How Shake Shack Stands for Something Good

It was 10:55am and there was already a line.

I was standing outside Shake Shack's Theatre District location in New York City with my friend, Jenny Dempsey. She was working nearby at the time and I was in town for a conference, so this was a rare opportunity to meet up. 

Jenny co-authors the fabulous Customer Service Life blog, which meant we naturally had to visit a place that offers outstanding customer service. Jenny suggested Shake Shack, but warned that we needed to get there early. "Tables fill up fast," she said.

The employees' friendliness immediately struck me when the doors opened at 11. They smiled, looked you in the eye, and seemed genuinely happy. The restaurant quickly crowded, but that friendliness must have been contagious, because guests were friendly, too.

Oh, and the burgers were as delicious as advertised.

It was a great introduction to a restaurant chain that was already legendary in New York City and was rapidly expanding. But I left wondering how a busy fast-casual chain could create an oasis of friendliness and welcome in the heart of New York City.

As I later learned, it all starts with vision.

That's Al Roker in the bottom right corner, getting ready to hand out samples of his Roker Burger to Shake Shack customers in Madison Square Park.

Meet The Roker Burger

On my second visit to Shake Shack, I took my mother-in-law, Mabeth, and my wife, Sally. 

The three of us were touring New York City and I wanted them to experience the phenomenon. We decided to visit the original location in Madison Square Park.

Just like my first visit, the employees were friendly and engaging. We also had an extra treat in store for us this time. A film crew was setting up in the park.

We soon learned it was a Today Show film crew. 

Al Roker appeared and began filming a segment. He had teamed up with Shake Shack to create a unique hamburger called The Roker Burger. We watched as Roker went through the line handing out samples and conducting a taste test. 

It was a great New York City moment. We enjoyed tasty burgers, received friendly and engaging service, and saw a celebrity filming a segment for a television show. I even used up a few seconds of my 15 minutes of fame when I appeared in the background of the clip. (At 2:33)

The Roker Burger ended up raising $20,000 for No Kid Hungry. 

The Shake Shack Vision

All of the things I described in my experiences come from Shake Shack's customer service vision, Stand For Something Good.

A customer service vision is a shared definition of outstanding service that guides the actions of all employees throughout the company.

This vision is evident in everything Shake Shack does.

Restaurant locations are carefully selected and designed to become part of the local neighborhood. Prospective employees are screened for friendly, outgoing attitudes, and then given constant encouragement to connect with guests. Food is carefully sourced to maintain quality and then prepared with an exacting process to ensure a consistent taste. Employees are given extensive training and then empowered to create great guest experiences.

Even the Roker Burger fits the vision. 

For Shake Shack, part of Stand For Something Good includes donating to local charities and organizing company volunteers to help feed the hungry, mentor kids, and clean up parks in the community.

The Secret of Alignment

Shake Shack is featured in Chapter 5 of The Service Culture Handbook because the company emulates the concept of alignment so well.

Yes, Shake Shack's customer-focused culture starts with the Stand For Something Good vision. You can use this guide to create a vision for your organization or team.

But the vision becomes real by aligning all aspects of company operations around it. While most organizations struggle to implement a vision because leaders treat it like a side project, Shake Shack's leadership has made the vision a central part of every decision.

You can test your organization or team's alignment using this simple assessment.

The results can help you start the conversation internally about where to start improving customer-focus and employee engagement.

How to Empathize With Customers

The airline passenger was angry about missing her flight.

It was her fault. She had been sitting at the bar a short distance from the gate and lost track of time. Those things happen in Las Vegas.

Our emotions often rise up to protect our ego, so she looked for someone to blame. The first gate agent she talked to explained the airline's boarding policies and maintained that he had made several boarding announcements. It was a perfectly rational and reasonable explanation, but it wasn't the validation she wanted. So the passenger exploded—ranting, raving, and cursing.

Another gate agent calmly took her aside.

He listened patiently as she told her story. He didn't try to argue with her or make her feel stupid. The gate agent used the partner technique to shift his body language so it was non-adversarial. He listened.

Then he simply said, "I can understand why you're angry. You shouldn't have to feel this way." 

The passenger quickly calmed down and thanked him. She accepted an offer to get re-booked on a later flight.

The gate agent accomplished this minor service miracle through empathy.

Empathy Defined

Empathy is a core skill in customer service.

Customers often experience negative emotions. When that happens, the rational part of our brain cedes control and can't function properly. Everything stops until those emotions cool down.

