Thursday, 19 July 2018

Inconsistency Is the Enemy of Loyalty

I recently wrote on how inconsistency is the enemy of customer loyaltyand this week saw an article in the press complaining about exactly this.

What this complaint highlighted was not just that inconsistency had led to the customer writing to the national press, but that there seemed to be a lack of communication in the organisation concerned between “management” and “staff” (or, at the very least, inconsistent application of the message).  It also seemed that the “policy” that led to the original complaint was subsequently changed and the customer concerned had only found out by accident.

A study by Boeing revealed that in any organisation, 80-90% of the factors that contribute to errors are under management control, whereas the remaining 10-20% can be attributed to staff.  Apart from looking remarkably like “Pareto’s Principle”, the message is clear: management has a crucial role to play in ensuring that there is consistency in application of processes, procedures and policies, and that staff receive the training needed to carry them out.      

At times, this means re-writing manuals (so keep them short and simple).  It means regular training and refresher sessions.  It means staff meetings where staff are free to say what’s preventing them from doing their job properly.

The role of leadership has never been so clear – it’s critical to customer loyalty and satisfaction, as well as wider public perception of our business.  How can we meet this challenge in our own organisation?


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Thursday, 12 July 2018

Hard Won, Easily Lost…

I’m talking here about customer loyalty.  Loyalty is what brings our customers back for more; it’s what inspires them to recommend our product or service above others to their friends. It’s what keeps the money coming in.

Michael Heppell, a coach whom I follow, takes the view that inconsistency is the enemy of loyalty; never were truer words spoken. When first-time customers get something delivered or done in a certain way, they automatically assume that it will be delivered or done the same way every time thereafter.  One has only to look at customer reviews of products or service to see plenty of examples of people who experienced great delivery the first time and were let down subsequently.  

It works both ways, we may experience fantastic delivery the first time, and terrible the next, whilst someone else had a terrible experience the first time and never goes back for more.

One of our most difficult jobs as leaders is to make sure that our organisation delivers the same quality every time.  As most of us employ human beings, this is no easy task. People get sick, sleep badly, have arguments with colleagues, get injured – all of which can affect the quality of their work.  Add to this pressure of meeting deadlines whilst following rules that are not always easy to understand and being the face of the business to its customers, and something MUST eventual go wrong.

Heppell draws examples from everyday events such as:

  • Shops which spend huge amounts on refurbishment, but next to nothing on training staff;
  • Companies paying PR agencies to help them win awards, but which couldn’t win a public vote;
  • Transport companies where good service is a lottery.


Being consistent is obvious; it’s essential, but it’s not easy.  We find plenty of reasons why we need to be consistent for our customers (but even more excuses why we aren’t).

One area where we can make a start is to ensure that promise is matched (or even exceeded) by delivery.  For this, we need to make sure that the training, tools and environment all support delivery of a consistent delivery.  There’s no point in having great premises, highly-trained staff and great computer software if the organisation’s procedures hamper everything. The aviation industry has discovered that 80-90% or errors are down to management.  This is normally because different apartments (sales, operations, customer service, HR, IT, finance) often have conflicting goals and priorities.  

People come to work wanting to do their best, and it’s up to us as leaders to make sure they can if we want to keep that precious customer loyalty (and our business running).

Why do we want loyal customers?  Loyal customers:
  • Buy more (and more often);
  • Are more forgiving when we make a mistake;
  • Recommend our business to others;
  • Won’t desert our business for a competitor as fast (what I call the the “sticky factor”).

This is worth fighting and training for.  People say that customers have no loyalty.  I prefer to say that we shouldn't be giving them reasons to leave.


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Saturday, 30 June 2018

Decisions... Decisions...

Every day we make decisions, no matter what our job or organisation.  As we progress up the hierarchy, the nature of decisions may change, but not necessarily the number or pace.  The further we go, the more the proverbial “buck” stops with us as we have more colleagues who refer upwards.

Decision-making has been the subject of innumerable studies, literature, experiments and training courses.  I’ve been on “Problem-Solving and Decision-Making” courses and been faced with decisions all my life as an expatriate and manager.  What strikes me is that, despite all the studies, books and experiments, we still only have a basic understanding of the process people go through in different situations.

