Is the American Dream Dead or Just on Life Support?

The American Dream is different for every person. To some it’s the opportunity to own their own home; to others it’s to work hard, save and live their golden years in comfort; to others it’s the opportunity to start a business and use it to build security and wealth for themselves and their families. So how is the American Dream working for you. For many today the American Dream is still very much alive to others its dead or at least on life support. Just consider the following:

Home ownership-One of the cornerstones of the American Dream

  • 11 million homeowners are upside down on their mortgage and have little hope on the horizon that their situation will change.
  • The value of the average American home has decreased 23.7% since the peak of May 2007 according to Zillow.
  • Foreclosures activity will increase this year as RealtyTrac expects 1 million homes to be repossessed by banks versus 804,000 in 2011.

Jobs Creation/Unemployment

  • Although 1 million jobs have been created in the last six months we’ve only replaced 43% of the 8.3 jobs that were lost in the Great Recession
  • Civilian labor participation is 63.6% which is the lowest since 1981. This means that in addition to high unemployment many people who can work are choosing not to for many reasons including: Baby Boomers retiring rather than continuing to work at unsatisfying jobs, second earners who find little incentive to rejoining the work force, student who stay in college because of limited employment opportunities and people on public assistance programs (food stamps, Medicare etc) who can’t afford to give up the benefits they receive if they become employed.
  • Although the Bureau of Labor Statistics’ unemployment rate is moving down towards 8% much of the improvement is created by workers who are still unemployed but aren’t counted anymore. Up to 500,000 workers have run out of benefits and have given up on looking for work so they are no longer considered “unemployed” by the Bureau of Labor statistics. If we added all people who are actually unemployed with people who are working part-time but who want full time work the number would be 16-20%. Adding people who have accepted jobs that pay less than the ones they lost about 1 in 4 Americans have been impacted by the New Economy.

Debt Crisis

  • The United States now owes more than it produces. Our national debt is $15.5 trillion and our GDP is $15 trillion. Unfortunately there is no plan in place to address this issue and probably won’t be addressed until after the November elections. Given how the two parties have behaved in the past there is little evidence to support that a viable long term solution will be worked out any time soon.
  • Taxes are needed to run government programs and reduce the debt. However only 50% of Americans pay taxes. This means that the half who does pay taxes must carry the full burden.
  • Export sales are slumping. After a two good years of selling American products to a global market exports are softening due to economic problems in Europe and a deceleration in economic growth in India and China. With this decline in global demand our ability to grow our export business is limited.

The American Spirit-We as Americans have always faced adversity with optimism and a belief in our collective ability to surmount any challenge. This is part of our DNA. Two Gallop statistics suggest that our spirit is still strong but may be wavering a little.

  • 53% describe themselves a s thriving (This is the silver lining and reason for optimism)but 44% say they are struggling (This means close to half of Americans have been impacted by the New Economy)
  • Last year 65% of those polled by Gallop said they made enough to live comfortably but that figure dropped to 60% this year. That’s a trend that is going in the wrong direction.

So what’s the solution for resurrecting the American Dream?

I’ll give you a clue. It won’t come from Washington, it won’t have government strings attached to it and it won’t happen without innovation, courage and hard work.

The simple and unavoidable truth is that job creation is the fuel for the nation’s economic growth. When more people have jobs, more consumers have money to spend — and consumer spending drives about 70% of the economy. Economic growth is the driver of the American Dream.

This means that the road to recovery and restoration of the American Dream must be paved with an entrepreneurial spirit and the growth of small businesses! Why small businesses and not corporate giants?

  • Large corporations tend to be slow to adapt in a changing marketplace (Sears, Black Berry, Kodak, and Boarders Etc).
  • Large corporations are often driven by quarterly results and investors looking for short term profits.
  • Many corporate CEOs are charged with maintaining the status quo rather than igniting the passion that originally drove the business to success.
  • Many of our current economic problems can be traced to corporate leaders who were corrupted by power and greed (AIG, MF Global etc)

Although current data from Intuit and ADP shows small businesses are adding jobs at a faster rate than larger companies, many experts still project the end of 2013 before small business employment reaches where it was in 2007. This of course is dependent on the global economy remaining relatively stable during that period of time.

What has to happen to accelerate small business growth?

