Before you can find an answer, you have to know the question.

I had an interesting conversation the other day. I have a colleague who is a consultant, and he does some volunteer work with SCORE, an organization that provides mentoring and other services to small business owners. Recently a client asked if he knew anything about salesforce, and he asked if she was referring to the web-based CRM tool, www.SalesForce.com or to something else. Since he answered her question with another question she concluded that he would not be able to answer her question.  That was an unfortunate assumption because my colleague probably did know the answer. As the conversation progressed, my friend continued to trying to figure out whether the questioner wanted to know about the software, CRM in general, or if she had some other specific questions. She was not sure. All she knew is that she wanted to know about salesforce.
This sort of miscommunication is not uncommon. In the accounting field, clients often want help with their “QuickBooks.” The difficult thing for people trying to help clients with questions about QuickBooks is that the questions do not address the real problem or problems. Is the problem that the books are not set up in a way that reflects the business? Are they too complex? Is there a specific question about how to bill clients or how to pay vendors? Is payroll a problem? Is there an issue with inventory? Without knowing what the client means when he or she says, “Can you help me with QuickBooks?” it is simply not possible to help. If it is a question about how to prepare an invoice or record a payment, then the answer may be short and simple.  If the client has a lot of questions, the most satisfactory response might be to suggest a couple of hours of training or a formal class.

At one time in my life, I worked in financial services. The common client question in that industry was something along the lines of, “Can you help me with my investments?” There is no single answer to the question because it is not specific. I had no idea if the client wanted help setting up a savings program, understanding investments, planning for retirement, or figuring out a way to pay for a child’s college in 15 years. There were plenty of times that the client wanted help with everything I just mentioned and more.

The common element in each of these examples is that the questioner does not know what to ask, and it reduces the likelihood that he or she will find an answer. The solution to this problem depends on whether you are asking or answering.

If you are the person asking the question, take the time to think through what you want to know. If your question is very broad, break it into pieces. In the last example, from financial services, you are much more likely to find useful answers to your questions if you are specific. If you see a financial planner or investment advisor, taking the time to narrow your focus will help the person addressing your concerns tailor a response to your needs. If you really do need help with “everything,” or you do not know enough to be specific, then you can frame your question that way.  If you have a lot of questions, make a list.

When you ask a question and the person you ask responds with more questions, do not assume that he or she is trying to avoid your question. It is more likely that he or she is trying to understand your question, or if the question contains many parts, is trying to understand your priorities and objectives.

If you are responding to a question, and the question is unclear, then your first goal should be to help the client clarify what he or she wants to know. If the client really does want an overview, then you should be able to establish that fairly quickly. If he or she has more specific concerns, then you may need to ask questions that will enable you to discern those concerns.  

Excellent Customer Service

I’ve been an examiner for a fairly well known quality award, the Texas Award for Performance Excellence by the Quality Texas Foundation.  It is a Texas version of the Malcolm Baldrige National Quality Award. I also worked for a dozen years in the planning and research group for a major professional association. I’ve had a lot of experience trying to understand quality and what it means to deliver excellent customer service. I have decided that the thing that makes the “best in class” better than everybody else is the willingness to go beyond the expected.

I received an interesting letter in the mail today. It was from Ellis and Salazar, the body shop that repaired my car last year after I ran into a deer while driving home from work. I was not sure what to expect when I saw the letter in the mailbox. The letter turned out to be a reminder that the warranty period was about to expire. They were writing to ask me to go over my car thoroughly and to make sure that I was still satisfied with the work that they had done, and they were asking me to bring the car in if there were any unresolved issues. That was a surprise.

If you have ever been in a car accident of any type, then you know that getting a car repaired is not a pleasant experience. It starts bad, and it gets worse. You probably have heard the stories. Finding something to drive while your car is in the shop is a hassle. The shop is not able to do the work for what the insurance company will pay. It takes longer than promised. The paint does not match. The new windows leak. The list goes on and on.

I picked Ellis and Salazar because they were on my insurer’s list and because they had done satisfactory work for people I know. As I write this, there are 16 reviews on http://www.yelp.com/ and they have a good rating. That is probably a difficult accomplishment because most customers at a repair shop of any kind are already not happy with their situations. Taking a car to a body shop is not nearly as much fun as going to an ice cream shop. It is a challenge to provide customer value in this type of situation. It does not take much to push an already unhappy person into the category of very unhappy customer.

