On Internet Business

Great Service and Great Results the Pret A Manger Way

Posted by Michael under Business Growth, customer service, Leadership

Every week of the year, every Pret store in the UK is visited by a mystery shopper who assesses the store, the server and the overall ambience of their experience. Marks out of 50 are given and a store that achieves more than 43 is rewarded generously: every team member gets paid £1 an hour more for every hour they’ve worked, and if an individual is singled out for praise, they get a £50 cash bonus. If both the store and the individual are given high marks, that bonus rises to £100. Management bonuses are linked to store performance too.

It’s a bitter experience for the 9% of Pret stores who regularly fail to hit their targets, but an empowering one for the 91% who do – it must be, because retention rates are high and it’s a competitive process to get employed: the whole store votes on which candidate should be given the job.

Costs of Customer Service

This costs £9 million annually – a massive investment in customer service for a short order, fast turnaround business but Pret’s executives think it’s worth it to ensure competitive advantage. Their annual report comes out any day now, and it’s expected that they will, once again, be at the top of the table for profitability, staff retention and market share.

To keep their customer service tip-top, Pret also have an A-Team system of swift response workers who fill in for sick leave or holidays, but they aren’t the also-rans, they are the cream of the Pret staff, so their arrival brings customer performance up, not down.

Benefits of Customer Service

Pret starts by employing happy and outgoing people, but not trying to straitjacket them into performing a certain way. While they role-play every morning to explore how to ‘do’ good service, they don’t have a manual that they must stick to. This regular exposure to potential scenarios and different responses to them means that the team has a wide range of tools to call on when dealing with customers which stops the staff becoming blasé and the customer feeling they are getting a rote response.

Measuring what pleases the customer allows the Pret staff to judge their own performance, even if English is not their first language – by having clear metrics that work for all staff (only 18% of the UK team have English as their first language) there’s a great incentive to outperform the previous week, or a rival store. And cold hard cash is what people understand as a reward, regardless of the language they speak.

What do Pret A Manger do differently

1.       Pret a Manger have a clear focus on outstanding customer service as a competitive advantage.
2.       They have a culture that demands happy and outgoing people.
3.       There is clear understanding of what outstanding customer service means and there are clear metrics for measuring it.
4.       Staff are rewarded for delivering outstanding customer service.

Pret storefront courtesy of realSMILEY

Bookmark It

Hide Sites

Gift-Giving as Business Growth Trigger

Posted by Michael under awards, Business Growth, customer service, Entrepreneur Resources, Leadership

John Ruhlin of Ruhlin Promotion Group may be unusual in this time of belt-tightening and cost-cutting. He’s just quadrupled his spend on gifts to employees (and their partners), clients and prospects because, he says, it brings rewards in greater productivity and higher profits. His tips for gift success are an interesting blend of common-sense and hard-earned experience.

1 – Don’t be cheap. He points out that team members may give up to 2,000 hours a year to their employer and to be given a trinket in return is hardly an adequate reward or evidence of thought or appreciation. If it can be found in a cut price store or a promotional catalogue, Ruhlin doesn’t want to know: his gifts are chosen with care to match the recipient and their role in the business.

2 – Make gifts or rewards, not catalogues. This is a point that is only just starting to impact UK businesses, although many have a ‘catalogue’ of options around flexi-time, further learning or selling back holidays to the company, not that many offer a catalogue of incentive items you can ‘earn’ and ‘choose’. Ruhlin’s point is that this throws the initiative back on the recipient, and that the whole point of a gift is that it’s chosen with care. He tries to select items that will match with the individual’s life and dreams, so that people know they are appreciated for who and what they are, as well as for their contribution to the company.

