The double-edged sword of giving referrals

Jeff Toister April 27, 2010

Referrals are a double-edged sword.

Many of us like to refer our friends and family members to businesses and services we enjoy. Asking for referrals from others can make it easier to make a buying decision. Some businesses even offer discounts or other incentives to encourage us to refer.

There's also a potential downside that occurs when the referral doesn't pan out or we discover a friend doesn't share our impeccable taste.

The Bad Experience
It's embarrassing to refer a friend to a trusted person or company only to have that person or company not deliver. Poor service can happen, but it feels a bit personal when you refer someone and they come back to you and say, "Gee, thanks for the crummy referral".

The Crazy Friend
I sometimes find myself questioning a friend after they've had a bad experience with a referral. Secretly, I think "Maybe you are a difficult, needy customer who is impossible to serve." Outwardly, I start feeling defensive and asking if my friend did anything wrong or suggesting my referral may have just had a bad day. The conversation usually concludes with "Well, I've never had that kind of experience before..."

Too Many to Choose
What if you get multiple referrals? If you choose one, do you have to explain yourself so your other friends aren't insulted?

What to do about it
Here are a few ways you can avoid feeling like you are trapped in a Seinfeld episode called "The Referral":

Use a consumer rating source like Yelp instead of a friend. Sure, there are a lot of quirky reviewers on Yelp, but at least they're all averaged out. If your friend is quirky, there's just your friend.
Have a few criteria in mind. I recently solicited referrals for translation services and received quite a few. It was easy to preserve relationships with the people whose referrals I didn't choose because I could honestly say, "Thanks for the great referral, but the one I chose was a personal friend who was unexpectedly available. I'll definitely keep your referral in mind for future projects."
Do some detective work. Find out who your friend uses without asking for a referral directly. Facebook posts, your conversations, and their homes are full of clues about where they shop. Take note, but don't ask so you can avoid the awkwardness. Unlike a good detective, I'd suggest you stop short of diving in your friend's dumpster.

Do you have a good referral story to share? Let's hear it!

Ask a few questions, THEN guess

Jeff Toister April 23, 2010

Organizational leaders are paid to act. They are expected to move quickly and decisively with limited data to make things happen. This approach is seen as a necessity to keep up with the speed of business today. The downside of rapid fire decision-making is leaders are often so busy taking action they don't actually get anything accomplished.

I've recently started facilitating sessions with leaders to help them learn how to ask a few questions, then make an educated guess on how to improve performance. The session's called Solving Performance Challenges on a Scratch Pad and it guides managers through simple exercises that get much better results than simply going off of gut instinct.

Here's a quick case study example. Take a moment to read it and then decide what you would do.

A payroll department with four employees was having trouble keeping up with the organization’s growing workforce. The time required to process payroll at the end of each pay period had increased from three to four days over the past year. The company did not offer direct deposit, so the additional processing time meant paychecks had to be shipped overnight instead of 2nd day air to the company’s 100+ locations. Managers often submitted their timecards past the deadline, which slowed the process. The department sat in an open room and the entire team was frequently distracted by visits from local managers dropping off their payroll or stopping by to ask questions. Their other duties, such as adjusting an employee’s withholding, filing, researching past payroll records, and correcting errors never seemed to slow down either, making their jobs even more difficult.

Implement new technology? Switch to direct deposit? Hire more people? These solutions may all work, but they'll also cost time and money. You can read the case study to find out what worked.

Try our Quick Fix Checklist if you are trying to solve a performance challenge and don't know where to start. Or, feel free to contact us if you'd like some help.

Seeing things from a customer's perspective

Jeff Toister April 19, 2010

This is an update from a post that's now two years old, but I like to revisit important concepts from time to time. In this case, the point is to try and see things from a customer's perspective.

The picture below is from the ice cream cooler in a hotel gift shop. Look at the third flavor down. It either means "assorted" or it is the worst flavor possible.

The store sees one thing while some customers might see something else. It's natural to be a bit myopic when it comes to self-examination, but the sign is a great reminder that we should try to see things from our customer's perspective whenever possible.

