Posts filed under 'Service'
Recently a client brought up the question of “who defines service”. Not WHAT the specs were. But HOW the end-user should receive service.
This client is a large corporate service department of a large, very large corporation (did I say they were large?). They provide service to their end-users, all who are part of the same company. Get the picture?
So, my client, as a service provider, asked “who defines service”?
The Dilemma
My client was concerned their end-users would expect Nordstrom’s type service. When obviously that wasn’t possible even with their significant resources.
Their end-users are mandated to use my client. They’re not supposed to have the option of going outside for service.
Mandated or not, end-users still have some expectations of HOW they want to be served.
And my client felt they couldn’t give everything that their end-users wanted. And so the question arose “who defines service”?
An Answer?
We did our best to provide an answer. And it may not have been as definitive, or as satisfying as our client would have wished. But reality is like that sometimes.
Here is one answer in two parts to “who defines service”?
Part #1 Service Scope
The budget and business contribution of the end-users defines WHAT is done for them. You’ll recognize this as scope defined in service specifications.
The more important and/or valued the end-users, the more services will be scoped, budgeted and paid for to take care of them.
Part #2 End-User Expectations
End-users define HOW they want to be served.
Just ask ‘em. They’ll tell you.
The service provider must do everything they can to bring end-users expectations as close to reality as possible.
Then the provider must work hard to help end-users perceive as much of the services that were delivered, and the quality of those services too.
Expectations Aren’t Always Fulfilled
Seems a bit too simple, but there it is. Just because end-users might expect Nordstrom’s service within their corporate office, doesn’t mean they’ll get it.
But the burden to communicate to end-users falls fully, and entirely on the service providers’ shoulders. It’s their job to influence expectations and raise perceptions.
And that’s in addition to doing the work on time, on budget, and in compliance with contract, environmental, social and legal requirements.
Tough order? Nah, it goes with the territory of service provider. Doesn’t matter if you’re an internal department serving your fellow employees, or an outsourced contractor. It’s all part of the game.
How, and who, defines your service?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: service, service scope, specifications
August 12th, 2008
…the act of misleading consumers regarding the environmental practices of a company or the environmental benefits of a product or service…
Bandwagons are for jumping on.
And Green is playing loudly everywhere, especially in the facility services arena.
Greenwashing was inevitable. There’s always a population of businesses and individuals trying to capitalize on deception and misinformation.
Why? SourceWatch lists a number of reasons why companies greenwash, but the one they list I believe is the main driver is:
“…seeking to expand market share at the expense of those rivals not involved in greenwashing; this is especially attractive if little or no additional expenditure is required to change performance; alternatively, a company can engage in greenwashing in an attempt to narrow the perceived ‘green’ advantage of a rival…”
Not all green marketing claims are false. But add a healthy dose of cynicism and some investigation to the claims.
And it’s never black and white for those who are, and who aren’t greenwashing. There’s always a location on a sliding scale that gives a rationale for claiming Green.
Is it using a few Green Seal products? Or is it being certified ISO 14001:2004 at all a companies locations?
Who’s to say?
In the very near future Green will be a requirement, like following OSHA. Really, who markets their contract business is OSHA compliant. It’s a given, an expectation. So it will be with Green, evenutally.
But for now, here’s an excellent guide to greenwashing (it’s a large file, 2.82 mb) from Futerra Sustainability Communications. Though written for the U.K. it gives a great window into greenwashing.
Where have you seen greenwashing lately?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: environmental marketing, Green, Green cleaning, Greenwashing
July 12th, 2008
Last week’s post, The 5 Service Dimensions All Customers Care About , referred to research showing how customers assess the quality of a service.
That post prompted a contractor to point out a leading question.
How does Service Quality figure in Buying Decisions?
My contractor friend pointed out when customers buy a service, pricing far outweighs service quality and other factors.
“…SERVQUAL has not yet matured into RFP evaluation matrices - they are there, but are dwarfed by pricing evaluations in weighting. So…SERVQUAL is important, but customers need a definitive RFP process and evaluation technique built…that joins SERVQUAL and governance (mandatory bids) into a true test of contractor service delivery.”
Pricing in Bid Evaluations
Pricing’s importance in bid evaluations varies by customer, service and RFP. There are no absolutes.
I’ve seen survey results where customers were asked to rank factors used selecting security contractors. Pricing came in 4th, after management, supervision and training.
I’ve also seen public airport evaluations for janitorial services. Pricing was weighted 1st by a large margin over the next factor.
But Where’s Value in Bid Evaluations?
Value is what customers receive after services have been delivered. The net impact at the end of the contract.
It seems the most difficult task in buying services is to identify the value offered. And then determine the likelihood that value will be delivered during the contract’s life.
