Lessons From The Overlook: Review Your Vision

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.

"We've implemented a customer service vision, now what?"

That's a question I frequently receive from customer service leaders. A customer service vision is a shared definition of outstanding customer service. It's one thing to have one (here's my guide to writing yours). It's another thing to make it stick.

My wife, Sally, and I created a customer service vision when we bought The Overlook a year ago.

Welcome to your mountain community retreat.

Each word was carefully chosen. Looking back a year later, we're solidly executing 75 percent. Yet there's still 25 percent that needs work.

That's why it's important to do a vision review.

View from Suicide Rock, a popular hiking destination near The Overlook. Photo credit: Jeff Toister

Gut Check Your Customer Service Vision

The first step is to discuss the vision with a sample of key stakeholders. The goal here is to do a gut check and make sure it still resonates.

Our vision has four critical pieces:

• Welcome: guests should feel at home during their stay.

• Mountain: guests should enjoy what the mountain has to offer (ex: our view).

• Community: guests should experience small-town hospitality where people know people.

• Retreat: guests should have a relaxing visit at the cabin.

That was pretty easy to do with The Overlook, since it's really Sally and me. All four pieces definitely still resonate. We do have a conversation planned with the owner of our property management company since she and her employees are critical stakeholders, too.

It doesn't have to be a formal process. You can have these discussions in one-on-one conversations, team meetings, or even focus groups. 

Who to include can vary. Think of key people whose opinion is really crucial to the vision having widespread support. Here are a few you should consider:

• Senior leadership

• Middle management

• Frontline employees, especially experienced team members

• Vendors and contractors

• Shareholders

OK, you probably notice that's just about everyone except for customers. That's an intentional omission, which we'll get to in a moment.

Review Employee Engagement

The next step is to make sure your employees are still engaged with the vision.

An engaged employee is someone who understands what makes the organization successful (i.e. the vision) and is committed to helping achieve that success.

Employee engagement means employees will be able to give consistent answers to three questions.

1. What is the customer service vision?

2. What does it mean?

3. How do I personally contribute?

Our memories fade over time. Your employees may have been able easily answer these questions a year ago, but that's no guarantee the vision has stuck.

Doing this routine check-up will help you identify any opportunities to re-engage people.

Believe it or not, it was helpful for Sally and me to have this conversation. We exchanged our thoughts about question number three and renewed our commitment to achieving the vision.

Which led us to the next step in our review.

Evaluate Your Execution

Remember we initially left customers out of the discussion? Now it's time to include them. 

Here is where we gather customer feedback and other data to see how well it matches our vision. You can use your existing survey, customer interviews, and other data.

For example, we have a guest book at The Overlook. Our guests also receive a survey after their stay. It's fun to see what comments guests leave and see if there are any particular themes.

Our evaluation told us we're hitting 75 percent of our vision. Here are the high points:

• Welcome: guests consistently feel at home during their stay.

• Mountain: many comments and feedback focus on the mountains.

• Retreat: our guests really enjoy relaxing at the cabin.

The one missing piece is community. Our goal here was to find ways to connect guests to the surrounding community of Idyllwild. We want people to feel a part of this small town.

So our focus for Year 2 of owning The Overlook will be forging stronger connections between our guests and the town.

---

Why You Need Danger to Be Great at Service

It was a Monday afternoon, and droves of hikers were ascending San Diego's Cowles Mountain. 

It's one of the most popular hikes in town. You're rewarded with sweeping views of San Diego, the mountains, the ocean, and even Tijuana after a moderately steep 1.5 mile trek.

There are some drawbacks. The trail is dusty and worn from constant use. The beauty at the top is a little marred by the crowds. Loud conversations and even louder music can pierce the serenity. (Seriously, who brings music on a hike?!)

One peak and another 1.25 miles from Cowles stands Pyles. That's where I sat in blissful silence, soaking in the same view.

Fear was the only reason I had the entire trail to myself.

It's this same fear that causes so many customer service leaders to follow the crowd. It feels safe to do what everyone else is doing. 

Their reward is getting stuck on average.

Photo credit: Jeff Toister

Fear Leads to Average

The American Customer Satisfaction Index currently stands at 77 on a 0-100 scale.