Empathy is the magic that can take angry customers out of the red. Here's how dictionary.com defines empathy:

the psychological identification with or vicarious experiencing of the feelings, thoughts, or attitudes of another.

When you empathize with a customer, it makes the customer feel better. Notice the airline gate agent wasn't agreeing with the passenger. He didn't say, "You're right, we should have sent someone to find you in the bar." What he did communicate was "I understand how you feel, and it's okay to have those feelings." He then took steps to help her feel better.

Of course, this is what makes empathy so difficult.

How do you empathize with someone you can't relate to? Unless you've missed a flight because you've lost track of time in a bar at the Las Vegas airport, it feels like a stretch to put yourself in this woman's shoes. 

Fortunately, there is a technique you can use.

Three Steps to Empathy

Here's a technique I've taught customer service professionals for many years.

Step 1: Consider why the customer is truly angry. For the airline passenger, there were three issues. She was stressed about missing her flight and being inconvenienced by a delay. She was embarrassed that she caused the issue. And she was upset about the lack of empathy from the first gate agent.

Step 2: Think about a time you felt the same way. Try to imagine a situation where you were angry or embarrassed about something that was your fault. We've all done something stupid. It may not have been missing a flight, but it was something.

Step 3: Use that experience to identify with your customer's feelings. When we feel angry and embarrassed, the last thing we want is to hear is its our fault. (That's the mistake the first gate agent made.) We want someone to tell us they hear us, that we're not so dumb after all, and that they would be happy to help us fix it.

This isn't an easy technique. I've seen many seasoned customer service professionals struggle with it. But think of the accomplishment if you can master it!

That airline gate agent used empathy to de-escalate what was quickly becoming a scene. He didn't just make himself look good, he represented his airline well.

And the passenger?

Some opportunistic by-stander swooped in and told her he saw the whole thing. He too empathized with her situation and then offered to buy her a drink at the bar.

That's Vegas for you.

Why Internal Competition is a Bad Idea

A vice president for a large financial services company asked me about internal competition.

He was thinking about creating a scoreboard to show branch managers how their particular location stacked up against other branches. The scoreboard would contain metrics from a variety of categories such as customer satisfaction.

The idea was to motivate managers to find innovative ways to improve the performance of their branch.

My answer surprised him. I told him I thought the scoreboard would lower performance by causing three problems. Here's my explanation.

1. Scoreboards reward selfishness

A branch manager might come up with new ideas to earn a spot at the top. But she might be reluctant to share those innovations with another manager she views as a competitor.

Managers are incentivized to keep good ideas to themselves.

2. Scoreboards discourage laggards

What if a branch manager sees his branch is far behind on the scoreboard? He might feel embarrassment that his branch is performing so poorly, but that embarrassment might not cause him to try harder as intended.

It may make him feel uncomfortable, disengaged, and defensive. Or he might just stop trying.

3. Scoreboards create inconsistency

Customers might be delighted at a high-performing branch, but what happens when they visit a low-performing branch? A service failure might happen just because best practices aren’t shared internally.

It’s hard to trust a brand when the experience varies widely.

Raise the Bar Higher Instead

The vice president would be better off encouraging all branches to elevate to the same high standard. Customers are more likely to do business with a company that offers a consistently good experience.

Starbucks earns loyal customers with remarkable consistency. Here are the Yelp ratings for the 10 Starbucks locations that are closest to my house:

Every single one is 3.5 or 4 stars.

Very few people would say Starbucks is their favorite coffee shop or serves the best coffee. But Starbucks is incredibly consistent and dependable. No matter where you are in town, you can expect a similar experience.

The opportunity for Starbucks in my neighborhood is also clear. The chain would have an even stronger presence if they could get all of their stores to a 4 star rating.

My advice to the financial services branch manager was the same advice that seems obvious for Starbucks when you look at this graph: raise the bar at all locations.

The competition isn't against other locations. It's against external competitors. And the way to do better is to raise the performance of all locations while maintaining consistency.

Here are a few ways to do that:

• Discover what top-rated locations are doing differently and share those best practices.

• Uncover what low-rated locations are doing differently and help them improve.

• Encourage all locations to raise their level of service together.

I call this process “finding your Betty.” It’s named after a customer service rep named Betty who helped an entire team improve its performance by sharing a best practice.

Take Action

The best solutions are often counterintuitive.