3 – Gift or Salary? Ruhlin suggests that if you pay a little less, and make up the difference in thoughtful and valued gifts, you’ll get more engaged employees because they feel appreciated. This is a very non-British approach, where salary has always been considered the determining factor to a ‘good’ job, and I can imagine it’s an idea that would meet some resistance from both employers and employees, but lots of psychological research into motivation shows that people are more motivated by feeling they are achieving that by monetary gain, so perhaps Ruhlin is right to suggest that higher productivity can be obtained through paying $1,000 a year less, but making up the difference with five or six gifts, totalling that amount, throughout the year.

4 – Partners Matter more. Perhaps the most ‘out there’ claim, to British ears, is the one that by spending more on a client’s partner or spouse than you do on a client, you get a better return. I don’t know if that would be true here, or how it would be measured, but he says that one Fortune 50 Executive claims to spend 3 times as much on gifts and events for partners as on clients themselves, because the spouses and partners ensure the client never moves their business away from the company that treats them so well. I can’t think of a British company that would admit to doing this, but it would be really interesting to compare the two cultures and to see if the same return on gift investment could be found in the UK.

Gift cake courtesy of Ken’s Oven

Bookmark It

Hide Sites

Making the workplace fun

Posted by Michael under awards, Business Growth, customer service, Entrepreneur Resources, Leadership

An article in Director magazine highlights the importance of fun and creativity in the workplace. Happy team members take fewer sick days and work harder for longer

Define your differences and use them to achieve more

By offering a different kind of ‘perk’ and a clearly defined brand experience to your employees as well as your customers, you can help shape your employment policy and recruit the right people to grow your business. Competitive businesses like the Richmond Group really incentivise their teams by giving them capital to run with on new projects and acquisitions and pitting them against each other.

Do more for them, they’ll do for more for you

Ikea gave all their staff free bikes after the UK government gave companies a cycle to work tax break and several UK companies give their employees free mobiles or free minutes – all this might sound like freebie heaven but it’s a way of showing the quality of investment you have in your employees. In the same way, measuring stress and monitoring workplace issues can really help a company and its employees to manage what matters – which is performance in action. Pret a Manger uses a mystery shopping programme to measure performance and reward ALL staff in a shop, not just the manager, if the results are good.

Reward what matters

Some companies offer holidays in return for performance, others give bonuses and incentives for greener lifestyle choices. Whether it’s onsite gyms or having dry cleaning picked up by a concierge, knowing what your staff want and what they’ll really work for is a way of getting them to respond to challenges with a gusto rather than groans.

Offer choice

Shine Communications lets the employees design their own incentive packages – other companies let staff bid on what they want to achieve or opt out of benefits rather than opting in. It’s all part of empowering the employee and that produces a more satisfied and dynamic team

Reproduced image courtesy of daily sunny

Bookmark It

Hide Sites

The Tyranny of Reviews and Ranking

Posted by Michael under Business Growth, customer service, Entrepreneur Resources, Leadership, Online Retail

If you run a business these days, and it’s not some totally niche enterprise like smoking shellfish from a hut on the beach, or handcrafting jewellery out of the bones of dead pets (yes, both businesses actually exist) you have to have some kind of online presence. And that presence is mediated in two ways. There’s what you say about yourself and what the world says about you. We all know that businesses ‘big’ themselves up, and we think we know that we can rely on reviewers to give a corrective view, a more balanced perspective – but can we?

The seduction of five star reviews

Take the iPhone app, phone tracker. When I looked at this a few weeks ago, I was really taken with it, it was the tenth most popular app on the site and it was really cheap. Wow! But when I dug into the reviews, it seemed like a con – all the actual comments on it said it was just a 1 out of 5 stars and that it didn’t work. The newest version apparently does work, there are loads of reviewers raving about it, but I am now unconvinced that it’s going to meet my expectations. So what was happening with the star ranking and the reviews not matching?

Probably what Michael Moyer describes in his article for Scientific American – we’re seduced into thinking that ‘the masses’ are an honest and objective reporter, while it turns out that both those reporting, and the systems that aggregate their reports, have a heap of biases that make the review process as unreliable a perspective as any other. Note the fact that only 1 or 5 stars tend to be given in review terms – a polarised response simply doesn’t reflect the status, ability or performance of any business and can’t be reliably used to assess that business.