According to a recent survey by the National Federation of Independent Business (here):

“The two principal impediments to current small-business growth are business uncertainty and weak sales… The single most important indicator that would renew small-business owner confidence in business conditions is increased sales in their businesses.”

So how do small businesses increase sales and gain confidence?

Based on the research I’ve done for my book “Leadership in the New Economy”, there are two ways business leaders look at these challenges.

  • The first and easiest way is to say it’s a demand issue. These businesses feel that business will improve when the economy picks up. Unfortunately, those who are waiting for demand to “knock on their door “are struggling (and will continue to do so IMHO).
  • The second way is to look at these challenges as marketing and business operations issues. I’ve found that businesses who are thriving now are effectively market themselves and adding greater value for their customers.

If you own a small business don’t wait for the economy to carry you. Have the courage and conviction in your own business to market yourself more effectively and find ways to create more value for your customers. Create a customer experience that not only creates customer satisfaction but inspires loyalty as well. Improve your business operations by engaging your employees in ways that taps into their knowledge and passion for your business.

Leadership matters more now than any time in our nation’s history. I’m not just talking about the leaders we elect I’m talking about the leaders who will lead the small business revolution that will restore the American Dream for generations to come. To borrow form Shakespeare, the question is no longer “to be or not to be” the question for American small business owners is, “To become a leader or be forgotten.”

If you’re interested in learning how to increase sales and profits in your marketplace get FREE access to the Growth Positioning Survey by clicking here. You’ll get a strategic snapshot of your business that maps out what you need to do to grow your business.

Customer Experience Management in the New Economy

How would you rate your customer experience management? If you have a customer experience that satisfies but doesn’t WOW you’re in BIG trouble.

Customer experience is defined as the sum of all experiences a customer has with a you and your business over the duration of the business relationship. This means every touch impacts that experience positively or negatively. Your customer experience management reflects your ability to deliver an experience that sets you apart in the eyes of your customers serves to increase how much they spend with you and, optimally, inspire loyalty to your brand.

Creating  a superior customer experience requires you to first understand the customer’s point of view. Only by standing in the customer’s shoes can a company appreciate the full impact of the day-to-day customer experience that the company delivers.

In the New Economy products are becoming commoditized, price differentiation is no longer sustainable and customers are demanding more. To compete, companies are focusing on delivering superior customer experiences. A study of over 860 corporate executives revealed that companies that have increased their investment in customer experience management over the past three years report higher customer referral rates and customer satisfaction (Strativity Group, 2009).

Many experts feel that the customer experience has emerged as the single most important aspect in achieving success for companies across all industries.

As evidenced by the number of business casualties over the past few years most companies talk about becoming customer focused, but few actually do it. Doing customer satisfaction surveys is one thing, changing the company’s culture based on what was learned from the surveys in something totally different.

Some companies have learned that being customer focused can give them a competitive advantage. Customers choose Disney World and Zappos because of their experience with them.

Let’s clarify the difference between companies that aim for customer satisfaction and those that seek to WOW their customers:

  • Because most, if not all, of the “bad” companies are out of business customer satisfaction is the minimal requirement to keep your doors open. Customer-focused companies strive to delight their customers.
  •  Most companies ask their customers about their needs. Customer-focused companies understand their customers’ needs so well that they can anticipate them and even surface unrecognized needs.
  •  Most organizations strive to meet their customers’ expectations. Customer-focused companies deliver more than what the customer imagined.
  •  Most organizations try to keep complaints to a minimum. Customer-focused companies encourage feedback from their customers so that they can learn from it.

A great example of creating a customer-focused culture is Zappos. A review of their number-one core value below speaks volumes about how they operate.

Deliver WOW through service, is Zappos’ founding principle. It’s not something written down and forgotten. It’s part of who Zappos is and every employee is immersed in it starting on day one.

Zappos lives their founding principle and it has served them well. How does your customer experience management stack up? Ask yourself this question:
DOES YOUR CUSTOMER EXPERIENCE MAKE SURE THAT EVERY CUSTOMER TOUCH REINFORCES YOUR UNIQUE SELLING PROPOSITION AND ENDEARS CUSTOMERS TO YOUR ORGANIZATION WHILE TRANSFORMING PROSPECTS TO CUSTOMERS, CUSTOMERS INTO LOYAL CUSTOMERS AND LOYAL CUSTOMERS INTO RAVING FANS?