So what’s with the letter? I vaguely remember something about a warranty. I think it is probably going beyond what body shop customers expect to write a letter encouraging them to go over their cars and look for problems. Most people probably want to forget their accident and everything that went along with it. That includes the warranty. If something comes loose or the paint peels, most people figure that is just part of the game. This sort of follow up is not common. When I shop for goods or services, I expect things to work and for services to be performed as promised. I consider these things to be the minimum that a business should do.

Unfortunately, most businesses seem to be happy with the minimum. Maybe their customers don’t care. I do care, and I do business with firms that don’t do the minimum. Ellis and Salazar finished the job when they said they would, and my Prius looked like new. I expected that. Now a year later, they have taken the time to check on me. I did not expect that. I hope I never need body work done on a car again, but if I do, then I will take my car to Ellis and Salazar.

So what is the point? Am I simply writing an endorsement for a body shop? No. I’m trying to illustrate that excellent customer service is as simple as doing the expected and then just a little more. It does not even have to cost much. The reminder letter I received cost less than a dollar to mail, and it is probably done automatically. Even so, it made me feel important as a customer. That is willingness to go the extra step, and that is excellent customer service.

Are your customers coming or going?

Business owners need to know something about the people that are their customers or could be their customers. Over the last few decades there has been a decided shift from the north and north east to the south, and in recent years people have been leaving California for other areas. This chart by the Pew Research Center describes illustrates migration flows since 1975. The recent housing bubble and collapse has exacerbated these movements, and as this article in Reuters explains, the Midwestern manufacturing states may recover from the housing crisis more slowly than the Southern states.

Graphic representation really puts these movements into perspective. Check out this interactive map from Forbes showing movement from one county to another in 2008. The outflows from Chicago, Detroit, and Los Angeles startling. The inflows to Atlanta, Dallas, Manhattan, and Seattle are equally startling. It is not hard to figure out which would be the best places to grow a business. You can find the migration for your own county in 2008, by clicking on your county.

Angie’s List and Yelp: How to make consumer sites work for you

Just when you thought that you had the Internet all figured out along comes something else for you to worry about. If you have a website, you have probably already heard about search engine optimization, also known as SEO. You may have already explored using widgets such as Add This. You’re blogging, tweeting,  and Facebooking.  You are Linked In.  What else is there to do?

How about getting back to basics? Build your reputation. You can do this by understanding and using consumer review sites. Two popular Internet services are  Angie’s List and Yelp.

Both sites provide customer reviews of merchants and service providers. Angie’s list has a small membership fee, Yelp is a free service. They are not the only review sites, but they are two of the most well known. Yelp began in San Francisco in 2004, and according to their site, subscribers have written over 10 million local reviews, and over 31 million people visited Yelp in a 30 day period. Yelp can be accessed from just about any device with Internet access, and it was listed in a Time magazine article, 10 Essential Websites.

Angie’s list has been providing reviews since it was started in Columbus, Ohio in 1995 by Angie Hicks. Angie’s List groups customer reviews by service and location. The small membership fee provides access to local reviews on AngiesList.com, live support, Angie’s List magazine, access to a complaint resolution team, and product discounts.

Why this is important to you and your business 
More and more people are using consumer review services such as Angie’s List and Yelp, and the recommendations are powerful. More than a million belong to Angie’s list, and Yelp gets more than 31 million visits a month. That is a lot of people. Word of mouth reviews have clearly moved beyond friends talking to friends. Whether you do a great job or a lousy job, people are likely to talk about you on consumer review sites.

Carpe Diem! 
If you understand the power of consumer reviews, you can make them work for you. Here’s how.

• Don’t bother trying to game the system
• Understand your customers and your business
• Deliver the goods
• Ask for referrals

Gaming the system
This is a loser’s game. The reputable consumer review sites work hard to present unbiased reviews. You can try to join the sites and review your own business, but you will probably get caught. Besides, if need to write your own review to get a good one, then you have bigger problems than a customer review site. It is a good idea to look yourself up on the sites so that you can see what your customers think of you.

Understanding your customers and your business
The key to good reviews is happy customers, and the key to happy customers is knowing what they want and giving it to them. A couple of buzzwords that you should know are “customer value” and “branding.” A customer value is simply the reason that customers buy a product. What value do customers see in your product? What are you offering? What is your "value proposition?" Branding is how you present yourself based on what you offer. Unless the goods or services you sell are inferior to others at similar price points, then the most likely cause of customer dissatisfaction is that what you say your offer, your brand, does not agree with what your customers want. Consider this extreme example.