What does it take to be at 77? Probably a few things:

• A decent product or service

• Reasonably competent management

• A customer service operation that follows standard practices

The challenge is there's nothing distinctive about average. A 77 won't set you apart from the competition. Your company won't be able to leverage the awesome power of word of mouth marketing. 

So why not do more? Why not truly be different?

The answer is fear. In my experience, executives typically make decisions about customer service based on two big fears. 

The first is money. Spending money is understandably scary. It's even scarier when the return is uncertain. While there are a number of ways to calculate the financial impact of customer service, it can be difficult. 

Which leads to the second fear, doing something stupid. Executives repeatedly turn to benchmarks for help making uncertain decisions. The rationale is it's harder to criticize something if everyone else is doing it.

The problem, of course, with following benchmarks is it inevitably leads to average.

How Elite Service Leaders Embrace Danger

The best customer service champions take calculated risks.

They aren't reckless. These leaders simply understand that rising above average means doing something different. The wisdom of the crowd will only take you so far.

I heard this consistent theme when I interviewed people for The Service Culture Handbook. Rather than following the crowds, elite service leaders established a clear picture of success and continuously took calculated steps to get there.

Here are just a few examples of things that customer-focused leaders do differently than the average leader:

• They constantly focus on culture, over a long period of time.

• They use data to confront tough realities, and find ways to improve.

• They take time to hire and train people the right way.

• They invest in making it easier for employees to serve.

• They develop empathy by taking time to talk directly to customers.

I imagine none of these items seem particularly revolutionary. The tough part is making all of them part of your day as a leader. The average leader merely pays lip service to these actions. The elite leader obsesses over them.

Which brings me back to my hike.

To get to Pyles, you must first hike Cowles. This means your hike will take longer. Some people are content with only going as far as the rest of the crowd, just like in service.

The trail to Pyles is well-marked. There's a sign at the top of Cowles. It's on the large trail map posted at the foot of the Cowles trail. People can see the trail but don't venture farther because they don't see other people doing it, just like in service.

Action Item

Set a course. Do something you know is right and stick to it. Here are some ideas if you aren't sure where to start.

It can be scary to go it alone. It's also exhilarating.

How to Attract More Customers with Google My Business

Many small business owners hope Google will bring in more customers.

Some try to advertise using Google Ads. Others wade into the mysterious world of search engine optimization (SEO). The latter often involves hiring an internet marketing wizard who makes strange suggestions for your website.

There's another way Google can help you bring in more customers. It's easy and it's free. Let me show you how this works.

I'll be arriving in Watertown, South Dakota tonight to speak at a Watertown Convention and Visitors Bureau luncheon tomorrow.

Naturally, I need to find a place for dinner, so I Google "restaurant watertown sd." Here are the search results:

Get Listed

Wouldn't you like your business to be one of those top choices when a customer searches for something relevant?

Notice Google prioritizes three options. It shows each one on a map. At the bottom is a link labeled "More places" where I can search for additional restaurants. 

All of the additional search results, including TripAdvisor and Yelp's "Best 10" lists appear in the search results below this box. 

That's pretty good visibility to a prospective customer. I'll see even more choices if I click on "More places" or click directly on the map. This also reveals a larger map that shows where each business is located.

The good news is these restaurants did not pay for advertising to get listed there! These search results come from Google My Business.

Companies can claim a free listing by providing some basic information such as your business name, address, phone number, business category (restaurant, etc.), and website. It's also a good idea to include your hours of operation.

One word of caution—make sure you keep this information up-to-date. You want your customers to know if you change your hours of operation, update your restaurant menu, or move to a new location.

Add Details

Customers can see more information when you click on an individual business listing. Here's what I see when I click on the listing for Guadalajara Mexican Restaurant.

Notice the photos at the bottom. You can upload photos of your business to your Google My Business listing and Google will display them alongside photos contributed by customers.

This is an excellent way to visually entice people to pay a visit!

Improve Your Ranking

Google uses an algorithm to decide which order to display businesses when customers search for particular terms. There are three primary factors that contribute:

• Relevance

• Distance

• Prominence

Relevance refers to how closely your business matches what a person is searching for. The best way to improve your results is to make sure your Google My Business listing is complete and accurate.

Distance is Google's attempt to provide the closest options to the person who is searching. Not much you can do about that one aside from opening a ton of locations all over the place. That may not be feasible, so...