If you didn’t answer with a resounding “YES” then you need to take a hard look at every customer touch and improve your customer experience management or pay the price for not doing so.

To learn how well your business is positioned to succeed in the New Economy take the Growth Positioning Survey now.

Build Customer Satisfaction and Loyalty with Social Motives

customer satisfaction amd loyaltyCustomer satisfaction and loyalty are key ingredients for every business. If you want to create a legion of satisfied and loyal customers you’ll need to learn what I learned on one of my first sales jobs.

 As a college stu­dent, I spent one summer selling encyclope­dias door to door. After a week of training I was sent out into the field where my initial day in the field was a picture in con­trasts. My first pre­sen­tation resulted in a sale, but I was almost physically thrown out on the second. Somewhat perplexed, I sought advice from my father, who spent his career in sales and sales management.  “Dad,” I said, “I can’t figure it out. I made the same presentation to both customers and got entirely different results.” My father asked, “Was every­thing the same?” “Of course it was,” I an­swered. “I’ve been practicing my presentation for a week.” My father asked, “Was everything on both calls exactly the same?” I thought for a moment. “Ev­erything was the same,” I said, “except the custom­er.” My father smiled and then congratu­lat­ed me on discovering one of the most important keys to sales success: People are different. If you want to sell them, you must do it the way they want to buy, not how you like to sell. Mastering this skill will go a long way towards helping you build customer satisfaction and loyalty.

Most salespeople intuitively treat each custom­er differently; however, they usually relate better to some customers than others. When you experience a good relationship with a customer from the start, you are most likely selling in your comfort zone; that is, your natural style of selling “fits” the approach that the customer appreciates when buying. These customers are likely to be both satisfied and loyal because of how you sell them.

On the other hand, when it’s difficult to establish rapport or make progress with a cus­tom­er, you are probably selling outside of your comfort zone. The customer wants to buy in a way that is in conflict with your natural style.  In these situations, you have two choices: adapt your style or find another customer who likes the way you sell. Unfortunately, this approach will not help you build customer satisfaction and loyalty. Therefore , you probably only have one choice, because if you don’t adapt, you’ll have to find another customer anyway.

One way to improve your ability to adapt is to recognize and respond to your customer’s motiva­tional needs. Motivational needs are internal desires that cause people to respond in a particular way.  Although we can’t look inside of people and see their needs, we can observe their behavior.  People do things for a purpose. If we recognize their behavioral patterns and trends, we can anticipate what it takes to meet their needs. When people’s needs are met they reward you with customer satisfaction and loyalty.

 How people respond in certain situations gives clues to their motivational needs. The more frequent and consistent a behavior is the stronger the motivational need. For example, if you ask a customer what type of food she would like for lunch Chinese, Italian, or French and she always prefers Italian, you can reasonably be sure she has a strong desire (e.g., need) for Italian food. Fur­thermore, taking her to an Italian restaurant will do more to enhance customer satisfaction and loyalty than taking her to your favorite Chinese restau­rant.

A simple, practical, and reliable ap­proach for recognizing and understanding motivational needs is called Social Motives. The concept of Social Motives was developed by David McClelland[i], a professor of psychology at Harvard University. In his research, McCle­lland found that we learn these needs from our experi­ences growing up, from how others react to our behavior, and from the successes, rewards, frustra­tions, and anxieties of our current experi­ences. The Social Motives consist of three basic motives:

  • Achievement, or the need to excel
  • Affiliation, or the need to belong or relate to others
  • Power, or the need to influence and control others

 Each of these three motivational patterns exists to some varying degree in each of us, according to McClelland’s research. We are, however, primari­ly motivated by one pattern. When we interact with others, our primary pattern affects the way in which relationships develop, sometimes producing fulfillment, some­times significant stress. The inter­action between our pattern and that of others makes some situa­tions stimulating, others frustrat­ing or boring, thereby affecting our personal effectiveness, often in dramatic ways.

 When you understand the dynamics of each Social Motive, then analyze your own motiva­tion and that of your prospects and cus­tomers, you can improve your sales performance in significant ways. This understanding includes fully recognizing what Social Motives are not.

They are not a system of stereotyping or pi­geonholing people.

