Those of you who follow me on Facebook may recall that I complained a few weeks ago when the Hilton Vancouver Airport did not have wireless Internet access available in my sleeping room.
In what was a key moment of truth, the Hilton turned the bad situation into a great customer experience.
Upon returning to my room after teaching all day, the following note was slipped under my door:
And, on my desk sat this:
Congratulations to C. and C. and our new Pricing with A Purpose Team!
We just received the signed quote on this deal. Utilizing the tools Ed has been arming us with, we bid this job 100% higher than we would have under our traditional methodology. We had no push back from the client regarding the price, as we priced it based on the value of the solution to the them.
We have 3 more of these new quotes in negotiation with clients now and a couple more that we are actively developing.
This is such an exciting change for us. Looks like 2012 is going to be fun with lots of leads in our pipeline and tools to maximize the profits on each win!
Thanks to Ed Kless for his coaching, poking, prodding, nudging and continual course adjustment!
This is truly and HSD for me!
If you are interested in attending an upcoming Firm of the Future Symposium, please visit sageu.com.
Fellow Sage team member Greg Tirico posted an interesting link to an article which suggests that small and medium businesses are beginning to favor social media spending over paid search.
I have always thought of paid search (and even SEO) as a mistake in the consulting profession because it tends to lead to poor customer acquistion. In other words, it produces more D and F customers than A or B customers.
By their very nature web search prospects are in the gather information step in the buying process. They tend to be tire kickers who are generally looking at buying more on (pun intended) low price rather than a long-term relationship.
I think social media has the potential to change this because it turns search on it head. Instead of looking for people who already have their hand in the air (an intercept lead), social media allows the providers to look for people who have unrecognized need.
In my opinion, it is a much better place to spending marketing dollars.
At a recent Firm of the Future Symposium with the THRIVEal Network in Greenville, SC, Ron Baker and I were asked about some of our word preferences. On the spur of the moment we developed this quick list of words we believe should be avoided by professional knowledge firms.
Staff – This makes us think of a type of infection. We prefer team member, colleague, associate, or people as alternatives.
Client – In ancient Rome, the lawyers of the day functioned as public servants and were not paid for their work. Instead, they were appointed to their duties in working with their clients. The relationship was not one of equal status and implied a sense of duty and obligation to serve the great unwashed. The word still has this connotation in the context of social workers and their clients. We prefer the term customer which is an Anglo-Saxon word derived from the fact that it was the custom of certain people to frequent a particular place of business.
Value billing – Nothing will set a VeraSagi (our made up and officially adopted name for someone from VeraSage) off into a tirade faster than calling the pricing practices we espouse value billing. A bill is produced in arrears whereas a price is agreed to upfront. This term is linked with professionals when the do write-ups to a time calculated bill. We believe this practice to be more akin to mail fraud. The preferred terms are value pricing, pricing on purpose, or pricing with purpose. When discussing price with a customer we suggest the term fixed price or open (meaning transparent) price.
Fee – This word has a negative connotation as it is associated with governmental and penalty type incursions. We suggest the use of the more neutral word price.
Hours – We believe the only place time spent should matter is in prison. We would ban all use of the word hour and suggest a $5 fine whenever it is used. There is no acceptable substitute.
Training – Horses and dogs are trained, humans are educated. Training implies a bullwhip lashing sounds in the background. Also, do you want your 16-year-old daughter to get sex training or sex education.
Service – We believe most professional firms do not provide services. They provide access to and/or transfer of knowledge, results, objectives, and occasionally goals.
Did we miss any of you favorites? If so, please leave a comment with the term to be avoided and your suggested alternatives.
NB: This is for Sage Partners only. The rest of you can hit delete.
The Customer Loyalty Program is perhaps the best program that we (Sage) have available. I am constantly surprised at how few partners take advantage of this free program. All you need to do is Enroll in the Sage Customer Loyalty Program by September 16, 2011.
The program provides you access to a powerful surveying tool that will be deployed to your customers With this vital information you can develop strategies to improve customer retention and loyalty.
Here is a Top 10 list developed by Diana Waterman who runs the program for us.
Top 10 Reasons why you don’t want to miss out on the CLP
- You’ll find out how your customers really feel about your organization.
- There is no cost to participate because Sage is picking up the tab.
- Sage’s third party vendor administers the survey on your behalf.
- You’ll have access to a dashboard that will enable you to view results from each of your individual clients.
- You can customize your survey by selecting from a bank of additional survey questions that match your business offerings and add them to the standard questions.
- See how you stack up against your peers and compare yours ranking results against overall partner benchmark for the product lines that you carry.
- You’ll get a Customer Loyalty Program Workbook that will help you understand the concept of the Net Promoter survey, the scores, and how to make the most of it for your business.
- You can compare your scores year-over-year.
- You have an opportunity to win one of four President’s Circle Customer Excellence Award spots for the highest promoter scores in an eligible product line category.