Prominence is Google's estimate of the business's popularity. There are several factors that contribute to this. A big one is the number and quality of Google reviews.

Reviews, my friend, can be used to your advantage because they are often overlooked by big businesses!

Maximizing Review Power

There are two ways to think of reviews. One is how Google uses them and the other is how customers view them. Let's start with Google's own description:

Google review count and score are factored into local search ranking: more reviews and positive ratings will probably improve a business's local ranking.

OK, so it's great to have lots of five-star reviews. No surprise there. 

Some businesses go to great lengths to get good reviews. They provide incentives. Employees are implicitly encouraged to engage in survey begging.

Do yourself a favor and skip those gimmicks. Pressuring customers for good reviews can hurt service quality. There's another way to improve your reputation that customers will appreciate.

Let's look at the first few reviews for Guadalajara Mexican Restaurant in Watertown:

This restaurant has a terrific overall rating of 4.4 stars (out of five).

Now, some business owners might freak out because there are a few bad reviews. The first review shown is only three stars and is somewhat critical.

This is actually a plus!

That's because a few negative reviews can make a business more trustworthy. Customers are wary of any business that has all positive reviews since it raises suspicions that the reviews may be fake.

There's another plus here as well. Notice the response from Carlos Vega, the manager. Vega responded quickly, apologized without getting defensive, and invited the customer to return. 

This tells customers that management is listening to feedback. Presumably, the restaurant is using this feedback to continuously improve.

These Google My Business listings are for individual locations. Most large businesses I see fail to respond to customer reviews. That's because social media is typically handled at the corporate level. 

Here's where the personal touch of a small business can really shine.

Resources

Here are a few resources to get you started.

1. Get your Google My Business listing and make sure it's up-to-date.

2. Learn how Google determines business rankings.

Of course, there are other places a customer like me might search for a business. The big ones are Yelp and TripAdvisor and your business should have a presence there, too. Each offers a free business listing.

My online training course, How to Serve Customers Using Social Media, can help you make sense of them all. You'll need a Lynda.com account to access it, so here's a 30-day trial if you're not already a subscriber.

The Amazon Playbook for Speed and Agility

It's no secret Amazon is a customer-obsessed organization.

What's fascinating to me is how they achieve this obsession. Former Amazon executive, John Rossman, shared some of the company's secrets in a keynote address at ICMI's Contact Center Demo and Conference last week.

His presentation shared insights from his book, The Amazon Way, which highlights 14 leadership principles Amazon follows to drive its legendary customer service. Rossman called this Amazon's playbook for speed and agility.

Here are a few take-aways that really stood out for me.

Photo credit: Jeff Toister

Customer Obsession is #1

Rossman made an interesting distinction between a company that is merely customer-focused and an organization that is customer obsessed.

He compared employees in customer-obsessed organizations to college football fans for their insane levels of devotion and enthusiasm. This obsession goes beyond a superficial acknowledgement that service is important. According to Rossman, you must "be willing to do really hard things over a long period of time. 

This really resonated with me. A long-term commitment to continuously improving the service culture was a common trait of leaders I interviewed for The Service Culture Handbook.

One example Rossman gave was the empty chair. He described how Amazon leaders often leave a chair empty during meeting, so the chair can be figuratively occupied by the customer. 

It's a reminder to never lose focus on what is most important.

Reduce Friction

Rossman described how Amazon is constantly looking for ways to make things easier for customers.

One opportunity is internet connected devices. These are rapidly changing how consumers purchase common household items such as groceries.

For example, the company introduced the Dash Wand in 2014. It was a small device that customers could use to order groceries from Amazon by scanning the barcodes of products or saying the name of the product into the device.

A year later, Amazon introduced the Dash Button, which allows customers to re-order specific items like laundry detergent with a single push of a button.

Buying groceries online has been around in some form for about 20 years. Amazon is just making it easier.

Invent and Simplify

This is closely linked to reducing friction. Rossman described how Amazon often takes aim at the worst part of of a customer experience and tries to simplify it. He said, "Making things simple is as important and hard as inventing."

A great example of this is Amazon Go. 

Most consumers would agree that the checkout line is worst part of grocery shopping in a traditional supermarket. Grocers have studied different ways to make lines go faster, such as self-checkout stations, 15 items or less express lanes, and cross-training employees to serve as back-up cashiers as needed.

