. Keep it in mind each time you make a decision, no matter the topic, and you'll never go wrong.

But as I said, someone at The Times must have read that entry, because they ran an article on Apple today that perfectly illustrates both of my assertions in action.

Unofficial Software Incurs Apple's Wrath: http://www.nytimes.com/2009/05/13/technology/13jailbreak.html?_r=1&ref=business]

The gist of the article is that Apple is trying to limit what software you add to your iPhone. Basically, you can buy their product, but even then, it's not really "yours" - not as we currently understand ownership of property, anyway. To put this in perspective:

* Imagine if Ford sold you a car, but tried to ban you from switching out the factory-issued stereo with one of your choosing.

* Imagine if Muller's sold you a box of spaghetti, but tried to bar you from cooking with homemade sauce: it's Muller's brand sauce or nothing!

* Imagine if you bought a Sony flat screen TV, but were only allowed to watch shows produced at the Sony Studios in LA.

Hey, I can understand if Apple is losing money - if people are pirating their software, sharing files with their friends, that kind of thing. This apparently is not the case. People using unauthorized software on their iPhones are not doing it to the detriment of Apple. They are voiding the devices' warranty, which seems - what's the word I'm looking for? ...Got it: Fair! That's it, these Apple customers are adults making adult decisions, and choosing to live with the consequences.

You know what really gets me? Think of the buzz, of the company- and product-loyalty that Apple has engendered first through the iPod and now with its iPhone. People LOVE their Apple products. This whole underground, unauthorized movement to create more software apps is part of the appeal of Apple stuff; it is helping to more fully engage Apple's customers! Imitation may be the sincerest form of flattery, but customizing software is certainly the second-most sincere.

What kind of a nut would mess with a self-perpetuating loyalty-machine like that?

Apple doesn't know what it's got. More's the pity.

*****

Note: I am not a zealot in the Mac versus PC culture wars. Indeed, I currently have one of each. But guess what? As far as these things go (which is not very far for me) overall I am more enamored of Apple than I am of its competitors. For what it's worth.

Emergency!! Lock up your bathroom!

Quick! Before it's too late! There are legions of bathroom-thieves out there, just waiting to steal your restroom at the first opportunity.

If you run a business, especially a retail establishment, you'd better lock up your bathroom doors right away. Or you could find yourself the victim of theft - no sink, no mirror, no toilet: all stolen by desperate evil-doers.

...Or you could ask yourself this one basic question: who is served when I lock my establishment's restroom doors?

If the answer is, "The customer is served by that practice," then go ahead, lock-away.

If you have a different answer...?

"My Best Customer"

"My best customer is the one I'm helping now." - Wachovia ad


At the suggestion of James D. Power IV and Chris DeNovoe, authors of the truly outstanding book Satisfaction, I opened my first account at Wachovia the moment we moved to Naples.

As an industry, banking is famously terrible at customer service - it's right down at the bottom of the barrel with airlines and technology companies at abusing the people who pay their bills. Wachovia, I am happy to say, is a bank of a different color. I have been very happy with them, and I'm glad to say the recent take-over by Wells Fargo has not (yet?) had any noticeable effect on branch-level operations.

*****

Thus begins Day 1 of an experiment: I'm going to make a full-out effort to blog once daily for the next month. Sometimes these missives will be just a line or two, other times they'll be my more-typical long-winded entries. Here goes nothing.