Here are a few other examples where a customer's perspective could help:

Service providers who apologize for a delay or problem by sharing their excuse rather than telling me what they're going to do to fix it.
Cashiers who hand me my change with the coins on top of the bills, especially in the drive-through line. You have to be careful to catch the coins before they go flying!
Valet parking attendants who leave my seat all the way back and my radio blasting on a station I don't listen to.

What are your examples of situations that could benefit from a customer's perspective?

It's time to fix your terms and conditions

Jeff Toister April 14, 2010

Does anyone actually read the terms and conditions for a product or service? I must admit that I usually do. Part of it comes from wanting to understand what I'm getting myself into. Another part of it comes from a small paranoia that the company has buried a clause in the agreement stating that they will sell my information to identify thieves.

Unfortunately, terms and conditions are getting longer and harder to understand. Some of these documents are even unfriendly. I recently enrolled in American Express's OPEN program and was struck by the provision that clearly stated that if I had any feedback about their service I should keep it to myself.

I have a few suggestions for anyone who is writing these documents. Please leave your comments with your suggestions too!

Use lawyers sparingly. It's OK to have a lawyer advise you on your terms and conditions, just don't let the lawyer write them. The term "forthwith" should never stand between me and conveniently sharing photos online with friends.
Confine them to one page or less. A terms and conditions document should never be confused with War and Peace. One thing that's great about parking services is they can fit their terms and conditions on the back of a ticket. Try that with yours.
Make it sound as friendly as your marketing copy. It's ironic to read the warm, friendly tones of a company's marketing materials and then read their terse, unfriendly terms and conditions.

What other suggestions do you have?

Has Undercover Boss jumped the shark already?

Jeff Toister April 5, 2010

I regularly watch the CBS show, Undercover Boss, where top executives go 'undercover' in their own companies to find out what's really going on. Like many shows, there's a formula. Generally, a formulaic approach yields predictable results. If the formula yields predictable results, it better have good drama (see Law & Order). Undercover Boss has good drama, but it's more the daytime talkshow variety than the business variety. I think I'm losing interest.

Go ahead, watch the latest episode here first if you want.

Daytime talkshow drama

During the show, the undercover boss spends a day with five different employees. He inevitably discovers that several of them are facing quite a few obstacles and hardships in their personal lives. Later, the boss summons the employees to the corporate office, reveals he is the big cheese, and awards many of them fabulous cash and prizes to deal with their hardships. Just like any daytime talkshow host would.

This week, Rick Arquilla, President and COO of Roto Rooter met several employees who later received fabulous cash and prizes. One of them was Darrell, a technician who had recently returned to work after missing several months due to illness. Darrell's disability insurance claim was denied and he was now facing some financial hardships. During the 'reveal', Rick told Darrell that he had investigated the insurance claim and found out that a paperwork error had stopped Darrell's claim. Rick fixed the error and arranged for Darrell to receive all his disability payments. That's the kind of good a company can do when it cares about its employees.

But wait, there's more.

Rick also offered to buy Darrell a home gym, hire a nutritionist, and buy him food from a local health food store so he could improve his health. It was a great turn of events for Darrell, but absolutely unsustainable and meaningless for the rest of the company's thousands of employees. What about a wellness initiative that helps all employees get healthier while potentially reducing health insurance premiums over the long-term? How about working with the company's benefit's administrator to audit their process so other people don't get needlessly denied their disability claims?

Here are some of the other fabulous gifts and prizes from the show.

Candace received tuition for her special needs child to attend a private school. She's also getting $5,000 to apply towards her mortgage. Great move, but what about all the other employees with special needs children? What about all the other employees who could use $5,000 to apply towards their mortgage?

Chris is becoming a public speaker to share his struggles with addiction and help others. He has a great personal story, though I wonder how many other Roto Rooter employees have dealt with addiction issues and would like to get paid by the company to share their tale?

Henry is getting a 15 passenger van to help shuttle his son's basketball team to practices. What about all the other Roto Rooter employees who coach their kids' teams?