Decisions usually arise because we are presented with a problem and have to select a course of action.  In some cases, this may be easy (for example, we decide notto cross a road when there is a vehicle approaching nearby because we have been taught that this isn’t safe).  This is what one might call a “black and white” or “open and shut” case, requiring little deep thinking because we have been told that it isn’t safe to cross the road in front of an approaching vehicle.  

Now change the scenario: suppose the vehicle isn’t thatclose and, if we don't cross the street, there will be other consequences (e.g. missing a bus or train).  It now becomes a question of judging distance, speed and time for the vehicle to get to where we stand against our speed in getting out of its way and how important we think it is to get on that bus/train and whether we think that the driver of the vehicle will stop or slow down sufficiently to let us through.

This is a simple illustration of the factors that influence our decisions. In the above case, a young, fit person who needsto catch that bus may look at the oncoming vehicle, see that the driver is watching them and decide it’s safe to risk crossing.  

The factors that I see influencing our decisions are plenty, including:
  • Availability of information or lack of it;
  • The need for “original thinking” or “problem-solving” vs following a manual;
  • Whether the decision is “urgent” or “not urgent”;
  • Whether the matter in front of us is “difficult” or “easy”;
  • Whether the matter in front of us is “important” or “not important”;
  • Our priorities at the time;
  • Health considerations;
  • Fatigue;
  • Perception of the situation/situational awareness;
  • Confidence;
  • Experience;
  • Pressure to perform;
  • Past precedent;
  • Perception of what may happen if the “wrong” decision is made;
  • Perception of one’s own “infallibility”.

In his book Black Box Thinking Matthew Syed looks at peoples’ actions in light of many of the factors above.  His conclusion is always that one needs to examine decisions taken in light of the circumstances surrounding the action and that this leads to better learning and decision-making in the future.  

Equally, the fun Lost at Sea exercise shows us that, in general, groups make better decisions (even if only marginally better) than individuals.

In certain businesses and cultures, “failure” is stigmatised ad the result is:
  • “Passing the buck”;
  • “Covering our backs”.

Look at many of the hospital dramas in TV and the first reaction to a botched operation is “What are the legal implications?” or “How do we defend ourselves?” rather than “What can we learn from what went wrong to prevent it happening again?”.

Decision-making is still a relatively little understood science, but what helps is to understand how weourselves go through the process based on different circumstances.  How do you think you do?

I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

  

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Wednesday, 20 June 2018

How Customers React

When we interact as customers with a business or organisation, we will have an experience ranging from “first class” to “terrible” (or similar). I’ve asked myself a number of times how we react afterwards, and what we’re likely to do based on my own experiences. Customer experience experts the Temkin Group recently produced a study on consumer reactions (based on 10,000 consumers) to their experiences and found that they were likely to react in a number of ways depending on whether their experience was “Very Good” or “Very Bad”.

We don't know what “Very Good” or “Very Bad” mean in this case but assume that they are better than “Good” and worse than “Bad”.  The reactions ranged from telling friends to keeping quiet and turned out as follows:

Tell one’s friends about it (by email, by phone or in person):
Very Good Experience: 44.0%;
Very Bad Experience: 46.7%.

Keep silent and not tell anyone:
Very Good Experience: 34.0%;
Very Bad Experience: 27.0%.

Send direct feedback to business by phone, letter, via website:
Very Good Experience: 20.2%;
Very Bad Experience: 26.7%.

Post about it on Facebook:
Very Good Experience: 14.8%;
Very Bad Experience: 17.1%.

Comment on a 3rdparty site (e.g. Yelp, TripAdvisor):
Very Good Experience: 10.7%;
Very Bad Experience: 11.1%.

Tweet about it:
Very Good Experience: 6.5%;
Very Bad Experience: 8.0%.

One of the most interesting responses above is the percentage of people who did nothing whether their experience was very good or very bad (34% and 27% respectively).