Amazon took another approach and simplified the process. The company has invented technology that allows customers to skip the line altogether.

This same philosophy guides the company's internal operations. 

Earlier this year, I had the opportunity to tour an Amazon fulfillment center where I was able to see first-hand how Amazon gets orders out the door so quickly and accurately. There were several things the company does differently than the typical fulfillment center that in hindsight make perfect sense.

Amazon's Service Philosophy

Rossman explained that "most customer interactions are the result of either a defect or an error."

So the culmination of Amazon's customer obsession, quest to reduce friction, and invent and simplify philosophy centered around avoiding contacts in the first place.

If you think about it, that's really how Amazon has cemented its reputation for outstanding customer service. You don't hear tales of Amazon employees going above and beyond like you might with some other companies.

What you experience is the ability to quickly order a product with minimal effort and have it delivered within days or even hours.

Book Review: Be Amazing or Go Home

Buy on Amazon

Advertising disclosure: We are a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for us to earn fees by linking to Amazon.com and affiliated sites.

Shep Hyken's new book gets to the heart of what make someone exceptional at customer service.

The genesis of Be Amazing or Go Home was a conversation Hyken had with one of his own employees. This person had been an outstanding contributor for about a year until something changed. Suddenly, her commitment wavered and she began delivering sub-par results.

Hyken's company, Shepard Presentations, operates under the customer service vision, "Always Be Amazing!" He worked with his employee to help her fulfill the vision until it became apparent she had lost her desire. He finally gave her two choices, "You can be Amazing... or go home."

The story has a good ending. His employee decided to go home, and eventually found a new job that was a better fit. She and Hyken are still on good terms. And Hyken's employee was the one who suggested their conversation would make for a good book!

It did.

Amazement Defined

This is a concept that Hyken regularly discusses in his books. Here's his definition:

Amazement is a predictable and consistent above-average experience.

I appreciate that Hyken doesn't try to paint a picture of some over-the-top, unsustainable service experience. He correctly argues that doing things a little better than the competition over time will cement a reputation for amazing service.

So it's not a one-time grand gesture. Amazement is what you create when you work at delivering above-average service every single day.

The Seven Habits That Create Amazement

Hyken describes seven habits that create amazement.

The book is aimed squarely at individuals, though these are definitely habits customer service leaders can share with their teams. Even a freelance consultant (like me) can pick up some wonderful ideas.

I won't spoil them all (buy the book!). Instead, I'll point out one of my favorites: Amazing People Are Authentic.

This habit really resonated with me. Some of the characteristics of authenticity include being yourself, personalizing your interactions with others, and being as good as your word.

Hyken himself exemplifies all of the seven habits described in his book. These aren't ideas he made up just to write his latest bestseller! He truly lives them each day.

If that isn't authentic, I don't know what is!

My Favorite Books, Podcasts, and Blogs for Customer Service Leaders

Crowdsourcing can be an interesting way to get ideas.

For example, ICMI hosted it's Contact Center Demo and Conference in Las Vegas this week. Vee Rose used the conference hashtag to tweet a request for customer service leadership book and podcast recommendations.

@CallCenterICMI #ccdemo Any great book/podcast recommendations for CS leadership inspiration?

— Vee Rose (@jainyrose) September 27, 2017

It's been awhile since I compiled a list of my favorites, so I decided to write this post in response.

Books for Customer Service Leaders

Full disclosure: I've added affiliate links to each book's Amazon page, which means TPS gets a referral fee for each purchase. These are all books I've read and thoroughly enjoy.

Uncommon Service Frances Frei and Anne Morriss make a compelling case that a company can't be great at everything, so customer service leaders must make difficult decisions about where to focus and build on strength.

Amaze Every Customer Every Time Any book by Shep Hyken is bound to be interesting and useful. This one in particular focuses on ways that Ace Hardware developed a strong service culture. Hyken explains how service leaders can implement each of these tools in their own organizations.

Winning at Social Customer Care Dan Gingiss wrote this excellent playbook on how to run a social customer care operation. He draws from experience at organizations like Discover and Humana and is currently the Senior Director of Global Social Media at McDonald's.