Lots of companies use leaderboards and contests to motivate employees. That doesn’t make it a good idea. Customer-focused teams rely on collaboration and continuous improvement to help everyone do better.

Here are two resources to help you find more counterintuitive solutions:

• Book —> Getting Service Right

• Course —> Quick Fixes to Attain Excellent Customer Service

Study: Surveys On Store Receipts Are "Total Garbage"

We've all gotten a survey invitation on a store receipt.

A 2016 study from Interaction Metrics found that 41 of the 51 largest U.S. retailers included a survey invitation on the standard receipt. The surveys were evaluated to see how useful and engaging they were.

Not a single one was fully engaging and scientific.

The study also found that 68 percent of the surveys were "total garbage," meaning the surveys were so flawed they weren't worth the time required to complete them.

You can view the entire study here. Below is a summary of the results along with some action items and resources to help improve your organization's customer satisfaction survey.

How the Study Worked

The study assessed surveys based on four criteria. Each one was weighted to reflect the relative importance of each category:

• Access: Ease of locating and beginning the survey (5%)

• Branding: Style reflecting the brand, correct spelling and grammar (10%)

• Engaging: Keep customers engaged throughout the process (35%)

• Accuracy: Survey design that yielded accurate data (50%)

The surveys were all obtained by making purchases from the retailer, either in store or online.

Accuracy Flaws Uncovered

Inaccurate data can prevent companies from taking the right action to improve service. 

Or worse, a survey might be gamed to yield high scores that disguise the fact that service needs to be improved at all.

Asking leading questions was one of the most prevalent flaws, showing up in 92 percent of the surveys examined. These are questions that are worded in a way that naturally leads customers to a particular answer. 

For example, Ace Hardware had this question on its survey:

How satisfied were you with the speed of your checkout?

The problem with a question like this is it assumes the customer was satisfied. This assumptive wording makes a positive answer more likely.

A more neutral question might ask, "How would you rate the speed of your checkout?"

Another issue was the use of overly positive wording that can bias a customer's response. The study found that 82 percent of surveys contained at least one question with overly-positive wording.

Here's an example from GAP:

The look and feel of the store was very appealing.

This question also suffers from vague wording. Does "look and feel" refer to branding such as signage, displays, and decor? Or does it refer to cleanliness and organization? Perhaps it means the store's layout?

Here's an example from the now-defunct Sports Authority, where a cashier biased the survey in another way. He stamped the expected response right on the invitation:

Engagement Flaws Revealed

Surveys reflect on your company's brand.

They're part of the customer journey. Many retailers have made their surveys so needlessly long or aggravating that the survey itself reflects poorly on the brand, like this egregious example from Buffalo Wild Wings that required customers to navigate through 39 different screens!

The average retailer's survey had 23 questions.

That's a tedious amount of questions to expect customers to answer. Nordstrom advertised its survey took just 2 minutes, but it contained 25 questions. The survey actually took 4 minutes to complete.

The study found that 13 percent of surveys were difficult to access. Walmart required not one but two receipt codes to be answered. Rite Aide, Ross, and Walgreen's all had broken links.

The best surveys are short and easy to complete. In many cases, you can capture troves of useful data with just three questions.

Resources

There are many resources to help you develop, implement, and refine your customer service survey while avoiding these mistakes. Here are just a few:

• Video with step-by-step instructions (You'll need a Lynda account. Get a 30-day trial here.)

• Shep Hyken's interview with Martha Brooke, founder of Interaction Metrics

• This survey resource page

United's Oscar Munoz Refuses to Acknowledge This Massive Problem

We all know about the United Airlines dragging incident.

Passenger buys a ticket and boards a plane. The passenger is later told to leave the plane, refuses, and gets dragged off by security. The world can't stop watching the horrifying video for at least a week.

Oscar Munoz, United's CEO, has been making the media rounds to tell everyone he's really sorry and the airline will do better. He's been interviewed by the Associated Press and appeared on ABC News and NBC News. 

On Friday, a statement from United Airlines announced "changes to improve customer experience." The statement also contained this quote from Munoz about the incident:

our policies got in the way of our values

That quote is a massive problem.

What Munoz doesn't understand, or won't acknowledge, is that United's values created those policies. And until those values change, things won't fundamentally get better.

Image source: United Airlines

What Are Corporate Values?

Corporate values are an aspect of corporate culture.

They provide guidance on how employees should act in the workplace. We often say "employees" in reference to frontline employees or perhaps line supervisors, but the term really refers to anyone in the company's employ, including executives.