Testimonials influence purchasing decisions

So what does a business do?  Well testimonials are good because they offer more identification than reviews: if I’m an SME looking for a certain kind of expertise and I see another self-identified SME talking about getting that expertise from an individual or organisation, I am more likely to identify with their endorsement. Case studies too, give a chance to offer a more balanced perspective. But overall, we’re currently caught in this tyranny until the buying public catches up with some of the downsides of rating and ranking, and we just have to work with what’s out there, no matter how frustrating it can sometimes be.

Bookmark It

Hide Sites

What Matters? Google Rank v Customer Feedback

Posted by Michael under Business Growth, customer service, Online Retail, Paid Search, Search

These are such different animals that at first you might not think to compare them, but I come across business people who have strong belief systems that incline them to rely on one or the other.

• The Google Rank Guys – these tend to be start-ups and online entrepreneurs who’ve grown up in a world of online commerce and focus on the grail of getting the best possible Google rank. They have a point – if you’re the best business the world it won’t do you much good unless people know your name and can access your services and these days that’s an online process.
• The Customer Feedback Fans – this business ideology says that if you have a great reputation you can grow your business organically, without worrying about what Google (and the other search engines) are doing with your online presence. They have a point too – long term gains from good customer relations are not just a way of keeping your business in the public eye, they are a way of learning what your customers want so you’re in the right place to provide it.

One thing we’ve seen in recent years is Customer Terrorism. If one in a thousand customers has a bad experience with you, they will share their experience a thousand times more loudly and widely than the 999 who had a good experience. Counteracting customer terrorism requires a two pronged approach: engaging that customer, and the people they’ve reached out too is one side of the equation, but the other is to maintain your investment in Google and other rankings so that the rant of complaint doesn’t feature as the top hit when your brand is entered as a search term. This is crucial management of reputation which companies need to have as a focus, if they are to survive the occasional blip of a bad customer experience going viral.

There’s a risk to over-reliance on Google too, which is that failing to build customer retention can leave you exposed to failure if your Google rank drops, which it can do for no obvious reason. It’s a poor strategy that builds a business on one supporting structure.

We use the NPS framework to help us evaluate how we’re doing and monitor recency, frequency and average order value to give us metrics that show how our regular customers are changing their relationship to us. This tells us about ourselves and our place in the market, but it also shows trends in the market as a whole, which then gives us a chance to respond to global changes swiftly and professionally, meeting client needs without compromising on quality or service.

Google doodle courtesy of dannysullivan

Bookmark It

Hide Sites

Negative Business Language: why EMEA should be outlawed

Posted by Michael under Business Growth, customer service, Leadership

Back in 1991, Gerald Ratner destroyed his career, his family business and the livelihoods of many of his employees when he made an after-dinner speech to the Institute of Directors saying that his company, ‘…sold a pair of earrings for under a pound, which is cheaper than a prawn sandwich from Marks & Spencer, but probably wouldn’t last as long’ a position he worsened by saying a few minutes later that some  products were cheap because they were ‘total crap’.

We’re all supposed to have learned this lesson now – to have removed the tendency to talk down to our customers and to categorise them as if they don’t matter and their opinions don’t influence everything we do. And that’s good.

So why is it that the big boardrooms still have a tendency to treat geography as if it’s a nuisance, and cultures as if they are inconvenient? Isn’t that just like saying you sell your customers crap?

Boardroom Bloopers

Increasingly I’m hearing EMEA in common business usage – if you haven’t heard it yet, it’s an acronym for Europe, the Middle East and Africa. On one level, I can just about see the reasoning for the largest multinational businesses to amalgamate continents into massive units. But I draw the line when I am told that I’m from the ‘EMEA’ region.

