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Posts Tagged ‘good policies’

However, “we have streamline seats!”

Monday, June 3rd, 2013

Recently I spoke to a friend who works with United Airlines about his employer being at the bottom of the list with recent customer satisfaction surveys. “How is it that you guys have the uncanny ability to find yourself at the bottom I asked?”

He began explaining that the merger between United and Continental has been less then harmonious. “They have wiped out large swaths of the United flight crews he began. So most of our team has been on extended furloughs. When we do work, it is fewer hours then before the merger. Our old United hub, which use to service all of the flights to Hawaii have now been cut to one. Flight crews from Continental are carrying out the other flights. So perhaps one of the reasons why they are at the bottom of the list he continued, has more to do with how they treat us. We get a call that we are to be up by 5:00 am so that we can take off for a 7 o’clock round-trip which takes eleven to twelve hours and then by the time we get back are told that we need to plan on getting up again (same time) for a long international flight. So here we are, trying to keep passengers happy while we are IV-ing on coffee to ensure that we don’t end up sleep walking through the trip.”

So much for the happy merger.

“Oh, and it gets worse, he continued, here is a customer service doosie for you, we have been given strict orders from corporate not to let passengers know that if their 4.99 Wi-Fi fails, then they can get a refund. They need to go to the United website to find out about this!”
After listening to him, I then brought up the other news about how the airlines are still squeezing even more seats into coach. In addition, making the toilets smaller.

“Oh, yea, he agreed. But you see, it is all about how it is presented. We call them Streamline Seats!” Sounds sort of nice don’t you think? He asked sarcastically. Of course, there is the standard corporate propaganda that we hear so much of these days about how it is all in the name of saving the earth – you know green? – smaller seats are good because they have less weight and in turn require less fuel.”

He rambled on, sharing his more frustrations where it was easy to conclude that perhaps one of the reasons that they are at the bottom of the heap is a reflection of how they are also treating their staff. This conclusion is an easy to make, and we see it every day where companies that become too big to balance their budgets with the needs of their customers and employees have an uncanny way of hurting their long-term performance.

And regarding the rationale for why seats are smaller, as with other businesses making boxes smaller, or suggesting that your towels at the hotel you are staying at needn’t be refreshed daily – really has less to do with going green (saving the environment) but saving green (money to their bottom line)

GOING UNDERC0VER andThe Value of Critical and Honest Employee Input

Thursday, February 7th, 2013

Without employees who are productive and happy, growing a company will be difficult. This is why I always encourage candid and open dialogue between management and employees. On the same token, it is generally more beneficial to keep a pulse on company morale and direction through an independent third party. This is because it is often difficult to get honest and direct answers from employees on what they really think.

An outside independent party will – take a careful look at your offices, stores or locations to assess how things are running from a professional outside perspective. Then, by earning the trust of key personnel, will be able to successfully troubleshoot areas weakness.
Here are a few Case Examples:

A Deli in Walnut Creek, CA.
Total employees – 73

A onetime popular destination for hungry patrons twenty-six miles east of San Francisco, the small chain of delis was quickly losing market share. “I’m not really sure what the problem is exclaimed the Senior Partner, we used to have line out the door, but now business has dropped off. Can you help us develop a marketing strategy so we can win back our customers?”

“Well sure, I replied, but before we do that, I think it behooves such an investment to focus on what people are currently experiencing first, and identify any problems or deficiencies that give customers a less then delightful experience.”

As with many other similar situations we began with an in-depth customer survey followed by me going under cover. The difference between a Mystery Shopper approach and going under cover is that I play the role of the Mystery Shopper from a specific professional perspective of knowing exactly what I was looking for. And yes, this is a big difference!

• How easy is it to find? How is the signage?
• Is parking adequate, or do I need to worry about door dings?
• What does the place look like? How does it smell? Is there music that compliments the inside ambiance and environment?

1. I walked into the first location to a low vibe environment. “No energy here, I concluded. Why would I want to patronize a place that was boring?”

2. At the next location, I noticed a unpleasant smell and then looking up toward the top right ceiling observed a thick group of cobwebs. “So what else was un kempt?”

3. The third location was equally boring, but at least had no cobwebs. Nor did it have an attentive staff. While I looked at the menu board, the employees busily stared at their phones, one texting while the other seemed fixated on Facebook. “Nothing worse than inattentive employees who don’t acknowledge the customers!”