People sometimes mistake written values for actual values.

A company might have a set of written values as United does (more on that in a moment). Those values have zero meaning unless they are actually guiding employee behavior.

In my research for The Service Culture Handbook, I discovered company after company where the written values weren't authentic. The real values in these companies weren't written, but you could see evidence of them in employees' daily actions.

This includes policy-making.

United's Corporate Values

In February of this year, United announced its first-ever customer service vision (a.k.a. "shared purpose") along with four corporate values:

We Fly Right On the ground and in the air, we hold ourselves to the highest standards in safety and reliability. We earn trust by doing things the right way and delivering on our commitments every day.

We Fly Friendly Warm and welcoming is who we are.

We Fly Together As a united United, we respect every voice, communicate openly and honestly, make decisions with facts and empathy, and celebrate our journey together.

We Fly Above & Beyond With an ambition to win, a commitment to excellence, and a passion for staying a step ahead, we are unmatched in our drive to be the best.

Now, compare those written values to the myriad of policies and operational decisions that led to a paid passenger getting dragged of a United plane.

The situation was caused because United needed four seats on a plane to get a flight crew to Louisville. If the crew didn't get there in time, the flight might be cancelled, which created severe cost pressure for operators.

Gate agents weren't notified about the crew until after boarding had begun. This is either a failure to anticipate a problem or a failure to communicate it.

Unconfirmed reports suggest that gate agents were empowered to offer a maximum of $800 to solicit volunteers to give up their seat. This was a Sunday evening flight, and the airline was offering to rebook passengers on a Monday flight, so you can see why this wasn't a compelling offer.

United's policy allowed gate agents to have passengers removed from a plane to accommodate crew members, so gate agents followed this policy. They called security for assistance when one passenger refused to leave the plane. 

All of those policies and operational decisions show that United's true values are cost-cutting and tight corporate control.

Crew scheduling in particular has dogged United for years. My most-read blog post way back in 2012 tracked a series of texts from my wife, Sally, as she endured United's comically lame operations while trying to fly home. 

Now, it's fair to assume that United hadn't fully disseminated and indoctrinated its new corporate values since they were created in February 2017 and this incident happened in April 2017.

But the CEO should be the new values champion. Instead, Munoz reflected United's old values in his initial letter to employees the day after the incident, where he blamed the passenger and commended employees for doing things right.

How to Avoid United's Values Problem

Having written values isn't enough.

Employees need to be aware of the values. They must understand what they mean. And they need to be able to describe how the values guide their actions.

JetBlue was one of the customer-focused companies profiled in The Service Culture Handbook. This airline leads the American Customer Satisfaction Index in customer satisfaction (ahead of Southwest Airlines!) while United is ranked near the bottom.

Unlike United, JetBlue ensures its policies are aligned with corporate values.

The airline has six values committees that review workplace polices and ensure each one is aligned with JetBlue's corporate culture. Each committee represents different groups of employees (gate agents, flight attendants, etc.) and committee members are elected by their peers.

New hires at JetBlue receive extensive training on the airline's customer service vision, Inspire Humanity. Supervisors regularly discuss the corporate culture with employees and executives visit each JetBlue location at least once per quarter to share updates and reinforce the culture.

Why My First Book Will Soon Be Hard to Find

I've kept some news under wraps for awhile. 

It concerns my first book, Service Failure. I didn't want to distract from the launch of my latest book, The Service Culture Handbook, so I've kept it quiet for a bit.

Now I'm ready to share.

Service Failure has gone out of print and I've reacquired the rights from the publisher, AMACOM. Frankly, I'm ecstatic! 

Here's what it means, why I'm so happy, and how this might benefit you.

What It Means

Out of print means that the publisher won't be printing any more copies of the book. AMACOM has also taken down the e-book from websites like Amazon's Kindle Store.

This means the only copies still available are new paperback copies that are still in inventory at retailers like Amazon plus used copies that are sold through various channels. You can also get the book on Audible.

Reacquiring the rights means I now own the rights to publish the book.

People don't realize this, but when you get a book deal like I did with a publisher, you sign over the rights to publish the book. This is the publisher's way of protecting their investment so you don't try to publish the same book somewhere else and introduce a competing product. In return, the publisher helps turn the manuscript into a finished product, secures distribution, and pays the author a royalty on sales.

Now that I own the rights, I can republish the book.

Why I'm Happy

AMACOM knowingly allowed Service Failure to become an interactive experience. 