Strategic Customer Service John Goodman (the customer service guru, not the actor) is responsible for the famous statistic about angry customers telling 10 friends. He brings a refreshing, data-driven approach to help service leaders understand what really moves the needle.

Kaleidoscope The latest book from Chip Bell is fun. It's packed with wonderful stories and ideas for innovative service. Look closely and you'll see that Bell reveals a clever strategy. Going the extra mile is unsustainable while being unique can set your business apart.

The Service Culture Handbook This is my own book. I wrote it to provide leaders with a step-by-step guide they could use to get their employees obsessed with customer service. There are many contact center examples plus profiles of other leading companies.

Podcasts for Customer Service Leaders

CallTalk A podcast about contact centers! Bruce Belfiore and his guests cover a wealth of topics related to contact center customer service and experience. Belfiore is the CEO and Senior Research Analyst at BenchmarkPortal, and he makes his living studying contact centers.

The Net Promoter System Podcast Rob Markey conducts in-depth and insightful interviews with customer service leaders who use the Net Promoter System (NPS) to better understand their customers and drive continuous improvement. 

Crack the Customer Code Adam Toporek and Jeannie Walters host a wide variety of customer service and customer experience experts on their podcast. Both are accomplished experts and consultants who frequently supply their own numerous insights.

Amazing Business Radio Shep Hyken brings his signature enthusiasm for customer service to this series featuring interesting and fun conversations with customer service leaders. Hyken is one of the tops in our field and always worth listening to!

Frank Reactions Tema Frank hosts this podcast where she and her guests discuss the intersection of the digital era and technology in customer service. Her message really resonates with me as someone who is constantly striving to help employees do their best.

Blogs for Customer Service Leaders

Though this wasn't part of the request, here are a few blogs I regularly read:

• Customer Service Life

• CX Journey

• 360 Connext

• Shep Hyken's Customer Service Blog

• Customers That Stick

• Customer Centric Support

• One Mile at a Time

What I Learned Taking The No But Challenge

For the past two months I've tried to strike the word "but" from my vocabulary.

It's not easy. I'm not even sure it's a good idea to go 100 percent but-free. Maybe but-light would be better.

My quest stemmed from an interview with Evan Watson where he described how he used improv training to help customer service agents better serve customers. Watson explained one of the main tenants of improvisation is agreement.

The idea is you try to find agreement with the other person to keep the improv scene or the customer conversation going.

The word "but" feels like it stops agreement. It's used when you say one thing and then say something completely different. As in, "I'd like to help you, but I can't help you."

So I wondered what it would be like if I stopped using that word with clients and colleagues. The results have been revealing.

Background on the Challenge

There are times when the answer to a question really is "No." 

The natural appendage to "No" is "but" when we're trying to be helpful. As in, "Can you meet on Tuesday?" and you're booked on Tuesday so you might reply, "No, but I can meet on Wednesday. Does that work for you?"

While it seems helpful, there's also something negative about it. This gets amplified in service situations. As in, "Your app isn't working, can you help me fix it?" A reply of "No, but you can check our website" doesn't feel great.

It's somewhat similar to my own concept called trigger words. These words, when used at the wrong time, can trigger a customer's anger. Jeremy Watkin refers to them as "stop words," which I think is the same thing.

Shep Hyken recently wrote a blog post describing how subtle changes to the way we phrase things can influence how customers perceive them. 

All this made it seem like an interesting challenge.

Please don't get me wrong. I don't think the word "but" is really horrible. It's not like saying "ain't" which is universally known to cause your mother to faint. My goal here was simply to elevate my game.

It's Hard to Get Rid of But

I quickly learned the word is instinctive, and instincts are hard to change.

People would ask me something and I'd instantly infuse my response with "but." Someone asking, "Can you help me with this project" would generate an instinctive "No, but I have some resources I can share."

It's agreeable, yet disagreeable at the same time.

It's hard to get a take-back in a verbal conversation, though I realized you can take advantage of written correspondence. 

For example, I got an email from a prospective client who wanted to have me speak at her company's all-staff meeting in December. My schedule is completely full in December so my first instinct was to write, "No, but please think of me for next year's meeting!"

Stop. Delete. Re-write. I realized she doesn't care about next year's meeting because she's trying to plan this year's meeting.