Taking my notes with me, I set up a series of meetings with various employees in the organization until I was meeting with Hillary, the General Manager. My conversation began with my experience from going under cover.
Thirty minutes after earning the trust of Hillary, the middle aged woman suddenly stopped me by asking, “do you really want to know my opinion, and I mean – my honest opinion?“ “Of course I replied.” She then excused herself and returned with a large folder. “I have been keeping notes on everything that has either happened or has gone wrong with this company for the last six years, but the business owners have not listened, this is why things have gotten so bad around here and why we have not been making any money. Even worse, she continued, this is why it is so difficult to get my people to give a damn! Why bother? Management does not listen or seem to care anyway, so why should the employees?”

We reviewed the file and were able to use it as a toolbox for harvesting valuable information and feedback from other personnel. Much of this confirmed serious management deficiencies. As a result, the argument for recommending changes in policy and protocols was a simple one.

Benefits and Results: The client agreed to consider the changes, which originated in Hillary’s files, thus returning their chain of Delis to profitability. (Sometimes the people in the trenches have a better feel for what needs to be done to be successful then those who actually own the company) I suggested that we give the process several months and see if this will be enough to begin the process for winning back customers. The ad campaign was then designed with a theme of “finding out what has changed!”

Because fundamental issues were resolved between management and employees, major expenditures for adverting were averted. The other realization however, was that the company owners were ready to sell – and retire. Eight months later, this too was carried out after referring them to a competent business broker.

A Tree Service in Austin Texas
Total employees – 35
A small company built and managed by the owner and his GM (brother) had an issue with discernment. The problem was that they were good at what they did, but not necessarily good at reading people. After all, some of the key people that were with the company were friends and relatives. Therefore, it was not always easy for the owner and GM to accept that some staff members were skimping on their responsibilities or worse, had addiction issues that kept them from either coming to work, or performing well when they did.

After interviewing key staff and personnel in the field, it was determined, that three counterproductive office employees and two outside project managers needed to be dismissed.

Benefits and Results – led to the removal of several unproductive employees thus saving the business $15,388.00 per month. More importantly, the office morale increased with an immediate lift of positive attitude and energy. The company environment was saved along with money no longer spent on unsavory or poor performing employees. As an incentive, a portion of the money saved was redistributed into higher salaries for key productive employees as a reward for doing a great job.

A Renovation Contractor in Oakland CA.
Total employees – 86
A fast growing company, with over eighty employees was experiencing an unusually high turnover rate. Fifteen employees were interviewed and an assessment report provided several pages of valid grievances. In addition, we discovered that the employer was in violation of labor laws, thus vulnerable to fines and/or lawsuits by disgruntled personnel.

It was recommended that Company President allow us to conduct an open and candid meeting between himself and his employees and to listen to all the grievances with an open mind. We followed up several weeks later to make sure that company changes – as agreed upon were actually being implemented. We also sought additional improvements and long-terms systems designed to maintain mutual trust between him and his team.

Benefits and Results: Employer immediately implemented changes as required by State Labor Laws. He then authorized policy changes in response to employee grievances, currently affordable along with the promise to add additional employee request, within the coming months.

This engagement dramatically eliminated distrust between management and personnel resulting in a significant drop off in employee turnover (and cost associated with turnover).

In addition, reduced “shop stealing” of tools and equipment by disgruntled employees. In the spirit of cooperation, created protocols and systems, this streamlined day-to-day operations. Implementation of these changes resulted in low turnover, improved customer retention and a solid ten-year averaged growth of 38%.

A Restaurant in Prague, Czech Republic, Europe
Number of employees – 73

In the 1990s as Eastern Europe was celebrating its newfound independence they were also wrestling with how to evolve their business models to adapt to Western business standards. In 1995, I began advising a number of companies in this region on improving their business models so that increased profitability could be reached through a combination of good systems, enhanced management to employee communication and dramatically improved customer service.

