Building value in companies should be by design, and not
chance. Owners can and should use dashboard
reports that measure, monitor, encourage and reward teams to do more things
that add value and do fewer things that detract from value.
My friend Chris owns a restaurant and he wanted to develop a
dashboard indicator for “customer experience and advocacy.” The way he looked at things – customer
experience fell into three buckets – let’s use the 80/20 principle to
illustrate:
- 80% - “satisfied customers” resulting from employees “doing their job sufficiently.
- 10% - “disgruntled customers” who will not return and will tell their friends and others about how the service was awful. Social media sites like Yelp amplify the problem.
- 10% - “advocate customers” were thrilled with the experience and will tell their friends and others - using Yelp and other sites to amplify their exuberance.
The observation Chris made was that disgruntled customers
detracted from value while advocate customers enhanced value. The annual goal was to decrease
disgruntled customers closer to 0% and to increase advocate customers to 20%. The solution was to develop and broadly
share a customer experience index “CEI” to track and reward progress.
Every person in the restaurant was brought into a meeting to
talk about how customer experience translates to profitability, job security
and how they, the team and the restaurant are perceived by the most important
stakeholder – the customer. Everyone agreed that a full restaurant
and bar translated to more income – especially tips – and that the working
environment was a lot more fun when the place was packed!
Open conversation about what worked extremely well and what
needed to change took place without blame or threat. In fact, a little bit of team building happened and the
employees were appreciative that they were included in the conversation and had
a chance to talk about specific changes in behaviors that would improve the
CEI.
By building agreement on what and how the dashboard would be
developed and used, total buy-in took place that resulted six months later in
nearly no disgruntled customers, 14% advocate customers and a 23% increase in
revenues. Chris was thrilled with
the outcome and developed a short-term bonus program tied to dashboard results
for the Client Satisfaction Index and revenue – to further incentivize his team.
So my challenge to you is to think about YOUR business and
customers - and develop dashboard indicators appropriate to drive MORE value
creating activities. While doing
this, include your team in the process and get their buy-in. The results may surprise you!
ABOUT EARL BELL
Earl coaches and consults with owners, business leaders and their teams, teaching them how to dramatically reduce the time it takes to improve profitability, customer experience, employee engagement and company value, while simultaneously increasing discretionary time and reducing both stress/employee burnout. He believes the secret to winning in baseball, business and life can be summarized in a simple formula: Winning = Service + Humility. His motto is that Winning in Business is a Team Sport!
Earl has served in the Chief Financial Officer role for numerous companies throughout North America. His personal passion is youth sports and he has coached 28 teams since 2002. Earl is a CPA, graduated from SU (Seattle University) with a BA in Accounting and from the MILL (Mercer Island Little League) with a Master’s in Youth Baseball.