And that’s rarely done in RFPs.
It’s more common to choose a contractor on its qualifications listed in the proposal. Which is like the investment disclaimer “Past performance is no guarantee of future results”. But it seems that’s what most customers work from when selecting contractors.
Wow. Customers must identify value before services are delivered. Then calculate the odds it’ll actually be delivered. And they have to do this all in the bid process. It’s like asking customers to be fortune tellers.
And What About…?
The “where’s the value” question leads to other questions, such as:
- Is contract compliance the same as value delivered? (Contractors going through the motions?)
- After contract award, how diligent are customers in determining they’ve received what they’ve been promised?
- How likely are customers to admit selection errors & change contractors when they’ve published new budgets based on lower costs?
If Customers Only Knew This About Buying Services…
I’ve consulted with service contractors for the last 12 years.
During that time almost every contractor has voiced a desire for customers to better understand what they’re buying. Translated that means if customers really knew better they’d buy that particular contractor.
And having participated in 100s of bids as a consultant and former contractor salesperson I see the truth in that. Some RFP processes are so balled up they’re an embarrassment to RFPs in general.
But there it is.
There will always be an educational need to help customers make better contract decisions.
The Service Contractors’ Manifesto
What if contractors could publish a document telling customers everything they need to know about contracting services?
That might help fill the gulf between what contractors want and customers do.
Next week I’m starting work on a Service Contractors’ Manifesto.
When finished it’ll be a public declaration of service contractor thoughts on better contract relationships. From buying services in the RFP process to ongoing management to inevitable rebids.
The manifesto isn’t about one contractor. But general principles all service contractors would want customers to believe and buy in to.
I’ll ask contractors for their ideas by posting additions or comments online to the blog.
Who knows, maybe the Service Contractors’ Manifesto will be sent to those customers who want to learn more. Those who want to create more valuable contractor relationships. We can only hope and try.
What are you doing to help your customers make better contract decisions?
April 4th, 2008
Contractors want to know what customers care about, what’s important to them.
Service quality is a good guess. Price, and to a minor degree product quality, also count.
But for service contractors, customers care most about service quality. Check the research. Statistically valid research.
Of course, contractors can always ask customers. But lacking the money, time and skills, why not look to the leading research for that understanding?
That would be “Delivering Service Quality
“, by Valerie Zeithaml, A. Parasuraman and Leonard Berry.
Even though service quality research has progressed since 1990 when first published, this book is still the fountainhead. I referred to it in Gap 5 & Roswell, and I’m using it here again.
The 5 Dimensions Defined
After extensive research, Zeithaml, Parasuraman and Berry found five dimensions customers use when evaluating service quality. They named their survey instrument SERVQUAL.
In other words, if contractors get these dimensions right, customers will hand over the keys to their loyalty. Because they’ll have received service excellence. According to what’s important to them.
The five SERVQUAL dimensions are:
TANGIBLES
Appearance of physical facilities, equipment, personnel, and communication materials.
RELIABILITY
Ability to perform the promised service dependably and accurately.
RESPONSIVENESS
Willingness to help customers and provide prompt service.
ASSURANCE
Knowledge and courtesy of employees and their ability to convey trust and confidence.
EMPATHY
Caring, individualized attention the firm provides its customers
Not All Dimensions Are Equal
All dimensions are important to customers, but some more than others.
Contractors need to know which are which to avoid majoring in minors. At the same time they can’t focus on only one dimension and let the others suffer.
SERVQUAL research showed dimensions’ importance to each other by asking customers to assign 100 points across all five dimensions.
Here’s their importance to customers.
What’s this mean for facility service contractors?
#1 Just Do It
RELIABILITY: Do what you say you’re going to do when you said you were going to do it.
Customers want to count on their contractors. They value that reliability. Don’t contractors yearn to find out what customers value? This is it.
It’s three times more important to be reliable than have shiny new equipment or flashy uniforms.
Doesn’t mean you can have ragged uniforms and only be reliable. Contractors have to do both.
But contractors first and best efforts are better spent making service reliable.
Whether it’s periodics on schedule, on-site response within Service Level Agreements (SLAs), or Work Orders completed on time.
MARKETING THE RELIABILITY MESSAGE
Contractors have used RELIABILITY in marketing to new customers knowing its importance.
One that comes to mind was Allied Security (pre AlliedBarton days) . They produced a series of ads and mailers presenting officers reliability as a percentage of posts filled.
I don’t know how successful that campaign was, but it certainly hit on the right message.
#2 Do It Now
RESPONSIVENESS: Respond quickly, promptly, rapidly, immediately, instantly.
Waiting a day to return a call or email doesn’t make it.