A farmer went out to buy a vehicle and asks the salesman for the best he has. The farmer has a lot of money, so price is not a consideration. A few weeks later the farmer returned to the salesman complaining that he had been sold a piece of junk. When the salesman asked what was wrong with the Ferrari,  the farmer replied that it got bogged down in the field and there was no place to hook up the seed spreader.

If your customers want tractors, do not try to sell them fine Italian sports cars! A popular theme in sales is “consultative selling.” The idea is that salespeople should work with customers to identify their wants and needs and then demonstrate how the products meet those. This is different from the usual approach salespeople use when calling on customers to pitch their wares. Check out this blog post by Jill Konrath, Sales Classics: Why You Must Go Into Sales Calls Totally, Stark-Raving Naked for another take on the topic.

Deliver the goods
Assuming that you understand what your customer wants and that you have it, close the sale. Then deliver the goods. Your sale was a promise. Keep it. This means doing:

• What you say you will do
• When you said you would do it
• At the price you agreed

If you read through reviews on Angie’s List, two things will become obvious fairly quickly. A lot of companies do not do what they said they would do when they said they would do it for the agreed price, and customers are actually surprised when companies do keep their promises. If you want the best reviews, you will have to do more, sooner, and for less than expected. However simply doing what they promised to do appears to yield good reviews also.

Ask for referrals
This advice has been around for a long time, and it works. Ask your customers to tell other people about you. Ask them if they belong to consumer review sites such as Angiel's List and Yelp. If they do, ask them to write about you. If you have done well by them, then they will do well by you.

So, how can you make consumer sites work for you? Find out what your customers want. Keep your promises, and ask your customers to tell their friends about you.

Is free Wi-Fi a good thing?

Have you noticed all of the signs advertising free Wi-Fi lately? Bookstores, fast-food chains, coffee houses, restaurants, and oil change shops are among the places offering free access to the Internet. I suppose this is evidence that the world is becoming more connected, and there is little doubt that people who feel a need to be connected 24/7 are comforted by ubiquitous wireless access, but is it a good thing? Is it good for your business?

Before answering those two questions, ask yourself two other important questions.

• Does adding Wi-Fi increase your value to your customers?
• Does adding Wi-Fi contribute to your bottom line?

Adding value

Whether Wi-Fi adds value is not a simple a question. Consider the many coffee shops and restaurants that have added Wi-Fi hotspots. The access is not secure, and it is often slow. Even so, customers that use their computers see value in having Internet access. However, what about the other customers? Does a room full of people typing away on computers or using mobile devices provide the atmosphere that they seek? Do they resent not being able to find a place to sit and enjoy their visit because the tables are full of people who have long since finished their coffee but are still working on their computers? This is probably not a problem at fast-food establishments because customers value speed and because other cues such as decorating schemes and uncomfortable furniture encourages them not to dawdle.

What about other types of businesses? Do you run a business that requires people to wait? Unlike restaurant patrons, customers waiting for an oil change may not expect comfortable ambiance. (The coffee in most car repair waiting rooms is hardly drinkable.) Adding Wi-Fi might help customers turn down time into productive time.

The key is to understand your customers and your market.

The bottom line
It does not cost much to set up a Wi-Fi hotspot. Monthly Internet access charges, even for high volume business use, could be under $100. Wireless routers are also not expensive. If providing a hotspot increases sales, then it is probably a good idea. In the last example above, a car repair shop, it might be reasonable to assume that customers would come to the shop instead of a competitor's because of the hotspot. It is easy to see how the adding a hotspot increases customers' perceived value and how that could lead to increased profits.

Restaurants or coffee shops are different though. Most of these businesses depend on a constant flow of customers purchasing at least a minimum amount of something. Adding a hotspot encourages customers to linger. This means that tables do not turn over as quickly. If keeping tables occupied increased sales, that would be fine, but that is usually not the case. In addition, customers that are turned away or have to wait a long time are not likely to be satisfied customers. In this case, adding Wi-Fi might reduce sales.

The bigger picture
The topic of this post was Wi-Fi, but it could just as easily have been about any number of business decisions. Here is an example using the auto industry.