Europe, Middle East and Africa is vast. It includes three of the seven continents, more than a quarter of the planet’s total landmass and nearly a third of the world’s population. Our earliest discovered ancestor, several world religions, the rarest minerals on earth, both World Wars, and the richest (Lichtenstein) and poorest (Democratic Republic of Congo) national populations are all to be found in, or originated from, this ‘region’.

From Austria to Zimbabwe, from Switzerland to Saudi Arabia, EMEA contains an incredible variety of culture, resources, wealth and politics.  How can grouping such diverse areas under one homogenous name have any marketing benefit? And what does it say about businesses that they feel the need to lump and dump in this way, denying the identity, needs, opportunities and challenges of geography, culture and identity?

Cultural Ignorance A Bad Boardroom Tool

How would a New Yorker feel about being asked, ‘how are things in NORAM (North America, Canada and Mexico) or someone from Sydney being told they are from JAPAC (Japan and Asia Pacific)? 

It’s my view that the term EMEA and others like it represent the lowest point of cultural ignorance and insensitivity – it should never be used outside the company board room and even there, it’s hardly a useful tool to winning friends, influencing people or understanding the world you’re trying to work in.

As far as I’m concerned, I’m English from the UK part of Europe – end of story. I don’t seek to deny anybody else their origins and identity and I don’t see the need to remove the richness of nationality, culture, ethnicity or anything else just so that there are a few less words on a powerpoint presentation.

Remember Ratner – people deserve to be treated as equals, even when they aren’t present and especially when it’s their money we are trying to obtain – respect is the least we owe to those who buy from us, and the best return we can make for their investment in our businesses.

3D map image courtesy of kcp4911

Bookmark It

Hide Sites

Two Recessions, Customer Service and Social Media

Posted by Michael under customer service, Entrepreneur Resources, Social Media

Seth Godin claims there are two recessions going on.

According to him the first is the cyclical recession that he thinks is currently ending (no sign of the double dip in his forecast) and the other is a permanent recession. He calls it a ‘receding wave of bounty that workers and businesses got as a result of rising productivity but imperfect market communication’. And he says that there are serious consequences to the changes in market communication – the market for ordinary things is now more perfect which means it’s difficult to charge extra.

That’s the easy part.

The difficult part, for much of the population, is that employment is evolving to meet the demands of market improvement too.

Vanishing jobs and new opportunities

The first slice of employment to vanish is the middle-class, mid-level jobs that were created because companies had to be local to other companies or raw materials or to buyers. Godin says that protectionism won’t solve the problem, and that  ‘every revolution destroys the last thing before it turns a profit on a new thing’.

It’s an interesting view and one worth exploring, but there are other things happening too. As job security recedes, people tend to have more than one income-stream: they become ‘entrepreneurs of the self’ and they view employment opportunities not just as income streams but as portfolio activities to enhance, or detract from, the overall project of ‘self’ employment. It means that brand ‘me’ is a big focus for individuals who understand the networked revolution.

Brand ‘me’ under attack from social media

Which casts a new light on the recent backlash against TripAdvisor reviews which has resulted in a proposed defamation suit. MyCustomer.com sees it as a wrongly-thought-out attempt by business to corral customer opinion, but if we’re all entrepreneurs now, then there’s very little difference between the individuals providing the service and the individuals commenting on it. It’s notable that several of the companies taking part in the proposed case are in fact individuals offering bed and breakfast accommodation in their own homes.

In other words, these are portfolio people who don’t view themselves as businesses: they see a review they think is unfair and it’s personal, it attacks them and their competences rather than those of a business entity from which they can separate themselves – they are their business and they feel they have the right to challenge views that may damage their income.

It’s probably still wrong-headed to engage in lawsuits to limit free speech, but the recession of big employment is likely to mean that small employment is much more personal and more intense. Reviews – when seen as attacks on small employers, whether they are businesses or brand ‘me’ service providers - are likely to cause heartache as well as lost sales, and that’s something new forms of employment have not yet come to terms with and social media hasn’t learned to negotiate. It’s a market irregularity that time and experience will iron out, but lawsuits probably won’t.