What I ended up writing was, "I'm sorry to say my calendar is completely booked through December, including the dates of your all-staff meeting. Is there another way I might help you?"

I think I'm on to something because she sent me a very nice note in response.

Say Yes 'Til It Hurts

The word "but" is often triggered by a "no," so one way to avoid but is to say "yes" until it hurts.

I got a call last week from the leader of an alumni group I belong to. She asked me to deliver a keynote presentation at a student conference that was just three weeks away.

My first instinct was to politely decline. I'm very busy with multiple deadlines and extensive travel, so squeezing this in would be difficult.

Yet I realized this was an opportunity to give back to an organization I care about and meet some of its newest members. I ultimately avoided saying "No, but" to this request by saying "Yes."

Obviously, this challenge isn't good for my time management. 

The bigger picture is it causes me to pause and re-think whether there really is a realistic way I can say "Yes." Sometimes, the answer still is "No," though not as often as I might initially think.

Apply Mental Flexibility

Avoiding but can require a lot of mental flexibility.

A colleague recently emailed to invite me to a special event he knew I'd be interested in attending. I'm going to be out of town that day, so I was tempted to write, "I can't make it, but I can share this with a few others I know will enjoy it."

There's nothing really wrong with that response. I'm just trying to do better, so I wrote, "I’ll be out of town that day, which is too bad because it sounds like a fun event. I’ll share this with the few colleagues I know in the area in case they’d be interested."

This whole thing is a work in progress. It takes extra effort to eliminate these buts. I think it's worth it.

The idea is to be more agreeable. For example, my wife and I had dinner with friends last night. One of my friends asked, "Are you still traveling a lot?"

I replied, "Yes, but I will be slowing down soon, so we can get together more often!"

Don't Let Poor Reading Skills Crush Your Support Queues

It seemed like a simple question.

My wife, Sally, and I want to install a smart thermostat at our vacation rental property to make it easier to control heating costs when we don't have guests. I went to the website for a popular brand and searched for documentation on vacation rentals.

Finding nothing, I started a live chat session. "Can you share documentation on using your product in a vacation rental property?" I asked.

The response was a link to an article about going on vacation. Not quite right. After a few back-and-forth messages the agent agreed to search for something and email me.

The email was a link to articles about setting the thermostat when you go on vacation.

Situations where agents don't apply basic reading comprehension skills are frustrating. It unnecessarily wastes customers' time. In my case, it drove me to a competitor.

Here's a closer look at the problem and a few solutions.

The Comprehension Problem

The NBC app wasn't working on my iPad, so I submitted an online support ticket.

(While I normally hide company names when I share my own negative service experiences, I've provided this feedback to the company multiple times.)

The text from my support ticket is at the bottom with the response at the top. This response had two big misses that show the responder didn't fully read or understand my question. 

First, the response asked me to search for my provider, even though I clearly state my provider in my message. 

Second, the emailer asks for the type of device and OS I'm using, even though that information is clearly identified in the personal data attached to the email. (I removed that portion for privacy.)

**Bonus question to my technical friends** Do you think this response came from a human, a bot, or a human pretending to be a bot?

What Causes These Reading Issues?

Let's set aside an obvious possibility, that the agents hired for these jobs are not screened for appropriate reading skills.

That may be true, yet there are still other possibilities.

One is a focus on productivity, not quality. Look back at the email and you'll see some signs:

• The ticket is marked at the top of the email as solved. (Makes ticket closing numbers look good.)

• This is clearly a pre-written template.

• The sender ignored information I provided.

Another possible root cause is a lack of quality monitoring. Here's a sneak preview from a study that will be released by ICMI in October. The chart shows the percentage of contact centers that monitor various channels for quality.

Source: ICMI

This graph shows that most contact centers are monitoring calls while more than half aren't monitoring email or chat. The stat for social media is just sad.

So if an agent exhibits poor reading skills, chances are the boss isn't paying attention. And if the boss isn't paying attention, you can be sure the agent isn't getting any feedback on how to do better. 

Solutions

An immediate action is to review a sample of written communication from your agents.

I did this exercise as a contact center manager and was shocked at how many emails contained a mistake or weren't as helpful as they could be. 

You may also consider changing your support procedures:

• Create a customer service vision that focuses on customers, not transactions.

• Implement quality monitoring for written channels.

• Incorporate a reading comprehension assessment in your hiring process.

