Eight Business Red Flags That Require Your Attention
Posted on May 23, 2016 by Lioness Staff
These days providing a great—heck, exceptional—product or service won’t keep customers happy. (You can thank the hyper-connected global economy for their fickleness.) No, we must also delight customers with an outstanding service experience. Problem is, it’s all too easy to assume they’re delighted while, in reality, they have one foot out the door with an eye trained on one of your many (many) competitors. Is there a way to tell if your company needs a service overhaul…before your customers take their leave?
“Signs that you need to pay more attention to the customer experience can be very subtle,” warns Joseph Michelli, best-selling author of “Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way.” “In fact, some signs might not initially seem to relate to ‘service’ at all. The good news is, knowing and paying attention to these red flags can help you correct your course while there’s still time to recapture your customers’ loyalty.”
Michelli—who worked with Mercedes-Benz USA to positively and dramatically transform its customer experience and who has written books on service giants like Zappos and Starbucks—knows just how hard it is for most organizations to keep customers happy for the long haul. Here, he shares eight service-related red flags that require your immediate attention.
Red Flag #1: You’re not asking your customers how they feel. Directly asking customers what their level of satisfaction is, and why they feel that way, is a simple but crucial component of providing outstanding service. (No, making assumptions about how customers “seem to feel” based on their attitudes, foot traffic, web traffic, or even sales metrics isn’t good enough.)
“Even if you’re doing well profitably right now, you lack indicators to tell you if you’ll be dead in the water tomorrow,” comments Michelli. “It’s possible that you’re flatlining and you don’t even know it yet. Consistently harvesting customers’ opinions is the only way to keep your finger on the pulse of their service experience.”
Red Flag #2: You aren’t taking a “customer’s-eye view” of the service experience. Sure, you might be investing plenty of time, money, and energy in making customer service improvements. But if you haven’t taken the time to map and design the service experience from the customer’s perspective, you’ll inevitably do a lot of work that’s irrelevant.
“It’s important to take a holistic view of the customer’s journey at all touchpoints, ‘cradle to grave,’ even beyond the transaction,” Michelli confirms. “If you don’t, sooner or later, all of your incremental efforts at positive change are going to miss the mark.”
Red Flag #3: Your social media strategy is halfhearted (at best) or (worse) nonexistent. No matter how popular or established your company is, no matter how loyal you think your customers are, you need to establish a social media strategy.
“The young market doesn’t look up companies in the yellow pages,” says Michelli. “Often, they don’t even use email when they need help or want to ask a question. They turn to Facebook, Instagram, and Twitter. But this isn’t just about millennial customers—even baby boomers are deeply interactive online! If you don’t make it easy for customers of all ages to contact and engage with you in the way they prefer, you’re treading on thin ice.
“Oh, and this may go without saying, but be sure you also have a working, updated, intuitive website,” he adds. “Preferably one with a blog that regularly pushes out helpful information.”
Red Flag #4: You’re not listening to what people are saying about you online. Maintaining an active, updated social media presence is only half the online equation.
“Sooner or later, the voices online are going to turn the market away from you,” Michelli explains. “If you’re not monitoring what people are saying about your company, your competitors, and your industry in general, it’s just a matter of time before you find yourself wondering what went wrong. But be aware: Managing the online chatter doesn’t mean trying to argue with critics; it means really trying to fix problems and turn those critics into advocates.”
Red Flag #5: You aren’t transforming prospects into buyers. If you’re spending plenty of money on marketing to drive traffic but can’t get people to walk in the door, it’s not them—it’s you. Your efforts to serve and engage (potential) customers aren’t working, and it’s high time for an overhaul.
“The same thing is true for conversion,” Michelli notes. “Say people are walking in but you are not earning sales in ways that are in keeping with growth. While you may have lovely products and a lovely visual, you’ve not figured out how to help people make the connection to becoming buyers—and that too is a service issue.”
Red Flag #6: You take a laissez-faire approach to referrals. Tracking referral business and rewarding referrals is an important part of providing outstanding post-transaction service. “You’ve got to leverage your existing zealots to generate business and to make sure they continue to choose you instead of your competitors,” says Michelli. “Great service brands teach their staff how to help their customers effectively refer them to other like-minded consumers.”
Red Flag #7: You rely too heavily on your Net Promoter Score. A Net Promoter Score (NPS) is great for measuring the strength of your customer relationships right now—but it doesn’t give you the whole picture. A low NPS doesn’t tell you what to fix. A high NPS doesn’t reveal where you have an opportunity to forge an even better connection with customers by satisfying them at even more key moments.
“Relying too heavily on your NPS is like hoping to lose weight just by looking at the scale,” Michelli explains. “If you don’t track other metrics like what you’re eating and how much energy you’re using, you won’t know how to affect the scale two weeks later. So be sure you’re also capturing other real-time analytics and leading indicators—like high-value touchpoints, satisfaction ratings, and so forth—that will help you understand where breakdowns are happening and how you can intervene.”
Red Flag #8: Your employee turnover exceeds industry standards. Yes, some employee turnover is healthy. A certain percentage of your population has to move to keep your organization dynamic. And if it’s the “right” people who leave (i.e., low performers), all the better. But if your turnover is approaching or exceeds industry norms, you have cause for concern.
“Large pockets of turnover are often reflective of an unhealthy culture—and unhappy, disengaged employees do not provide outstanding service,” Michelli states. “Plus, during tumultuous turnover, your customers are interacting with a new brand every day. They’re not getting the benefit of seasoned service professionals who have a great deal of corporate knowledge and product knowledge, as well as the type of enthusiasm that becomes infectious in the life of the customer.”
Michelli adds that there’s one more, not-quite-as-objective litmus test for gauging your customer’s satisfaction, engagement, and loyalty: Do they seem willing to spontaneously sing your praises? If not, their opinion of you is probably “meh”…and “meh” can be deadly.
“Can you imagine a customer putting a bumper sticker on their car telling others how much they love your company?” he asks. “If not, that’s a red flag, because these days, Facebook ‘likes’ are the new bumper stickers. If you can’t see your customers being excited enough to publicly say, Yes, this is a brand I’m proud to be associated with, you are missing opportunities to secure satisfaction and emotional engagement.”
Joseph A. Michelli, PhD, CSP, is an internationally sought-after speaker, organizational consultant, and New York Times number-one best-selling author. He is a globally recognized thought leader in customer experience design.