Dan is getting a garage so he and a few of his co-workers who are car enthusiasts can use it to work on cars. I'm at a loss for words on this one.

C'mon Rick - aren't you supposed to be a big picture guy? Well, we don't know if he is or not because we only see him lavishing Darrell and others with gifts. It's up to the show's editors to decide whether to share the rest of the story.

Social media experiment: the #1 way to engage customers

Jeff Toister April 1, 2010

I ran a fun experiment throughout the month of March to test how well companies that I do business with can engage me through social media. I gained a lot of insights along the way, but here’s the number 1:

If you want to engage your customers through social media, you have to communicate with them, not just at them.

There it is. Stop reading if you want. Profound, right? No, not really, but sometimes we need a Blinding Flash of the Obvious to help us out.

Below are the rest of my major discoveries from the experiment. You may want to first read about the experiment itself, or check out an overview of the four strategies I discovered. I’ll be releasing a ‘how to’ white paper in the next week or so that goes into even more detail. The white paper will be announced via this blog, Twitter, or you can send me an old-fashioned email and I’ll send it to you directly.

Am I more or less engaged?

The ultimate question is whether I was more or less engaged with these companies now than when the experiment started. Since I was already a customer, I wanted the answer to be “more” for all 12 companies in the test. The actual results were disappointing. Here are the companies in the test along with how they did:

More engaged. These companies responded to me quickly and directly.
Neutral. Office Depot is neutral simply because I didn’t have much interaction with them.
Less engaged. These companies ignored me on Facebook, Twitter, or both.

5 Questions Answered

I started my experiment with three questions. Two of my colleagues, John Curran and Grace Judson, suggested two more. Here are the answers to all five:

#1 Engagement: Does the business proactively try to engage me as a customer when I connect with them on Facebook and Twitter?

The answer is “no” for all twelve. I didn’t expect any “welcome to Facebook” messages or “Thanks for the follow!” Tweets, but I know some companies that do it so I thought I’d check. This didn’t affect my engagement since I didn’t expect any proactive response.

#2 Interaction: Does the business respond when I reach out to them via Facebook and Twitter?

The table below shows the results. A “N/A” means I didn’t try to contact them this way. (I tried to contact companies via Facebook or Twitter only when I had a legitimate reason to do so.)

#3: Social, Media, or both? Does the business focus on the social element, the media element, or both?

The graphic below represents my general observations of how much “social” and how much “media” the companies used.

#4 Does company size matter? (Thanks, Grace!)

No, size did not correlate at all with my level of engagement. Best Buy, one of the biggest companies in the group, does an amazing job of connecting with customers via social media. Their blueprint is one that large and small companies alike should follow.

Monitor frequently and respond quickly. Best Buy accomplishes this by dedicating several employees to social media. Small business owners need to make this a priority, trust an assistant, or get out of social media. Your customers really won’t care if you are ‘too busy to respond’. One business day is a good rule of thumb.
Personalize it. Coral is a ‘Community Connector’ at Best Buy. She responded directly to me via Facebook and Twitter, and was always friendly, enthusiastic, and helpful. Communicating with Coral was much more enjoyable than communicating with a nameless, faceless “Best Buy”.
Help in public, resolve in private. Coral and her co-workers make helpful information to customer questions available to all who are on their Facebook page or following them on Twitter. Have a gripe? Coral or one of her colleagues will politely request that you send them more details in private (via email or Twitter direct message) so they can help you out.

#5 Do companies have service level agreements? (Thanks, John)

I was surprised to learn that most companies don’t make it clear what their customers should expect. Only two companies (Studio Diner and Best Buy) provided information on why you should connect with them via Facebook. And, just two companies (Best Buy and Ultra Star Cinemas) described why you should follow them on Twitter.

A best practice would be to clearly identify what customers should expect from you on each social media outlet you choose to use. You can see more here.

What's next?

I’m recruiting a few companies to implement some of the best practices identified in this experiment to see if they really do work with other customers. Stay tuned for more details. In the meantime, please post your questions, comments, and ideas.