The book was set to be released in November, 2012. Six weeks earlier, I received my advance shipment of author's copies and discovered a binding problem that caused the pages to fall out. 

AMACOM had the printer fix the issue and reprint the book, but the horse was already out of the barn. It had already shipped copies of the defective books to Amazon and Barnes & Noble. 

Even worse, AMACOM refused to make any effort to get the defective books back and replace them. The official explanation was it was cost-prohibitive.

This put me in a difficult position.

My name was on the book. It was my reputation on the line. And, because AMACOM owned the publishing rights, there was very little I could do about it.

Fast forward to 2016, four years after the book was published, and Amazon was still fulfilling orders with defective books. In fact, the defect rate was increasing to as high as 50 percent!

I finally had the leverage I needed to take action. After a brief negotiation through my agent, AMACOM agreed to give back the book rights.

How This Can Benefit You

Now that the book is mine again, I get a do-over.

That means I can republish the book with some new research and updated examples. If you own a copy of Service Failure, I'm going to get you a copy of the new book when if and when it comes out. (Details to be worked out...)

I can also give the book a new title.

Service Failure has a negative connotation. It might appeal to an individual buyer, but it's not the kind of book you buy and hand out to your management team because that would send a poor message. That clearly hurt sales.

A new title will make the book much easier to share.

So I have a question for you now. The original title was: Service Failure: The Real Reasons Employees Struggle with Customer Service and What You Can Do About It.

What do you think the new title should be?

How To Get Coworkers to Step-up Their Service

A question I often receive from customer service professionals is "How do I get my coworkers to improve their service?

It can be frustrating to feel like you are giving it your all while colleague settle for mediocrity (or worse).

Getting your peers to change is tricky. Approach a colleague the wrong way and you risk harming the relationship. Do nothing at all and things will likely stay the same.

That doesn't mean you are powerless. Here are three strategies you can try.

Image source: BigStockPhoto

Be the Model

"Who was it?!" the woman demanded. "Who is making us look bad?!"

I was facilitating a customer service workshop and was sharing the results of a secret shopping test I had conducted the night before. Four out of five employees I had shopped didn't use any of the company's service standards in my interaction.

This particular employee was incensed. She wanted to know who it was because she felt embarrassed to get such a poor report.

Sadly, she was one of the four people who I had visited who performed poorly. She didn't recognize me because she was too busy chatting with a coworker when I had been her customer the night before.

If you want your coworkers to improve, start by taking a long, hard, figurative look in the mirror.

You can't expect your colleagues to step up their collective game if you aren't doing the same thing. This means you need to be the model of outstanding customer service.

Aside from giving you more credibility with your peers, it’s inspiring to others when they see someone else going the extra mile. It creates subtle but powerful positive peer pressure for them to serve at a higher level.

Identify Shared Challenges

High performing teams work together to solve problems.

For example, a Tier 2 technical support team handled issues that were beyond the scope of expertise for the Tier 1 team. One problem was Tier 1 reps often unnecessarily transferred calls to the Tier 2 team that they should have resolved on their own.

Rather than build silos and cast blame, members of both teams met to identify the top reasons calls were transferred and then mark which ones could be prevented. A Tier 2 rep then put together a job aid that showed Tier 1 reps how to handle those issues on their own.

This approach solved a problem, but it also fostered a sense of teamwork between members of both teams.

Another opportunity is to share common issues with your boss.

Many employees assume that bosses are apathetic toward poor service if they don't take any action to correct it. My research indicates there might be another reason: most employees don’t pass along customer complaints!

The idea isn't to tattle on your coworkers. 

The point is to tell your boss about the top customer complaints you hear, along with some ideas or suggestions for improvement. It might be a policy that customers don't like or a common product defect.

Whatever it is, sharing customer insight with your boss may give him or her needed information to enlist the entire team in taking action.

Ask For Advice

One customer service professional, we'll call him David, wrote to me and explained that he was 26 and had just a few years of experience. He explained that he was the youngest person on his team, and most of his peers were 40 years old or older.

My suggestion to David was to approach his more experienced colleagues and ask them for advice on handling a particular customer service challenge.

Why? Two reasons.

First, asking a coworker for advice is a sign of respect. It shows them you value their wisdom and experience. And that respect makes them more likely to respect you back.

Second, it's human nature that we are our own most credible source of information. If I ask you for a suggestion on handling a particular situation, you'll probably give me a good answer but you'll also be more likely to remember to take your own advice the next time.