Abandoned factory courtesy of george.schon at flickr

Bookmark It

Hide Sites

Low tech cyber-crime targets retailers

Posted by Michael under customer service, Online Retail

Consumers, already tending to reduce spending where they can, are under attack from a new generation of cyberhackers who are combining a basic knowledge of retail data collection with a sophisticated understanding of human behaviour.

This blunt combination of rudimentary criminality and predatory people skills is causing retailers to lose both income and credibility at a time when any threat to customer loyalty is seriously damaging to business viability.

Point of sale has become the new weak point in the bandit chain, with some American companies actually being sold POS systems that have been inadequately, possibly deliberately inadequately, designed. These POS storage devices may be holding credit card information from swipes in unencrypted forms, allowing a skilled hacker to remotely access the vending point data and ‘empty’ it onto a memory drive, giving the thieves the card verification and PIN data from every transaction.

Many IT suppliers are preferring to settle such complaints out of court, rather than risk public exposure because they may have identical software systems in numerous physical or online retail venues. In the USA, it’s claimed that three times as many eating outlets were subject to credit card data theft last year as they were in 2008.

Data privacy and security have often been seen as the territory of the IT supplier and their support systems, but laws being implemented in some American states, and under discussion in the EU, are looking at an explicit liability for the retailer too, based on:
• Conducting due diligence on IT suppliers
• Ensuring security is as high for retail transactions as for personal data protection used in hospitals and government databases
• Training of employees to operate systems, recognise risk and inform the retailer of potential threats to data security.

Protecting the Customer

Most people use the same pin and password for every situation. ‘Grabbing’ passwords and usernames is an established behaviour of hackers, who don’t just use the individual information they obtain: they analyse the username/password combinations to allow them to predict future popular pairings that can then be tried on accounts and retail systems.

The easiest way to get cyberjacked is to continue to use the username/password combo that your IT support person set up, because a certain personality type is much easier to predict than a random individual, and hackers have become adept at predicting what the geek population may choose to use when creating passwords. Using a ‘crib’ of common usernames and passwords allows a simple piece of software to cycle through stored account details, usually finding at least a few that open to the popular words.

Linked to this kind of guesstimation has been a more sophisticated physical data grab, such as accessing the rotas and work schedules in IT companies, that then allows the hacker to see which systems each installer/trainer or support person has been working on … because if they used a username/password on one system, they may have used it on all the others too.

Staying Safe

Protect the information you hold about your customers by resetting supplied usernames and passwords and not allowing your customers or employees to choose passwords that they find convenient. Offer guidance about choosing a good password by installing a password strength checker as part of online registration systems and in the staff manual for physical locations.

CAPTCHA inputs can slow down a human hacker and stop an automated one in its tracks – savvy staff will also be able to recognise a number of failed attempts to access a system and flag that as a potential threat which can then be investigated.

More than 35% of passwords are dates of birth – men use their own, women use the birthdates of their children. This is data that is available in the public domain such as on Facebook, so if a hacker has a name and an account they can often find all the information they need without even bothering to run software!

70% of people use the same passwords for their business banking as they do for their online shopping, meaning that their bank accounts are open to anybody who can obtain data from the POS input. Educating people about strong passwords could be as simple as suggesting they take a favourite saying anything from ‘Seize The Day’ to ‘Beer: Breakfast of Champions’ and make their password out of the first two letters of each word. Guessing Sethda or Bebrofch is almost impossible for a hacker, but very easy for the customer to remember.

Remaining safe

While it’s impossible to force the consumer to be sensible, the retailer can do a great deal to ensure security.