Of course, all agents could use help with some skill development from time to time. Check out online courses from customer service writing expert, Leslie O'Flahavan:

• Writing For Social Media

• Writing Customer Service Emails

• You'll need a Lynda account, so here's a 30-day trial

Lessons From The Overlook: Pricing Strategy

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.

Pricing strategy can be tricky.

One thought is customers naturally want to pay as little as possible. So you can bring in more customers if you cut your prices. That's what Amazon is betting on by dramatically cutting prices at newly acquired Whole Foods. The challenge is lower prices equal lower profit margins, so you'll need to sell a lot more to make more money.

Another approach is to charge a premium. This way you can sell to fewer customers and still make money. Of course, you want to avoid raising prices so high that nobody will pay them.

My wife, Sally, and I decided on a third pricing strategy. We wanted The Overlook to be an excellent value for the customer we wanted while appearing too pricey for customers we didn't want.

Here's what we did and how you can do it, too.

We like to think The Overlook is a little nicer than our competitors. Image courtesy of JoniePhoto.

Define Your Target Customer

One thing you'll notice about The Overlook is each room has just one bed.

There are no side-by-side twin beds. No bunk beds. The sofa isn't a pullout sleeper. We have four bedrooms and four beds (two king, two queen). Our advertised guest limit is eight.

This is very intentional.

We want a certain customer who will enjoy the peacefulness of our cabin. It's often extended families (mom and dad, the kids, plus grandparents), a couples weekend, or two families meeting in the mountains. Our guests enjoy the cabin's amenities plus a little elbowroom.

There's also a customer we don't want—the bargain hunter who is looking to cram as many people as possible into a cabin to maximize the cost per person. 

Those guests create extra wear and tear without any extra revenue. More things go missing and more damage occurs. We've had a couple of renters sneak in more than eight guests and the cleaning alone was always a challenge after these guests had gone.

Other cabins in Idyllwild pack 'em in. Guests sleep on bunk beds, in lofts, or air mattresses in the living room. These cabins typically offer fewer amenities. We think the bargain hunters are willing to make that trade-off and will stay in those places instead of ours.

A good pricing strategy starts with your target customer. What are the characteristics of the customer you want and can you serve them profitably?

Competitive Analysis

Serving customers profitably brings us to the next step: conducting a competitive analysis of your pricing.

This means comparing your prices to what your competitors are charging. We started with the other cabins managed by our property manager that slept six or more guests with three or more bedrooms.

The Overlook was the least expensive of the four-bedroom cabins. While our cabin also sleeps fewer people than the other four-bedroom options, it also has more amenities.

For example, our cabin is the only one with a view. And only one other four bedroom cabin has a spa. Our research shows that our guests want a spa, good views, a nice fireplace, and it should be pet-friendly. The Overlook checks all four boxes.

Here's how our pricing looks compared to just those cabins with the same amenities:

Not as many options! And the lower-priced cabin is much smaller and is really only comfortable for two couples. 

We also compared The Overlook to cabins in the area that weren't managed by our property manager. There were plenty of lower-priced options, but The Overlook was on the low-end of the scale when you just compared cabins with similar amenities.

And our price includes the cleaning fee, which can be $100 or more at other vacation rentals.

Our Pricing Decision

We ultimately decided to raise our nightly rate to $325 for the first two nights, $275 for each additional night.

Here was our new positioning when compared to our property manager's other cabins:

We wanted to price on the higher end of the market to deter bargain-hunters who were not our ideal customer, while remaining an exceptional value for the customers we were trying to attract.

The results have been good so far. Our guests have been very pleased with the cabin and the amenities. They've consistently commented on enjoying a peaceful and relaxing stay.

Best of all, revenue is up 5 percent over last year and none of our guests have trashed the place.

The Best Way to Ask Employees About Training Needs

You may be tempted to survey employees to ask about their training needs. Don't.

Asking employees what training they need is like asking young kids what they want for dinner. An enthusiastic answer doesn't mean that's what they need.

I once worked with a payroll department that was struggling to serve its internal customers. They frequently couldn't process payroll on time and made many errors. The team was denied a request for additional staff so they asked me for time management training.

It turned out they really needed a better process. 