We only off this program once per year. Don’t miss the September 16 enrollment deadline. Complete the Customer Loyalty Program online Enrollment Form today! Log on to the Sage Partner Marketing Resource Center and select the Partner Programs tab.
If you have any questions about the Sage Customer Loyalty Program, please contact Diana Waterman at 703-443-6584.
At a recent conference one of the speakers presented the following syllogism:
- What drives a company –> sales
- What drives sales –> marketing
- What drives marketing –> data
The implication is clear, ultimately data drives a company. Unfortunately, this thinking is all too prevalent in the business world (perhaps, just the world, leave business out of it).
It is also wrong. Actually, it is not just wrong, it is confusing cause with effect. Data is not the cause of company activity, it is the effect of it.
Instead, I would like to posit the following syllogism:
- What drives a company –> profit
- What drives profit –> creating value for customers
- What drives value for customers –> innovation
- What drives innovation –> knowledge
- What drives knowledge –> relationships (conversations)
In my chain it is relationships that ultimately drive a company.
Attention Sage Partners: If you have not done so already, please carve out a few minutes this week to nominate one or more of your customers for the Sage Customer Awards Program.
This program gives partners the opportunity to recognize their customers for their outstanding achievements through the use of Sage solutions. Nominations are being accepted in the following categories:
- Best Use of Multiple Sage Solutions
- Community Stewardship
- Extraordinary Customer Experience
- Healthcare Best Practices
- Lifetime Achievement
You can nominate your customers by visiting –> http://www.sagenorthamerica.com/Customer-Resources/Customer-Awards-Program. Nominations end May 3, 2011.
Winning customers and partners will be recognized during the 2011 Sage Summit conference on July 10, 2011 in Washington D.C.
I continued, “Would you want Sage to bill you by the hour for support regardless of the outcome of the call?” The reaction was clear. “HELL NO!” one participant shouted.
Yet, the majority of Sage partners (and all professionals for that matter) that I encounter still bill their customers by the hour. Some have even twisted the idea into thinking it is the right thing for a customer. “You will only pay for what you need,” they claim.
I am here to tell you using the ABH (almighty billable hour) is not an ECE (extraordinary customer experience). Sage partner, Sonia Gray, once told me that after she switch to fixed price agreements, one customer told her, “I am so glad you price this way now. I always thought the billable hour was a license to steal.” Wow!
Here is a list of just the customer experience reasons to abandon the ABH, based on Chapter 7 of Ron Baker’s treatise Professional’s Guide to Value Pricing.
- It creates a conflict of interest between the consultant and the customer (the very person you are trying to help). It is the customer’s best interest to reduce the number of hours; it is the consultant’s best interest to increase the number of hours. Hmmm.
- It focuses on the efforts, not the results. Your hours are the inputs, not the output. The output is the solution to the customer’s problem. Focusing on hours would be like counting the number of swings a batter takes in baseball and ignoring the hits or lack thereof.
- It puts the risk of the engagement back onto the customer. This is lunacy because the customer is paying you to reduce the risk, billing by the hour transfers this risk back to the customer, no wonder they don’t want to pay your bill. When you reduce your risk, you also reduce you potential reward, meaning your potential profitability. Being in business is a risk, embrace it.
- It creates a corporate welfare system. Often times it is the C and D customers who complain most and are granted relief of, at least part of their payment. In order to make up for this in the aggregate your company must do something in order to remain profitable. The something is, ultimately, charging more to the A and B customers who complain least and rarely do not pay. You are, in effect, subsidizing your C and D customers, by taking more from your A and B customers. You are giving to the have nots at the expense of the haves.
- It makes you a lazy project manager. Because the customer is “paying for what they need,” scoping and change requests become a non issue. Why bother? They are not paying for a scope of work, they are paying for your hours. This allows you to a) not scope the work properly in the first place and b) assume every change requested by the customer to be in the “new” scope. Partners then complain about scope creep. This is nonsense because, in my opinion, you never really had scope in the first place.
- Lastly, it does not set your price upfront. An hourly rate is not a price unless you are only selling one hour. A range-of-hours proposal (always couched with “this is an estimate”) is a guess. Worse still the customer will only look at the low number, whereas, you will only look the high (plus 10 percent). Customers, like you when you buy stuff, want a price. It is a rational request, honor it.
Have I missed any? I am sure I have.
MAS 90 Guru, Wayne Schulz told me about a cool customer service feedback mechanism that 37signals uses. 37signals are the creators of
TypePad, MoveableType and other blogging solutions Basecamp, Highrise, Backpack, and Campfire, all web-based collaboration software solutions.
What they do is post, for all the world to see, the rating of there most recent 100 interactions with customers on a simple three point scale: great, just OK, and not so good. They tally the ratings and post them on a real time basis.
This is brilliant. It is simple, easy to understand, and I would think relatively easy to do.
How about doing them one better and posting it on your home page?