One of my favorite clients was a restaurant on Wenceslas Square, in the center of tourist foot traffic and business lunches. They had contacted us because they realized that they were not experiencing the repeat business from business parties and worse – had, on a weekly bases, tourist simply walk out due to lousy service. I met with the business partners and suggested that over the next week I go under cover as a patron. They agreed and for the next several weeks tuned from Business Adviser to Mystery Shopper. True to what I had been told, service was slow and inefficient. By comparison with other restaurants and eateries, the food quality was inconsistent and mediocre – where from time to time, it was great, but generally served lukewarm. As time progressed and I established a rapport with the wait-staff and began conversing with them to find out what from their perspective – “was going wrong?”

“Oh, we just work here, Honza politely replied, but I guess we are not motivated because we are paid little and the tips are lousy.” I looked at the menu and realized that for average lunch items (around $20 US, and dinners starting at $35, then tips should be a lot better than their average return of 2 – 4%. Especially with consideration to the tourist trade.

It was recommended that we conduct an in-depth employee survey with encouragement for honest candid input and assessment. This included their perception of management and customer inter-action and experience. An immediate fundamental change regarded tipping. Whereas the previous system was based on a joined tip jar, now each wait-staff member was tipped on his/her individual performance. From a western business perspective, this was a no- brainer. But in the 1990s, many businesses were still running from a Communist cultural mindset.

Benefits and Results: Employee turnover decreased by 82%, tips increased by 61%, return customers increased by 64% and profits increased by 58%.

Here are some basic things to keep in mind for increased employee performance:
1. Encourage employee empowerment and responsibility
2. Develop processes designed to give your employees the ownership to take care of each customer as if they were their own personal guest.
3. Always look for ways to create respect, cooperation and harmony between staff and management
4. Weed out the poor performers and the culprits who bring toxic energy into the office environment.

The Tale of two Theaters

Friday, March 23rd, 2012

The other night I took my 15 year old and his friend to the movies. After spending thirty dollars on movie tickets, we found our seats only to enjoy twenty-five or so TV commercials. It was half way through this grueling experience of watching annoying TV ads that I decided to get up and get some sodas and pop corn. There it was, that wonderful menu board, proudly displayed on the wall with overpriced items. My order was taken by the high school student, who cheerfully read it back – “one pop corn and three drinks that will be $23.00!”

As I recovered from the shock of forking over $23.00 for (let me repeat, one pop corn, and three drinks) George’s friend grabbed the pop corn and proceeded toward the saltshaker. “What are you doing?” I asked. “George and I like extra salt, Tyler replied.” Well hold on for a moment please”, I asked now turning to request a box for me to pour my part of the prior to extra salt 7.50 pop corn. The Concessionaire brought out a tiny box just large enough for a hot dog. “We can offer you this. He offered.” “They use to have larger boxes, I replied, this will hardly fit much” “Yes, he continued, we can certainly give you a larger box but we need to charge you for it.” What do you mean, how much I asked?  “Well he began; they make us charge whatever the price would be for popcorn the size of the container.” “Ok then I said; just give me the dam hot dog box!”


This is the tale of two kinds of Theaters. One the recent traditional represented by Cine Mark and the Regal Theater Group, and the other represented by The Alamo Draft House.

Let me begin by defining recent traditional by comparison of traditional. Traditional as people 35 and older recall a theater experience, which included movie previews and cartoons. In addition, it was always understood that theater food would not be cheap or street price competitive. On the most part, people understood this and accepted that paying significantly more than conventional prices for candy popcorn and sodas was part of the theaters way of actually making money.

Then in the 90s, something began to fundamentally change. Prices for food, which originally accepted as high, became grossly excessive. Even bottled water (16 ounces) began selling for $4.00!

Then to add insult on top of injury, these chains saw the opportunity to hold their audience captive to anywhere between 15 to 30 TV ads! In an attempt to win audience acceptance of this cruel racket, they inserted a couple of TV promotionals and behind the scene snippets. After enduring the onslaught of relentless commercials at the viewers expense, we now hear the cheerful voice-over chime in over closing the music as she explains just how privileged the audience has been to have endured this. “You’ve been watching First Look, she explains, you went behind the scene to witness the making of…., you were treated to the new comedy show on….

Come here early (I don’t think so) to enjoy early inside previous and blab la bla on First Look!”

This approach continued to evolve to where things currently are. In summary, higher movie tickets, rip off food pricing and excessive TV ads forced down the throats of the customers.

Enter the Alamo Draft Houses, which began in Austin TX and are now experiencing expansion of their brilliant, yet very simple concept. And what is the concept?

