Using Customer Service as a Competitive Weapon

December 11, 2006
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CHARLESTON, S.C. - You might not think that a picture framing business could teach mechanical service contractors very much. You might want to re-think that.

Jay Goltz is the chief executive officer of The Goltz Group, an Artists’ Frame Service he founded upon graduating from college in 1978 with an accounting degree. He looks at customer service as a competitive business weapon, especially in markets where customers have come to expect little or no good service. He later diversified his business to include Jayson Home & Garden and Chicago Art Source, taking it from a $100,000 business in 1978, to a $15 million business today.

Goltz said he learned about customer service and management from his dad. “I grew up in my father’s dime store,” he told members of the Mechanical Service Contractors Association (MSCA) Educational Conference. “My father taught me about customer service. I took it to an industry that didn’t have it.”

The cost of customer service, he said, is 1 or 2 percent. “Most customer service doesn’t cost anything,” Goltz added. “It’s a change in attitude.”

Table 1. Projected growth increases from making changes that result in 5, 10, or 15 percent growth annually.

LITTLE CHANGES, BIG PAYOFF

Customer service, he explained, is “what it takes to be extraordinary.” Little things count; things like how the phone is answered, what your correspondence looks like, what your employees and vehicles look like. “Five to 10 percent of the people you encounter notice this stuff,” Goltz said. “These are the people that will grow your company.”

If you start with a $1 million business, for example, and you can maintain a larger growth rate by being “a little bit better,” the results are “staggering,” Goltz said. (See Table 1.) To achieve those small changes, the low-hanging fruit, look into setting standards in the following areas:
  • Phone. “Who’s answering your phone? Have they been trained to deal with questions on products and services,” Goltz asked. “Were they trained to deal with angry or dissatisfied customers? Can they handle customers with confidence?”
  • Correspondence. “Does your correspondence look fresh, professional, smart? Some companies look like they’ve got it together, some look like they’re working out of a garage.” Keep in mind, too, that “trucks are marketing material.”
  • Proposals. Of course, these should be neat and professional looking.
  • Turnaround times. Keep them fast, but realistic, so they can be met.
  • Company appearance. That includes people (and uniforms), vehicles, and the facility in general.
  • The last impression. “What’s your leave-behind?” Goltz asked. “Is it in a neat little folder, or is it the fourth copy of a carbon set? Do your employees have a contact person with your customer, or do your people just show up and do the work?”


THE RIGHT PEOPLE

Goltz didn’t pull any punches when it comes to staff. Do what you can to hire the right people in the first place, and get rid of the people who are dragging your company down.

In general, he said, one out of every 10 applicants will be a good match for your company. “Three out of 10 people you interview will be bad for the position,” he said. “Another three will be mediocre. Three aren’t bad, but they’re not for you. One will work.”

Cast a broad net, he advised. “Get lots of applicants in.”

Are you checking references? “You’ve got to,” Goltz said. “Don’t trust anybody. Get a cynical person’s perspective on a potential new hire. Are they lying about their skills, or are they just delusional? Cynical people have filters for that sort of thing,” he said.

Great companies have a structured, intense hiring process, he said. But the interview shouldn’t be done by the president/owner, so if you are trying to control this process, re-evaluate what your role should be.

Once his company hires the person they want, Goltz said, that person goes through an “indoctrination” to the company’s culture. “I purposely don’t call it orientation,” he explained. “Orientation is where the bathroom is.”

STAY OR GO NOW?

Retention is the key to maintaining a staff of employees that fit within the corporate culture. “If you treat people right, give them a forum to speak up, and regular reviews, your rate of retention will go up,” he said.

Getting rid of the bad people, on the other hand, is an obligation. “The fives and sixes will drag your company down,” Goltz said, referring to a rating system that scores employees on a scale of one to 10. “People will say, ‘Oh, they’re trying so hard,’ or you hear that they have personal problems. Don’t kid yourself,” he said. “You can’t run a great company with the wrong people.

“How many customers do they have to piss off? How many employees do they have to make a negative environment for?”

The source of these problem employees, Goltz said, goes back to poor hiring decisions. Those choices often come from desperation. “Desperation and hiring go together like nitro and glycerin.

“Is there anyone who works for you who would make you happy if they quit,” he asked. “If you’re firing a lot of people, you have real problems at the front end.”

TRAINING AND TRACKING

Once you have the right people for your company, you need to make sure they are trained in customer service. “Do your employees really understand the price of failure?” Goltz asked.

He recommended training in role reversal. In short, put themselves in the customer’s shoes in a variety of scenarios.

Is the customer always right? “No,” he said. “But the customer is usually right. For $40 or so, it’s not worth arguing with a customer.”

When it comes to problem resolution, Goltz used the acronyms SAVE (as in, save the customer) and DRIVE (attitudes that drive the customer away).

SAVE stands for Sympathize, Act, Vindicate, and Eat something (a cost, for example, of a replacement). DRIVE stands for Defensive, Rationalize, Ignore, Vilify, Eager to move on.

Control systems, he said, help the owner monitor and make sure things are going right. Tracking can be done through thorough worksheets, job tickets, “hot” sheets, and good old customer follow-up.

Finally, Goltz pointed out the importance of inspiring the troops. Holding regular meetings, he said, is an ideal time to make sure everybody is on the same customer service page, and allows a forum for problems to be addressed - yet, many companies do not hold regular meetings. “That’s like a lumber-jack thinking he doesn’t have to sharpen his ax.”

For more information, visit www.jaygoltz.com.

Publication date: 12/11/2006

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