Even if customers are chronically slow in getting back to contractors, responsiveness is more than 1/5th of their service quality assessment.
Contractors benefit by establishing internal SLAs for things like returning phone calls, emails and responding on-site.
Whether it’s 30 minutes, 4 hours, or 24 hours, it’s important customers feel contractors are responsive to their requests. Not just emergencies, but everyday responses too.
REPORTING RESPONSIVENESS
Call centers typically track caller wait times. Contractors can track response times. And their attainment of SLAs or other Key Performance Indicators (KPIs) of responsiveness.
This is great performance data to present to customers in Contract Performance Reviews.
#3 Know What Your Doing
ASSURANCE: Contractors are expected to be the experts of the service
they’re delivering. It’s a given.
SERVQUAL research showed it’s important to communicate that expertise to customers.
If a contractor is highly skilled, but customers don’t see that, their confidence in that contractor will be lower. And their assessment of that contractor’s service quality will be lower.
RAISE CUSTOMER AWARENESS OF YOUR COMPETENCIES
Contractors must communicate their expertise and competencies - before they do the work.
This can be done in many ways that are repeatedly seen by customers, such as:
- Display industry certifications on patches, badges or buttons worn by employees
- Include certification logos on emails, letters, reports, quotes & invoices
- Put certifications into ads, collateral & tradeshow booths
By communicating competencies, contractors can help manage customer expectations. And influence their service quality assessment in advance.
#4 Care about Customers as much as the Service
EMPATHY: Services can be performed completely to specifications. Yet customers may not feel contractor’s employees care about them during delivery. And this hurts customers’ assessments of contractors’ service quality.
For example, a day porter efficiently cleans up a spill in a lobby. However, during the clean up doesn’t smile, make eye contact, or ask the customer if there is anything else they could do for them.
In this hypothetical the contractor’s service was performed fully. But the customer didn’t feel the contractor’s employee cared.
And it’s not necessarily the employees fault. They may not know how they’re being judged. They may be overwhelmed, inadequately trained, or disinterested.
SERVICE DELIVERY MATTERS
Contractor’s service delivery can be as important as how it was done.
Contractor employees should be trained how to interact with customers and their end-users. Even a brief session during initial orientation helps. Anything to help them understand their impact on customers’ assessment of service quality.
#5 Look Sharp
TANGIBLES: Even though this is the least important dimension, appearance matters. Just not as much as the other dimensions.
Contractors will still want to make certain their employees appearance, uniforms, equipment, and work areas on-site (closets, contractor offices, etc.) look good.
The danger is for contractors to make everything look sharp, and then fall short on RELIABILITY or RESPONSIVENESS.
At the End of the Day
Customers’ assessments include expectations and perceptions across all five SERVQUAL dimensions.
Contractors need to work on all five, but emphasize them in order of importance. If sacrifices must be made, use these dimensions as a guide for which ones to rework.
Also, contractors can use SERVQUAL dimensions in determining specific customer and site needs. By salespeople asking questions around these dimensions, contractors can learn how they play out at a particular location/bid opportunity.
What dimensions are you in?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: service quality, key performance indicators, KPIs, quality dimensions
March 27th, 2008
That’s a leading question coming from a consultant. Is it self-serving? You bet.
Now that’s out of the way, let’s look at why this question is worth talking about.
At any time you, or your management are aware of some aspect of your company that should be improved.
If you’re aware of weaknesses or faults, why aren’t improvements going?
I’m not talking about replacing the Accounting Manager or cleaning up the billing mess he created.
It’s not about cleaning up the symptoms. It’s about solving the root cause. That’s the improvement opportunity you know you should be working on, but likely aren’t.
Those projects take effort, time and money (aka limited resources).
Which brings us back to the question “When is the Right Time to Improve?”
Most improvements start when symptoms happen one too many times, or they’re so painful they force you to fix it “once and for all.”
To avoid being stuck in reactive gear, here are some thoughts on the right time to make improvements.
#1 Best Time - Improve When You’re Very Successful
That’s a novel idea. Tackle root causes and improve core drivers when:
- You’re not fighting for survival
- You have the money
- Your staff is energized & motivated
- You can really demoralize your competition
- You can easily create more loyal customers
WHY DOESN’T THIS HAPPEN?
Because when you’re successful, you’re working flat out. Starting up new accounts. Serving existing customers. Who has time?
That’s the problem. Just when you’ll benefit most, just when you can leap ahead farthest - there aren’t enough hours in the day.
UNLESS…
…you recognize this opportunity that’s available only when the planets align and everything is going well.
…the strategic commitment is made to manage growth. Governing resources in a way that includes on-going, major improvement projects.