  • They are not a replacement for others selling skills and strategies.
  • They are not a method of manipulating people.

Social Motives should be used to help you under­stand people, not judge them. When used effective­ly, Social Motives allow you to adapt your selling style so that customers view what you say in the best light possible. This increases customer satisfaction and loyalty because your approach to selling will match how your customers like to buy.

 



 [i]. The Achieving Society: Van Nastrand, 1961

Stop Customer Churn by Managing Moments of Truth

Is customer churn draining the energy, profits and brand equity out of your company? If it is then you need to stop the customer customer churnchurn immediately. Committing your company’s resources to acquiring customers only to see them leave during the next buying cycle is a prescription for failure. Stopping churn requires you to examine you relationship with your customers throughout the customer experience.

In any relationship, whether it is a marriage, a frien­dship, or a sales relation­ship, there are phases when problems or conflicts are apt to arise. If such dilem­mas are not confronted and resolved early on, the pre­mature dissolution of a partnership may result. In the case of a customer part­nership, there are phases when the buyer’s expecta­tions of your prod­uct or service are tested. During these times you must prove to your customers that your product or ser­vice is their best alternative. Such confron­tations are called Mo­ments of Truth, and how you handle them will deter­mine the longevi­ty of the rela­tionship.

Moments of Truth are the real acid tests of long-term part­nerships. If your product or service per­f­orms as intend­ed and de­livers the benefits the cus­tomer is seek­ing, ev­ery­one is happy and the rela­tion­ship is se­cure. On the other hand, if the product or service fails to per­form or deliver the expected benefits, the custom­er is unhappy and the rela­tion­ship is in jeopar­dy. This is the starting point for customer churn.

A Moment of Truth can occur at any time, in a vari­ety of situa­tions. However, to best under­stand these mo­ments, it is helpful to focus on the six most common sales situations that constitute Moments of Truth. Because of their frequency and potential impact on the sales relationship you must master the skills demanded by each of these six Mo­ments of Truth:

  1. When you’re making the sale.
  2. When the product is delivered or the service begins.
  3. When you discover a problem.
  4. When the customer complains.
  5. When the competition puts on the pressure.
  6. When you make your regular customer retention contacts.

To ensure that you handle each Moment of Truth successfully you’ll need to develop a specific plan for each one. Having a well developed plan increases your chances of solidifying the customer relationship and in stopping the cause of customer churn.

How to Retain Customers on a Regular Basis

how to retain customers How to retain customers on a regular basis is an important step for increasing sales, profits and customer loyalty. Here are three reasons why.

  • Most (68%) customers stop doing business with a company because of indifference.
  • Existing customers are more profitable long-term than new customers.
  • It costs 5-6 times more to gain new customer than it does to keep an existing customer satisfied.

That’s why one of the cardinal sins of selling in the New Economy is taking your customers for granted. Failing to communicate or stay in regular contact leaves the door open for prob­lems to arise and temptations (the competition)to enter the picture. If the lines of communication aren’t open, the cus­tom­er may not remember you or won’t think to notify you if a problem occurs or a reorder is desired.

As a salesperson and as a company it’s important to have programs in place on how to retain customers that is effective and efficient. This will maximize selling efforts and deliver the best bottom line results.

In the New economy it’s not enough to just stay in touch. Staying in touch is important but it’s only half the battle. Once contact is made, you must use the opportunity to the maximum advantage. This means that when you make customer  retention calls they must be:

Unique. Each call should have its own unique reason for existence (follow-up on a new product, information on company inno­vations or changes and new incen­tives).  Provide the customer with new information, ask additional questions, tackle varied topics.  Your customer does not want to rehash old information or waste time.

Memorable. Make each call count by making a lasting impression on the custom­er.  Customer retention calls are a personal­ly deliv­ered commercial for your product or service.  Offer your customers “food for thought”, make them laugh or give them something to remember the call. If you don’t do something to stand out in the “sea of sameness” your message will forgotten soon after you leave the call.

Personalize. Since most sales are emotional decisions supported by logic you must use theses call to connect with your customers on an emotional level. Helping your customers emotionally identify with you. your product and your company is an essential step in building customer loyalty.

Many salespeople view customer retention calls as perfunctory at best and occasionally a waste of time. Miscalculating the importance these calls usually leads to the deterioration of a relationship and ultimately lost sales.