Conclusion

In many of the organizations I wrote about in The Service Culture Handbook, leaders cultivate a culture of positive peer pressure. 

Coworkers recognize each other for great performance. They cover for each other without question, which creates a social need for reciprocity (I've got your back, you've got mine). Veteran employees guide new hires to help them succeed too.

You can do your part by trying some of the techniques outlined above. Here's one more bonus technique:

Take a moment to recognize a coworker for doing something well.

Chances are, they'll appreciate you letting them know their contributions are valued. They'll be more likely to do it again. And, there's a chance they'll be a bit more receptive when you have some constructive feedback to share!

Lessons from The Overlook: Know Your Financials

Note: Lessons from The Overlook is a monthly update on lessons learned from owning a vacation rental property in the Southern California mountain town of Idyllwild. It's a hands-on opportunity to apply some of the techniques I advise my clients to use. You can find past updates here.

Many customer service leaders tell me they struggle with financials.

Things like margin, variable costs, and fixed costs are a mystery. Capital expense doesn't make any sense at all. Cost centers are confounding.

This makes it difficult to ask for money. 

You might want to invest in new technology, hire more staff, or boost wages to improve retention. Knowing the cost isn't enough. Fluffy platitudes about investing in service won't get you there, either. 

You need to convince executives there's a financial benefit to spending that money. 

I can relate. My wife, Sally, and I wanted to turn the garage at our vacation rental property into a game room. But first, we had to run the numbers.

Photo credit: Jeff Toister

Why We Wanted a Game Room

We thought it would be a great addition for our guests.

An analysis of similar vacation homes in the area revealed that guests generally looked for a few benefits:

• A well-equipped kitchen

• Expansive views

• A spa

• A deck

• Walking distance to town

Our property, The Overlook, already has all of those features except for walking distance to town. Pretty difficult to change that one.

A few rentals had a game room, which many guests called out as an added benefit, though not the primary reason they booked. Most game rooms had a pool table in a kitschy room that looked like somebody's basement from the 80s. 

We thought we could do better.

The Overlook has a detached single car garage. Guests don't expect to park in a garage, so we thought we could make better use of the space. Our vision was to finish off the garage and put in a ping pong table. 

Truth be told, we also really wanted a ping pong table to enjoy ourselves. 

Running the Numbers

First, it's important to know exactly how much adding a game room would cost. 

We had a few contractors come out to give us estimates. It wasn't pretty. The garage needed a new roof, a new side door, and new windows. The roll-up garage door was unsightly. The floor wasn't level. 

Total price tag, including a ping pong table, was $16,500.

Now that we knew the cost, we had to calculate the return. What would we gain financially from having a game room.

We talked to our property manager. She told us that in her experience, game rooms were nice added features, but it would be difficult to justify a rate increase on that alone. 

This actually jibed with our earlier analysis that guests liked game rooms, but it wasn't a primary factor when booking a rental.

If we couldn't get a rate increase, could we get more bookings? 

There are two factors that might drive this:

• The game room could be a tie-breaker between two similar properties

• Guests might be more likely to return if they enjoyed the game room

We didn't have a lot of data here, having only owned The Overlook since last October. So we took a guess.

The Overlook was already booked most weekends during the busy winter season. A game room couldn't improve upon that. But perhaps we could gain two extra rentals during the summer. 

Here's how that works out:

• Rate: $325 for two nights, $275 for each additional night. 

• Average stay: 2.5 nights 

• Total gain: $975

Would you spend $16,500 to gain $975 per year? Wait, the math gets worse.

Our nightly rate includes the cleaning fee. We also have to pay our management company and some other miscellaneous fees. That means our take on the $975 is really about $500.

Here's our payback calculation:

$16,500 ÷ $500 = 33

This means it will take us 33 years for the game room to pay off. Suddenly, that game room seems like a terrible business decision.

Apply This Lesson to Your Business

Let's step through what we did to run the numbers. You can apply the same lesson to an investment you want to make in your own business.

Step 1: Identify the costs. Know exactly what you're getting into. For instance, if you want to add staff, the cost isn't just their wage. It's the cost of employment taxes, benefits, equipment, etc. Costs are almost always underestimated.

Step 2: Identify the financial benefits. Do your homework to get an accurate estimate.  Many leaders make the mistake of making up numbers without doing their research. Those estimates are almost always too optimistic. For The Overlook, we analyzed the competition and talked to our experienced property manager who oversees more than 40 properties. 