We worked together to map the existing process, identify bottlenecks, and implement a new workflow. Productivity immediately improved by 25 percent and errors went down to nearly 0.

No training required.

This won't always be the case. Employees often need training to help them do their jobs. Unfortunately, asking them what training they need will often yield what they think they need, not what they actually need.

Here's a better way to ask employees about training needs.

How to assess employee training needs

The biggest mistake managers make when assessing training needs is to assume employees need training. There are many cases, like that payroll department, where another solution is needed. In other situations, employees need less training or training on different skills than you originally thought.

There are a few steps you should take before asking employees about training.

Step 1: Identify business goals

The purpose of training is to help employees develop the knowledge, skills, and abilities they need to do their jobs or a task more effectively. Start the training discussion by thinking about a problem you're trying to solve, such as improving customer service, reducing complaints, or using a new piece of equipment. Resources are limited, so we want to focus our training investments on areas of business need.

Step 2: Identify success drivers

The next step is to identify the key drivers that contribute to that goal. For example, Palo Alto Software decided to focus on customer retention.

In an interview with Celeste Peterson, a Customer Advocacy Supervisor, Peterson described three key drivers of customer retention:

• Customers logged in to the software more than once in the first week they signed up.

• Customers were able to easily access help when they're confused or frustrated.

• Customers understood the value of paying for a full year of service upfront.

Customers who cancelled their subscription were more likely to have experienced a problem in one or more of those areas.

Step 3: Determine key behaviors

Once you identify what drives success, determine what employee behaviors lead to good results with your key drivers. This step usually involves observing your employees work or having discussions about what’s working and what’s not. (Notice you’re not discussing training just yet.)

When in doubt, I always look for a Betty. A Betty is that successful employee who figured out a great way to do things. I call this employee Betty because that was the name of the employee who taught me the concept.

Palo Alto Software determined that its customer advocates (customer service reps) needed to do two things in particular:

• Provide helpful support to guide new customers through the account setup process.

• Use positive phrasing when customers are confused about annual billing.

Once you know what your employees need to do, it’s finally time to assess employee training needs.

Training Needs Analysis Questions to Ask Employees

Once you've identified what employees should be doing the next step is to find out what employees are actually doing.

The best way to do this is to observe employees in action. Here is when you can ask a few questions:

• What do you do now?

• Why do you do it that way? (If it's different than expected.)

• What's preventing you from achieving your goals?

For instance, Peterson observed her team at Palo Alto Software to see how they handled situations where a customer complained about billing issues. Many customers signed up for annual billing to get a discount, but didn't realize they would be charged for a year's worth of service upfront.

In the past, customer advocates would offer to refund the charge and convert the customer's account into a monthly one.

This seemed like a customer-friendly, low-friction approach but it was actually costing customers money in the long run since monthly accounts billed at a higher rate than annual subscriptions. Monthly customers were also more likely to cancel.

This observation revealed a simple training need—customer advocates needed to learn a better approach to handle complaints about annual billing.

Here's how Peterson described the new approach she trained her team to use:

"Now, rather than immediately addressing their confusion and apologizing, giving a negative impression, we empathize, and focus on the positive, that the annual subscription provides the benefit of a 40% discount by collecting for 12 months in advance. We also let the customer know that we're happy to convert it to the monthly option or cancel and refund if they prefer, since we have a 60 day money back guarantee."

Notice Peterson used data analysis, employee observations, and dialogue with her team to identify this very specific training need. No surveys were involved.

There is a case for surveys when there's a larger audience.

For example, I worked with a client where 700 people will need training on the organization's customer service vision. In this case, the survey is a convenient way to ask people for their current understanding of the vision so the training can be tailored to their specific knowledge gap.

Conclusion

Asking the right questions up front made a huge difference at Palo Alto Software. These questions were focused on what employees needed to do their jobs, not what training they wanted.

Peterson's employees may have asked for customer service training if she simply asked what training they wanted. That might have resulted in a half-day training class on serving angry customers or having each person take my one-hour Working With Upset Customers course on LinkedIn Learning.

Doing an upfront needs analysis allowed Peterson to make a bigger impact by offering very limited training on a specific technique for a particular situation.

You can learn more about assessing employee training needs by taking my Needs Analysis course on LinkedIn Learning.

Welcome from Instructional Design: Needs Analysis by Jeff Toister