1. Auditing current systems is important.
2. Driving a random ‘reset’ day in your organisation can make a hacker’s life hell. Random reset simply asks all your staff to change their passwords and usernames for every work system – done a couple of times a year it reminds everybody how to set a good password and can be used as part of your health and safety audit or CPD. It doesn’t just keep your business safe, it gives your staff the skills to ensure they maintain the integrity of their personal data outside the workplace, which means a ripple effect can run through cultures, making data-consciousness as natural as fastening a seatbelt.
3. Ensure future IT contracts have a requirement for the vendor/installer to inform you of known security risks reported to them. This allows you to revise your own systems to avoid the problems found by others.

Bookmark It

Hide Sites

How to reclaim VAT on Royal Mail postal charges

Posted by Michael under customer service, Uncategorized

The recent budget slipped a little sting into its tail with the small print announcement that from 31 January 2011, standard rate VAT will be applied to postal services and goods that Royal Mail is not under a statutory duty to provide.

Competition causes costs to rise

The VAT application has become necessary because of a European Court of Justice ruling on the VAT liability of Royal Mail’s postal services. Traditionally the Royal Mail services have been VAT exempt, with other postal service providers required to charge VAT on similar services.
Now the court has decided that this historic tax break – allowable by the Revenue because Royal Mail was a taxpayer owned operator – damages competition. In a case brought by TNT, it was found that the tax exemption should not apply to items of post that are subject to competition: in other words – business post.
So while standard stamped and franked post delivered by Royal Mail will remain exempt from VAT, other items will bear the Value Added Tax cost.

Silver lining in VAT cloud

But there’s a chance to reclaim that cost. HMRC are prepared to consider any reclaim of VAT involving parcel delivery services from Royal Mail (including Parcel Force) for the previous four years on the basis of the contractual arrangements entered into with the Royal Mail while there was no VAT to pay.

One understanding of this ruling is that delivery contracts that were ‘free of VAT’ will be deemed to have an element of VAT included in the price even if no VAT was included on the invoice. So for a company that spent £1000 on deliveries by Royal Mail or Parcel Force, without being charged VAT, will deemed to have paid £175 to Royal Mail as VAT as part of that overall charge, which can then be reclaimed from HM Revenue and Customs, depending on the invoicing process and contractual arrangements agreed with Royal Mail.

Further information on the ruling and the circumstances that allow a claim can be found here.

Bookmark It

Hide Sites

Net promoter score: The questions you must ask your customers

Posted by Michael under Business Growth, customer service

Despite my initial scepticism, we have adopted Net Promoter Scores (NPS) within the business and it has been a become a key number that we look at weekly to judge customer satisfaction.  

There are nuggets of gold in learning how other businesses implement their NPS questioning and use the results–perhaps one of the best is knowing how often to contact your clients to establish how you’re doing. Quarterly calls work because anything more often can annoy a customer, anything less doesn’t give recent and relevant enough feedback to judge customer satisfaction.

Detail counts with NPS

Eliciting comments as a response to telephone calls seems important because it reveals exactly what people think, not what the nearest box is to what they think on a tick-box survey. For us, the idea that it’s also an intensely personal experience (there’s no anonymity as there is with a survey) makes sense because being able to relate the response to the client is vital to knowing if there’s a perception gap between how you see a client relationship and how a client sees it.

Speed, integrity and follow-ups to NPS calls

Having races where a good caller can get three calls done in ten minutes sounds like fun and that’s what some established NPS phone callers do, although ensuring it’s done with integrity is important. You don’t want to rush your customers, especially if they are scoring you a 0-6 because you should be asking them to accept a follow-up call from one of your managers to establish why they aren’t able to promote you enthusiastically to their contacts, and if they feel rushed or brushed off, that follow-up isn’t going to give you what you need to improve your business.

Rewarding promoters

With promoters (those who rate a business 9-10) offering coupons to the promoter so they get a 10% discount and the person they give the coupon to gets a 10% discount sounds interesting, because doing that allows the business to track who is actually doing in practice what they say they will do in theory.  It’s also interesting to see that there are a range of ways of rewarding a promoter, such as putting on an event that thanks them for their loyalty.

Bookmark It

Hide Sites