How to retain customers on a regular basis must become a priority if you want to protect your most important asset, your customers. Remember the saying, “If you don’t take care of your customers someone else will!” Put a customer retention plan in place today.

To learn how your customer retention plans stacks up take the Growth Positioning Survey now.

How to Retain Customers When You Discover a Problem

How to retain customers when you discover a problem with your product or service is important because it sets the tone for the customer relationship.Even the best products and services occasion­ally have prob­lems. When they do, you should look upon the situation as an opportu­nity to earn customer confidence. Why? For two good rea­sons:how to retain customers

  • Some customers never know how good a product or service is until they experience a problem.
  • Solving that problem can strengthen the relationship by physically and emotionally demonstrating your concern, integrity and commitment.

If you discover a problem, you have two op­tions:

1.  Hope the customer doesn’t discover it.

2.  Bring the problem and a solution to the customer’s attention.

Taking the first option is like hiding your new golf clubs in the basement or standing in front of the big dent in the car: eventually, someone will find out. Eventually, your customer will discover the problem. The cover-up may only worsen matters because customers will not only question the quality of your product but your integrity as well. The second approach is not without its risks, but the potential reward of a satisfied customer is generally worth the draw­backs. Learning how to retain customers when this situation arises is a “moment of truth” that ultimately will shape the customer experience you deliver.

The inherent risks of bringing a problem to the customer’s attention can be eliminated or mini­mized by these factors:

  • Your presentation manner. Are you able to connect with the customer on an emotional level?
  • Quality of the solution. Does your solution address the customer does stated and implied concerns?
  • Effectiveness of the implementation. Do you deliver what you promise?
  • Follow-through. Do you confirm that the customer’s concerns were met?

In a technology-driven  business environment it’s easy to use email, voice mail etc to deliver your message. Don’t fall into that trap. Retaining customers is your goal so it’s important to address product problems with a personal touch. This means connecting personally with the customer whenever and wherever possible.To effectively handle this type of moment of truth take the follow­ing steps:

  • Explain the problem. Avoid trying to fix blame. Accept personal responsibility.
  • Acknowledge and listen to the customer’s concerns. Listening to and observing the custom­er’s “words and music” will help you gauge how to present your solution.
  • Address the problem with a course of action.  Your solution should address the cause of the problem as well as your cust­omer’s concerns.
  • Maintain the customer’s confidence in the product or service. This is usually accom­plished after you have imple­ment­ed the solution to the customer’s satisfaction. It requires conscientious fol­low-up on your part.

Problems will occur with your products and services. How you retain customers when they do should be an integral part of how you conduct business. Be pro-active and keep the customer’s needs and emotions in mind when you respond. Your actions will help define the quality of the customer experience as well as the longevity of the customer relationship.

Want to learn how your customer relationship strategies stack up? Take the Grow Positioning Survey now.

 

How to Retain Customers in the New Economy

Learning how to retain customers is essential for surviving in the New Economy. Without customers you have no bushow to retain customersiness so caring for them and nurturing relationships with them seems like an obvious strategy. Think again. Poor customer service is the number one reason customers stop doing business with their current supplier/provider. In fact according to a Harris Interactive study 86% of consumers stop doing business with a company due to poor customer service.

Companies spend huge amount of their budget attracting customers to their business only to lose them due to the customer experience they deliver. Trying to grow your business without a solid customer service program in place is like trying to fill a bucket with water that has gaping holes in it. Unless you fill the holes you’ll never fill the bucket.

What holes should you fill first? It depends on your business but to a Right Now study the top three customer service problems were:

  • 73% Rude staff
  • 55% Issues weren’t resolve in a timely manner
  • 51% untrained staff

Also according to the US Small Business Administration 68% of customers stops doing business with a company due to indifference. This means if you want to drive your customers away in droves you should ignore them,treat them rudely, serve them with uninformed staff and make them wait for issues to be resolved.  This is an obvious recipe for disaster.

Most businesses know that it costs 5 to 6 times as much to get a new customer as it does to keep an existing one and that existing customers are more profitable than new customers. So why don’t more companies do a better job learning how to retain customers? Lack of focus, training and follow up are the likely culprits. Many businesses seem to be saying, “I don’t have time to take care of my existing customers because I too busy chasing new ones!” If this is you or your business, STOP IT!!!