The most likely (over 20%) reactions are to tell friends, send direct feedback to the organisation or keep silent, with people being most likely to tell their friends.  The least likely reaction is to tweet about it. Some may tell their friends and send direct feedback.

So, if I’m in a business where customer satisfaction is vital, I’m only likely to hear about negative experiences if the customer sends direct feedback either to myself or if I monitor 3rdparty sites.  This means I’ll hear about a maximum of 37.8% of unhappy customers (unless one of them is a friend of mine or of one of my staff).  I have little control over the (unvoiced) perception that friends of almost 50% of unhappy customers may have of my business.  

If I’m in a business that sees 200 customers a day and assuming (optimistically) that 60% have an experience that is “Bad”, “Good” or better, that means that perhaps 40% or 80 customers may have had a very bad experience that they may react to.  Of them, 37 are likely to tell their friends about it. That means that I have at least74 negative perceptions on my hands (the original 37 unhappy customers plus at least one friend each).  That’s a lot of negative publicity.

The other “dangerous” group is the 27-34% who stay silent, but probably move their business elsewhere without letting me know.  This means that I could lose 22 (or just over 10%) of my 200 customers without knowing why.

Assuming that the psychology outlined above is accurate, what does it mean for us?  First that we need to make sure we understand our customers’ expectations and exceedthem.

Second, if they have a problem, they should be encouraged to let us know and it should be easy to do so.  

Third: armed with the knowledge of the problem, we need to fixitso it can't happen again.  

If Temkin Group have got it right, it’s a wake-up call for us all.

I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Thursday, 14 June 2018

Thank You

In articles I wrote in January and June 2016, I commented on the power of the phrase “Thank you” to keep people happy.

More recently, one of the people coaches I follow, Michael Heppel, also wrote on the power of these two little words.  If Michael writes about it, then it’s important in my opinion.  

We’re so busy these days getting things done, with just-in-time deliveries, deadlines to meet, forms to fill, calls to answer, emails to send and meetings (lots of meetings) to attend that we forget that we’re dealing with people(and I’m just as guilty as anyone else in this respect). 

So before I go any further, Thank Youto all those who read this blog, who have commented in the past, or suggested ideas for content. Thank Youto Blogspot for hosting it (and for their recent warning about cookies).  Thank Youto those who have given their permission for me to publish blogs on the amazing experiences I’ve had with their businesses.  

Sometimes, saying “Thank You” may be hard, particularly after receiving “constructive” (but, all the same, hurtful) criticism from well-meaning people.  It’s even harder to say it to someone who has just complained in the strongest (to us) terms about our (lack of/poor quality service/product). 

Anything that helps us improve, shows our appreciation of others or brings in more business is welcome.

I don't think I say “Thank You” often enough – what about you?


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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Friday, 1 June 2018

Crowdfunding – The Future Venture Capital?

When I wrote my first e-Book “Financial Management for Small Business – Made Simple”, I did a short section on funding a business start-up. Since then, “crowdfunding” has grown thanks to the power of the internet and the likes of Indiegogo, Kickstarter and others.

Crowdfunding uses the power of the internet to match investors and entrepreneurs.  I’ve participated twice so far – buying other peoples’ goods, that is - with good results.  So why use crowdfunding, and what do you need to do?

Firstly, crowdfunding allows you to raise small amounts from many people.  Whilst I might not to want to sink 10,000 (US) Dollars, Sterling Pounds or Euros (let alone 1,000) into some venture, I might feel that it’s worth the risk to part with, say 50.  If the venture doesn’t succeed, I haven’t lost much (except my pride).  If it does, I get a useful tool or other item and feel a warm glow of satisfaction for helping a small business.  

Second, crowdfunding doesn't limit you to your home market; organisations such as Kickstarter or Indiegogo have international audiences, so the chances of raising funds are higher as you reach out to a larger audience.

Third, assuming you’ve researched your product well and made a good “pitch” (usually a video), the amount of funding you achieve will give you almost immediate “validation” for your product - in other words, is there really a market for it at the price you are charging?