Step 3: Calculate Your Return. The easiest way to do this is to divide the cost by the gain. This will tell you the amount of time it will take for that investment to pay off. Hint: executives usually want to see unplanned investments payoff within the current fiscal year.

Epilogue

There's one more lesson you can take from our game room example.

You can often find money in the budget for a project that the business owner or a key executive passionately believes in, even if the financial return isn't there. This means you need to do more than just run the numbers. 

You need to get your executive emotionally committed.

In our case, we imagined epic ping pong battles with family and friends. We wanted to put barn doors on the garage that opened wide in the summer to let in the cool mountain air. Perhaps a couple of bar stools for guests to sit on while waiting for the next game.

It was a terrible investment, but we really, really wanted a ping pong table. So yeah, we did it.

Garage before

Garage after

An Inside Look at Amazon's Fulfillment Center Operations

Do you ever wonder how Amazon orders arrive so fast with near-perfect accuracy?

The company's operational excellent is the backbone of Amazon's reputation for outstanding customer service. I recently toured Amazon's ONT2 fulfillment center in San Bernardino, CA to get an inside look at exactly how the company does it.

Here's a quick profile of this particular facility:

• Specializes in small and medium-sized items

• It's the size of 28 football fields

• Employs more than 2,500 people full-time

• 14 million products are shipped from here

• Amazon's oldest fulfillment center in California

The center is called ONT2 after the nearest airport (Ontario, or ONT) with the 2 designating this as the second center in the area.

The tour revealed cutting-edge technology seamlessly blended with smart logistical management. There was even a genius operational practice that was completely counterintuitive.

Pictures weren't allowed inside, but I took good notes on the process required to pick, pack, and ship your order to you.

Photo credit: Jeff Toister

The Pick Process

This is where the items you order are selected from inventory, or picked, and sent via a conveyor belt to a packing station. 

The process is initially quite counterintuitive. Inventory items are stored in seemingly random locations. One inventory bin might contain a stuffed animal, a video game, a protein shake, and a few other mismatched items. Amazon actually does call this "random stow."

Amazon puts items in all these random locations so they can assign individual pickers to tight areas. This minimizes time spent wandering around the warehouse. It also ensures that each picker has roughly the same amount of work.

Computers make this process possible. Pickers are routed by computer to maximize efficiency. (More advanced warehouses eliminate the walking entirely and have robots carry shelves of products to the pickers!)

The pickers in ONT2 push around carts with tote bins and carry around hand-held scanners. The scanner tells the picker what to pick next and where to find it. A series of three bar-code scans ensures pickers select the correct item:

1. Scan a bar code on the tote bin.

2. Scan a bar code on the shelf where the item is located.

3. Scan a bar code on the item itself.

The picker can't continue until these three scans are accurately completely. Once they are, the picker's handheld scanner directs the picker to the next item which may or may not be part of the same order.

The Pack Process

Once filled, pickers load their totes onto conveyor belts. The belts whisk the totes to packing stations where orders are packed for shipping.

Stations are separated into single-item orders and orders with multiple items.

For single-item orders, packers are prompted by computer to select the correct size box and pack the item. A series of scans ensures the correct item goes in the correct box. 

For orders with multiple items, packers first sort items from a tote onto a cart with multiple shelves so the items from each order are grouped together. An order might have items delivered via multiple tote bins if it contains items picked by different people. The computer and scanning process keeps everything organized.

Here, I was amazed at the speed at which packers operated. They selected items, assembled boxes (which are stored flat), put in protective filler, and taped each box shut in a matter of seconds. 

The Ship Process

Orders are routed from packing stations down a conveyor belt to something called a SLAM machine. 

SLAM stands for:

1. Scan

2. Label

3. Apply

4. Manifest

The machine scans boxes one at a time. A shipping label is then generated and applied.

The boxes are weighed as they travel down this line and the weights are compared to the expected weight for each shipment. If the weight is off, the box is automatically pushed off the shipping line into a quality control station for inspection.

I was lucky enough to see part of Amazon's rigorous quality control methods on display. Operators detected a problem with the SLAM machine where labels were being misapplied. They immediately shut down the entire line and attempted to fix the problem. 

The operators quickly isolated the issue to one of two label applicators on the line, so the disabled to problem applicator until a technician could arrive and restarted the line.