Give the customer a fun and delightful experience so they don’t resent paying for it.”

The Alamo does not force their audience to suffer through annoying TV ads that common sense should tell the traditional movie chains CEOs that we came to the movies to avoid. Instead, they serve up a combination of old (and I mean 1950 and 60s old) TV snippets, 50s and 60s era ads, not to mention the old corny news reels that the baby boomers watched in their 4th through high school classes. And of course, a healthy serving of cartoons! Fun.

And rather than ripping off their customers with $5 – $6.00 sodas, they offer a number of great beers for around the same price. Junk food? Yes. However, good quality food for a reasonable price is also readily available. Even better, they actually throw out those annoying talkers and cell phone users who lack the courtesy to turn them off.

This is not intended to be an ad or promotion for The Alamo Draft House; however, as a happy customer I am happy to share my experience. So while traditional theaters go the way of the dinosaur (raising prices, cheap-skating their customers (remember the tiny pop-corn box!) and forcing more unwanted TV advertising down our throats – I will always check the movie listings at the Alamo theaters – first.

In summary, every business needs to examine their business model periodically, and if someone is taking away their market share, well, it may just be for a good reason!

Customers: When they don’t return due to silly policies

Thursday, October 28th, 2010

Recently I dined at a popular eatery in Northwest Austin. The well dressed man in front of me had just ordered his meal and then after paying for it, held out his stamp card (frequent stamps provide for a free meal) and began: “Last time I was here, I forgot my card; would you be able to stamp it for last time as well?”

The order taker declined exclaiming that it was not the policy to accommodate customers who failed to remember their stamp previously and that there were no exceptions to the rule.

Forty-five minutes later, as I was leaving the premises, I overheard two professionals chatting about their dining experience.  One of them was the man who had been declined the stamp for his previous meal “I am never returning to this place again, he fumed – I don’t care how good the food is!”His friend tried to reason with him. He even emphasized that it had been part of their Friday tradition for over 1.5 years to visit the eatery but to no avail.

How sad, I thought to myself, that one silly shortsighted policy could cost so much money. Out of curiosity, I calculated the following:

10 meals required to receive a complementary meal = $10.00 average = $100.00 – less $10.00 (one meal) = $90.00.So, if he had been dining at least once a week (as it appeared in the conversation) then:

52 weeks = $520.00 x 1.5 years = $780.00.

Here are the facts:

The man did not look like he was not a scammer but an honest professional. He had happily patronized the Café for over a year. It was a tradition. He had a simple request, which was denied and then left and stating, “he, would not be back”.

Many places will consider request such as the one the regular customer had on a case-by-case basis. It takes a small amount of discernment to sort the free loaders from the sincere. However, establishments that fail to do so with blanket policy decisions tend to end up spending far more money on bringing in new customers rather keeping existing ones.

So here is my question, “was declining his request for a simple stamp worth it?”

Last weekend I took my boy to a new donut place up on Parmer near Cedar Park. Looking forward to a new experience, we ordered nearly 9.00 worth of donuts milk and coffee. As always, I also requested regular sized water with extra ice. The owner held up a tiny cup and stated that he could offer me “this size only “as a courtesy. “Otherwise he continued, I have to charge you for a regular drink.”

Sitting down I asked George how many people he thinks actually make the same water request that I do. “Not many he replied. Most people don’t drink as much water as you” I then challenged him to a lesson in Business 101. What was our intention of coming in here today I asked? To try a new place”, he replied. In addition, “how many times a month do you think we would return if we had a pleasant experience? Probably, well, at least twice a month. “So, if we spent $9.00 per visit X 2 X 12 months, how much is that?” $216.00. Moreover, how much would the regular size cup probably really cost him? .25 x 2 = .50 x 12 = $6.00 per year. So, how much was it costing him a year by losing me as a customer? $216.00 – $6.00 = $210.00.

“Was declining a request for regular size water worth it?”

Everyone understands the basic premise that it is less expensive to keep a customer then to lose one. Great companies learned this that hard way when they failed to pay attention to customer nurturing. Instead, billions of dollars continue to be spent annually to lure new customers – where if businesses both large and small spent less keeping their existing ones happy, then they would have more resources to build out and expand and yes, increase the chances for higher profits!

“So, are short-sighted policies that deny simple courtesies to customers always a smart idea?”

Well, you do the math.