Should a luxury car company introduce a smaller economy car? Cadillac introduced the Cimarron, which Time Magazine named one of The 50 Worst Cars of All Time. BMW introduced the Mini Cooper to much acclaim. What was the difference? BMW understood its market and introduced a sporty car with an interesting history. It leveraged the brand and extended the product line. BMW added value and incrased the bottom line. Cadillac stuck a label on a moderately popular Chevy and decided that charging a high price would make it a luxury car. This damaged the Cadillac brand, decreased customer value, and hurt the bottom line.

What this all really means
Finding new ways to meet customer needs is always a good idea. Creativity and innovation are good things, and businesses that are always looking for ways to meet customer needs are probably going to be successful. Before they can do that though, they must understand their business and their customer. They've also got to ask themselves two questions.

• Does this increase your value to customers?
• Does this contribute to the bottom line?

Why your customers buy – Understanding the value proposition

One of the key things for businesses to understand is why their customers buy their product. Statements such as the following ones are meaningless.

• We are the best at what we do.
• We give great service.
• We have a great product selection.
• We offer a great value.

The first two are meaningless because they are vague. Your business may be the best, and it may be great, but what is it that you do? What are your customers purchasing? Another important problem is that they are focused on the business. The next two are slightly better because they begin to describe the products. Where they miss the mark is that they are not specific, and they are not focused on the customer. If this sounds familiar, it is because companies use the same concepts to develop their brand strategies.

A value proposition is a statement explaining why a customer should buy a product. Good value propositions articulate both the costs and the benefits of purchasing a product. For example, assume that you sell cars. What are you actually selling? Are your customers purchasing reliable transportation? Are they seeking a status symbol or making a statement? Do they want comfort and luxury? Are they looking for high performance? Mercedes and BMW are both German luxury that command a premium price. However, the Mercedes emphasizes luxury and the BMS emphasizes performance. Mercedes and BMW have different value propositions. At the other end of the price spectrum, Ford and General Motors both offer more affordable products, albeit without the performance features and without the luxury. This too is a different value proposition and a different set of customers. Companies that ignore their value propositions do so at their peril. Cadillac seriously damaged its brand when it introduced a small relatively inexpensive car hoping to attract economy minded buyers because buyers no longer automatically assumed that Cadillac meant large comfortable car and status.

Restaurants provide good examples of different value propositions too. Consider the difference in fine dining establishments, family restaurants, and fast food restaurants. Consider the values that customers might seek:

• Fast, low cost
• Family friendly, budget oriented
• Leisurely, elegant, cozy, gourmet, price is not a big factor

Is it pretty obvious which set of values belongs to which market segment? Would McDonalds be successful if it dimmed the lights and sold $25 steaks? Would Ruth's Chris be successful if it introduced value meals?

Remember when crafting a value proposition, customer value is not just about low price or the product. Customers are buying what the product provides. For example, people shopping for jewelry can make their purchases in many places from discount stores to department stores to jewelry stores. If it was all about price, then Tiffany & Co. would not be in business. Instead, the Tiffany Blue Box is a status symbol. Tiffany & Co.'s value proposition says exactly what they do.

Since 1837, Tiffany & Co. has been the world's premier jeweler and America's house of design.

That is not to say that prices do not matter. Wal-Mart's value proposition is:

Everyday low prices

Price does matter. The trick is to figure out how it matters. If your product is a commodity, then value means low prices. If your product is status, then high prices may indicate value. This introduces another part of the value proposition. What exactly is the customer buying? Obviously if the customer is purchasing a computer, that is what the customer is buying. But what does that mean? Is the customer buying the box or the components? The customer is purchasing the ability to store and manipulate data. The customer is buying reliability. If you are selling televisions, the customer is not really interested in the device. The customer wants to watch TV. The customer is buying the ability to do that with vivid color and great sound. The customer is buying a viewing experience. If you are selling cars you are either selling transportation or you are selling a driving experience. That is why BMW advertises its value proposition as:

The ultimate driving machine

Even this blog has a value proposition. It is to help you grow your business by giving you useful information and sharing ideas. So now that you understand the idea, go write your own value proposition. Remember to answer these two important questions.

1. What exactly is the customer purchasing? Remember, their goal is not just to own the product; their goal is to get what the product provides. That could be a lot of things.
2. Why is the customer buying it?