So, assuming that the above appeals, what are the downsides?  The first and obvious one is that you don't achieve your funding target. I’ve seen cases of starters being highly oversubscribed (over 2,000 times) as well as horribly under-subscribed. The great thing for investors is that they will not be billed if the minimum target isn’t raised and the project doesn’t go ahead.  

Second, assuming that you get your funding, you have to deliver. Crowdfunding organisations depend for their credibility on their start-ups delivering what they said they will when they say they will.  If you don't get this right, you can get an awful lot of people around the world really angry, at great risk to your reputation and credibility for the future. Do your research: make sure that suppliers, manufacturers and assemblers can do what they promise by the deadline promised.  You don't want one of them backing out because of bankruptcy, legislation or a bigger order coming in at the last minute from somewhere else and moving you down the list.  Have contingencies and build these into your pricing.  Similarly, make sure your delivery and distribution channels are robust so that stuff can be delivered to you and to your buyers.  This will probably take up most of your time.

Third, always check, check and check again with your supplier.  I saw a recent case of a start-up reaching its funding goal, only to find that their first shipment of goods from the supplier was entirely in one colour, instead of the variety of colours ordered.  The CEO had to reach out to all investors to explain what had happened, that they were sending single-colour orders to those who had ordered only that colour and that the rest would receive their “multi-colour” orders as soon as possible.  We don't know if this was due to a breakdown in communication, or the supplier trying to “pull a fast one”.  It might have been avoided by having someone on-site to check the first shipment.

Finally, make sure that you produce the qualityyou promised.  You may get all the other parts right, but if what you finally deliver isn't what you suggested in your pitch, then you have a problem.  Read some of the reviews on Amazon to see the disappointment people feel when they receive goods that they consider aren’t up to the quality standards promised (or implied) in the description of goods.  

In short, crowdfunding is a great way to fund your start-up and build a reputation if you can make it work.

I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

  

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Tuesday, 22 May 2018

"It's Normal"

Have you ever been in a new situation where you had to do something which seemed really dangerous or risky to you, but those around you accepted as “normal”?  I heard an interesting anecdote from the Manging Director of an oil company who had recently been out to see one of the offshore rigs that the company operated and had been nervous over the process of transferring from the ship carrying the rig crew to the rig itself.

Although the MD was nervous, and asked others transferring to the rig whether they felt the same, they all told the MD not to worry and that everything would be “Alright”.  To them, this was “normal”, but to the first-timer for this experience, it was a scary prospect.

It got the MD thinking: the other workers had “normalised” the risk, even though a few months before, someone had fallen between the rig and the crew transfer vessel.  That person survived, but it proved that things could go wrong, despite everyone thinking it was “normal”.

The MD’s question was this: how many risks in our lives have we “normalised” because we carry out that activity every day?  Think of driving a car: when you get behind the wheel for your first lesson, it all seems so complicated with the steering wheel, pedals, mirrors, gear shift, indicators and so on to remember.  And yet a year after passing our driving test, we get into our card and everything seems to come automatically.  What happened to all that complexity?

On the flip side, we may forget to look for risks because everything seems “normal” now.  The best time to spot risks is to have a new set of eyes look at them.  A typical example might be that new recruit looking at how we do something and asking, “Isn’t that dangerous/illegal/etc?”  When they ask this, we should be stopping and asking, “Do they have a point?  How doesthis look in the real world?” as opposed to resorting to our rose-tinted view of our world.  Again, the MD related how colleagues from a refinery in another country had come to the local one and asked all kinds of questions about safety and risk issues which they had spotted – and they were working for the same company!

It’s never too late to stop and ask, “Have we normalised this?” to the extent that we don't see risk where it might actually be hiding in plain sight.


I have spent more than half my life delivering change in different world markets from the most developed to “emerging” economies. With more than 20 years in international financial services around the world  running different operations and lending businesses, I started my own Consultancy to provide solutions for improving performance, productivity and risk management.  I work with individuals, small businesses, charities, quoted companies and academic institutions across the world. An international speaker, trainer, author and fund-raiser, I can be contacted by email. My websiteprovides a full picture of my portfolio of services.  For strategic questions that you should be asking yourself, follow me at @wkm610.

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