If you want to survive in the challenging times we live in you must fill the four biggest holes in your customer retention bucket. Put these simple, proven and powerful strategies in place starting today.

1. Pay attention to your customer. Don’t ignore them or take them for granted. Use whatever means available to you to cultivate a relationship with each and every customer.

2. Don’t hire rude employees and fire the ones who are. Companies like Zappos and Southwest Airlines take great care to hire people who are wired to give great service. If they are rude to anyone during the interviewing process they are rejected.

3. Train your people to effectively address your customers’ issues. Investing in the training of your front line staff is like making direct deposits in your customer relationships.

4. Resolve issues quickly, effectively and personally. Everybody makes a mistake. Admit it, resolve it and move on. 92% of customers who leave due to poor service would come back if they get and apology, receive a discount or get an invitation to observe improvement in customer service.

Implementing effective strategies in these four areas will give you a fighting chance to survive in a competitive marketplace.

If you want to thrive in the New Economy then you’ll need to up your customer service game and learn how to retain customers at whole new level. According to Peppers and Rogers Group 81% of the companies who excel in delivering customer experience are outperforming their competition. Customer  service excellence is a formidable competitive advantage. How does your company’s customer experience delivery stack up with your competitors?

To learn how well your company’s customer service initiative are contributing to your success take the Growth Positioning Survey.

How to Retain Customers When They Complain

how to retain customersEvery successful business must learn how to retain customers when they’re unhappy because your product or service failed their expectations. In business customers complain every day. Whenever an airline flight is canceled, a package lost, a meal served cold, a product delivered without all its parts, or a deadline missed, customers are apt to complain. When problems like these occur, the customer is rarely angered by the mistake itself. In most cases, it is the way the problem is handled that makes or breaks the customer relationships. There are two basic approaches for handling complaints: the compa­ny-focused approach and the customer-focused approach.

Company-Focused. This approach has employees justify the company’s position and defend why the mistake happened.  It usually involves the following:

  • Proving you are right and the customer is wrong
  • Showing it is the customer’s fault, not yours
  • Avoiding personal responsibility
  • Telling the customer you can’t or won’t do anything

Taking this approach makes customers feel they have to “jump through hoops” to get rectified what should not have happened in the first place.

Customer-Focused. This approach attempts to make complaints “hassle-free.”  This means providing quick, effective, hassle-free recovery to the customer; you take the heat, not the customer. It also means that if you are ever going to recover, you must get the full benefit of recov­ery. Use recovery as a positive strategy.  Ensure that customer issues get the type of responsive­ness that will turn unpleasant expe­ri­ences into positive ones. Keep in mind that 92% of customers who leave because of poor service would return if they receive an apology, a discount or proof that service has improved.

How to retain customers when they complain is an essential “Moment of Truth”  in the customer relationship. Handle it poorly and you not only lose a customer but the potential customers who are told about the poor service experience. Handle the complaint well and you can not only salvage the relationship but solidify as well.  To handle it well and maintain the relationship make sure that you follow these steps:

  • Say you are sorry.
  • Listen emphatically to the customer’s con­cerns.
  • Hear him or her out. Let the cus­tom­er vent emotions. Circumventing or minimiz­ing the importance of emotion only invites com­plications. Letting off steam may be the beginning of a rational discus­sion.
  • Clarify the problem. Use your questioning skills to properly define the nature and cause of the problem.
  • Take total responsibility for “making it right.”
  • Solve the problem without blaming some­one else. Address the problem with an appropri­ate course of action. Offer a solu­tion based on the nature of the problem and your comp­any’s ability to rectify it. Be careful not to over-promise what you can do to correct the situation. If you drop the ball again, you may not get another chance to carry it.
  • Regain customer confidence in the product or service. This can only be done with ac­tions not empty words and promises. When the solution is implemented, make sure that the customer is satisfied and sees the value of your company’s efforts.

Customers have many options in the New Economy. Drop the ball on them and most will just leave without saying a word. When customers do complain its an opportunity to learn new ways of how to retain customers. View complaints as specific suggestions of how to expand on how you satisfy or exceed your customers expectations.

Complaints will happen. How you handle each one will be your signature for managing the customer experience.

To discover ways in which you can improve your customers’ experience take the Growth Positioning Survey.