Social media strategies (4 of 4): Engage

Jeff Toister March 31, 2010

This post highlights the fourth of four social media strategies I uncovered in my experiment to learn how companies use this medium to engage their customers. I highlighted the first two strategies, the Placeholder and the Sell and Tell, last week. Yesterday, I highlighted the Forum. Today's strategy is called "Engage", as in "I'm using social media to engage my customers". The funny thing is very few companies in my experiment used this strategy.

Engage

This strategy is characterized by high levels of social interaction and high media. The catch is your media piece has to be interesting to your customers to entice them to socialize with your company.

When to use it

This strategy isn't right for every company because it can take a lot of time and effort, but there are a few situations where it can be tremendous.

Your products or services require some education. The Cuvaison winery is a great example here. They post YouTube videos of their latest wine releases to their Facebook page. If you are a wine club member, you can watch the short video and then wait for your latest shipment to arrive a couple days later. Comment on how you liked it and someone from the winery will reply!
Your brand truly inspires passion, and your customers want to interact with your company and with each other. Unfortunately, I didn't find any good examples here, even though I consider(ed?) myself a fan of these organizations.

How to use it

I guess I'm a bit lost here! The point of the experiment was to observe from a customer's perspective rather than simply repeat what so many social media gurus have explained much better than I can. However, I can offer two tips from my observations:

Respond! You risk alientating customers if you don't respond to comments or participate in conversations, especially the conversations you initiate!
Provide meaningful media. Give us something interesting to start the conversation. The Home Depot recently posted a video to their Facebook page that explained how to start a container garden and then asked, "What's the most unusual container you've used as part of a container garden?" They got some interesting responses and I found it helpful because it's something I'm looking into.

Tune in tomorrow for the exciting conclusion. One preview - 7 of the 12 companies in my experiment hurt their image in my eyes. Tomorrow I'll reveal all and tell you why I think a lot of companies have a long way to go.

Social media strategies (3 of 4): the Forum

Jeff Toister March 30, 2010

This post highlights the third of four social media strategies I uncovered in my experiment to learn how companies use this medium to engage their customers. I highlighted the first two strategies, the Placeholder and the Sell and Tell, last week. Today's strategy is called the "Forum". All the strategies are a function of how much 'social' and how much 'media' is used.

The Forum

This strategy is high on social, but low on media. It is generally used to engage in direct dialogue with your customers.

When to use it

The Forum is a great strategy when your customers have something to say. I've uncovered two general ways you can use it effectively. (There may be more, but I didn't see them in my own experiment.)

Customer service. If a customer is going to rant, make a suggestion, or sing your praises online, why not join in on the conversation? This strategy reaches beyond Facebook and Twitter to include any forum where your customers might congregate, such as Yelp or Trip Advisor. Best Buy is an amazing example of how to use this strategy effectively on both Facebook and Twitter.
Technical support. This strategy involves using social media as an extension of your support team. It can also encourage customers to help each other resolve technical challenges. Home Depot helped me find an answer to a product question I posted on Facebook by actually researching it and getting back to me!

How to use it

There are three basic steps to effectively using the Forum social media strategy.

Clearly state why your customers should participate. Encourage customers to participate and help each other. On Facebook, it's a good idea to post a few rules of engagement. Best Buy provides a wonderful example of how to do this.
Monitor and respond. You'll lose customers fast if you fail to check your messages and respond. Assign someone to monitor social media channels and give them the training and authority to respond quickly. Don't forget to look anywhere your customers might be ranting and raving, such as Yelp, Trip Advisor, etc. Active participation is a great way to amplify the positive comments, lessen the impact of negative comments, and spot emerging trends in your service levels.
Help in public, resolve anger in private. Best Buy provides a great example of when to answer directly and when to take it off line. In general, it's a good idea to respond to compliments and requests for help in public so others may benefit. If someone is using social media to vent in anger, respond to their post quickly and offer a private way for them to contact you (email, Twitter Direct message, etc.) so you can resolve their issue. This way, all the public sees is that you are responsive and caring.