From there, boxes are automatically routed by destination and carrier (USPS, UPS, etc.). The boxes travel along conveyor belts until they reach a warehouse bay door where workers load the boxes into waiting trucks.

Take Your Own Tour

Cameras aren't allowed in the fulfillment center, but I did find a news story that showed behind-the-scenes video of this process.

Amazon currently offers tours of six facilities. Check here to find a center near you and book a tour!

What Maslow's Hierarchy Says About Customer Service Employees

We've all felt beaten up by a customer.

It's part of the job. A customer is angry, maybe even unfair. Intellectually, we know they're complaining about the product, the problem, or the situation.

The attack still feels personal.

Years of pithy advice tells us to "not take it personally." That's an instinctive impossibility. We're wired to take it personally.

What happens next is interesting. Some people are able to recover, overcome the instinct, and serve the customer with a smile. Others get defensive or angry, and service quality declines rapidly for that customer and perhaps the next customer, too.

If you manage customer service employees, or you serve customers on the frontline, it's important to understand the psychology behind this. 

Maslow's Hierarchy of Human Needs gives us a clear explanation.

Maslow's Hierarchy of Human Needs

In a paper written in 1943, psychologist Abraham Maslow proposed what's now famously known as Maslow's Hierarchy of Human Needs.

It ranked our basic needs as humans in priority order:

1. Physiological

2. Safety

3. Love and belonging

4. Esteem

5. Self-actualization

The idea was you had to meet highest priority needs before you could concentrate on the next highest priority.

So you'd be willing to risk your physical safety (priority #2) if you had unmet physiological needs such as food, water, or air.

Serving that angry customer is the lowest priority for humans, sitting at #5, self-actualization. According to Maslow's Hierarchy, we can only commit to doing this if our higher priority needs are being met.

Meeting Higher Priority Needs First

In my book, Getting Service Right, I shared a story about Paul. 

He was working in a nightclub's office when he received a call from an angry customer. The customer had apparently been contacted by his credit card company about a fraudulent charge and he assumed that someone at the nightclub had stolen his credit card number.

Here's an excerpt:

At first Paul tried his best to be helpful, but he quickly realized the man just wanted to vent. The customer's repeated accusations, "Your server stole my credit card number" and "You guys need to be more careful," soon wore thin. As Paul explained, "I could feel my blood pressure going up. I could feel my face get flush. I felt like, 'Don't accuse my coworker of doing something that you don't know that they did.' There are a million ways that credit card numbers get stolen. It was so frustrating to me."

Paul found it difficult to serve this customer because his #4 need, esteem, was being challenged. The desire to be awesome at customer service (self-actualization) took a back seat to a strong desire to avoid further insult.

It's even worse in other companies.

Paul actually liked his coworkers and felt a need to stand up for the server he felt was falsely accused. This suggests his #3 need, love and belonging, was being met in the workplace. Paul felt a part of the team.

But what if he didn't?

I encountered one of these employees on a recent trip to the pet store. This particular chain is infamous for constantly rearranging merchandise, so you can't find what you're looking for from one visit to the next.

An employee was helping me locate a certain brand of dog food when she started to vent. "I guess they [the pet chain's management] just want you to wander around so you'll shop more," she said. 

Notice the use of the word, "They." 

She didn't feel part of the team. Her sense of identity, at least at work, wasn't strongly attached to her employer. She clearly felt embarrassed and frustrated by a corporate policy and took steps to distance herself from it.

How could she possibly provide great customer service when she didn't care?

Take Action

Maslow's Hierarchy of Human Needs helps explain the old adage, "Happy employees lead to happy customers."

Many leaders make the mistake of using incentives and gimmicky programs to motivate their employees. Research shows employees don't actually have a motivation problem. The real issue is de-motivation.

Employees want to do a great job, but many feel they can't. 

Customer service leaders can do several things to overcome this challenge, foster a sense of team unity, and fulfill employees' need for love and belonging:

1. Create a customer service vision that provides a unifying purpose.

2. Make it easier for employees to achieve the vision.

3. Work together as a team to solve common problems.

You can take action too if you're an individual contributor.

While writing The Service Culture Handbook, I discovered many companies with customer-focused cultures have a peer recognition program. Coworkers recognize each other for delivering outstanding service that aligns with the company's vision.

You can do this even if you don't have a formal program.

Take a moment to recognize your coworkers for their efforts. Go out of your way to build positive and supportive workplace relationships. This will help make your organization a better place to work and it will become even easier to serve your customers.