The Jack Welch/GE strategy of being 1st or 2nd in each business line meant they were always successful, or they weren’t in that industry. And they were constantly investing in improvements, i.e. Six Sigma.
The lesson, when ahead - step on the gas.
#2 Good Time - Improve When Running Evenly
You know this position. It’s when things aren’t going badly, but your business isn’t as successful as you want.
This is a great time and opportunity to implement company-wide improvements. Think about it:
- You’re not up against the wall
- You have money (not as much as you want)
- You have time
However, this opportunity has major requirements. You’ll have to:
- Define desired results in goals, KPIs, etc.
- Measure progress & performance to goals
- Know when you’re not getting the results you want
- Take action & avoid paralysis by analysis
Why might this not happen?
Because there’s not enough pain, yet. The status quo is comfortable. Why change if we don’t have to?
There’s a belief that current improvement efforts are enough. But if you’re not getting the results you want, current efforts are wasting time and resources.
Better act now. Before you reach the phase below.
#3 Worst but Necessary Time - Improve During Crisis
This is not the best time to work on root cause improvements because:
- You don’t have the money
- You don’t have time because you’re plugging leaks in the dam
- Your staff are distracted with impending gloom & doom
- Decisions are made to keep the doors open short-term
When things are falling apart there can be a caffeine rush of energy as everyone pulls together. It’s easy to motivate your troops with “Hey, we’re all going to lose our jobs, unless…”
If you’re smart and lucky you survive. For a while anyway. However, if all that was fixed was the symptom and not the root cause then watch out. Another crisis is around the corner.
And the gung-ho enthusiasm of the first time is lessened the second and third times. Just ask any union airline or auto industry worker.
The real crisis with this time is that you’re always forced to solve the symptom. For survival’s sake.
Turn-around management specialists make their living this way. Then they ride off to the next burning business. Lucky them.
If you’re in it, you’re in it. Keep the doors open, but with an eye to solving symptoms for the long-term.
When do you make improvements?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: Change, Improvements
March 2nd, 2008
On December 14, 2007, Revenue-IQ posted “Consequences” about executive mistakes that cost 1,000s of jobs, yet the execs can easily find new jobs.
On January 27, 2008 the NY Times ran “What’s $34 Billion on Wall Street?” about highly-paid executives being courted for new jobs after their mistakes lose 1,000s of jobs.
Coincidence? Or business savvy?
Either way, the article “What’s $34 Billion on Wall Street?” adds several insights.
1) On Wall Street, the system failed, not the exec. It was bad luck, so give them another chance.
Takeaway: Find a forgiving industry to work in.
2) Personal relationships at the top change failures into lessons learned. The higher up the food chain your friends are, the easier it is to see the exec as gaining valuable experience, rather than just making a colossal mistake.
Takeaway: Find forgiving friends. The higher up the better.
3) Human nature seeks someone to blame. In large failures, that’s the exec in charge. They get the big money, and the big responsibility. But someone’s got to take the rap.
Takeaway: It can be unforgiving at the top. But you already knew that.
I’ve emailed the NY Times reporter asking if my story initiated his and am awaiting his answer 
~~~~~~
Chris Arlen
President, Service Performance
Technorati: layoffs, learning, management
January 28th, 2008
The secret hidden in Roswell’s hangar is not an alien body or spaceship.
It’s Gap 5.
Gap 5 is the reason service contracts are terminated. The bigger the gap, the harder to retain the account. And for contractors, shrinking Gap 5 means keeping contracts longer.
Gap 5 is the difference between customers’ service expectations and their perceptions. As you can guess, there are four other gaps before Gap 5. But they only contribute to Gap 5. Gap 5 is the big enchilada. It’s why customers change service contractors.
Why is Gap 5 in Roswell?
Because it’s a secret.
Customers don’t tell contractors what they expect or how they’ll perceive service. Not explicitly. Not in ways contractors can work with. Also, customers aren’t being asked, or contractors don’t know how to ask.
Specifications aren’t in Roswell
Don’t get fooled into thinking specifications tell contractors what customers expect. Specs only tell the “what”, and sometimes the “where” and “when”. Rarely, if ever, do specs spell out the “how”, “who”, or “why” services should be performed.
When a specific task hasn’t been performed, customers cancel contracts with “you didn’t meet the specs”. However, you can bet the large majority of cancellations are much more subtle. This is Gap 5 in the flesh.
KPIs aren’t in Roswell
Key Performance Indicators are like odometers and speedometers. They show customers how far or fast service has been performing. However, they don’t state what customers are looking for, especially before service is performed.
The Importance of Gap 5
That brings us to Gap 5, which was created back in the mid 1980s as part of the ServQual model for assessing service quality. And although ServQual isn’t perfect, its Gap 5 provides a spotlight on a contract’s potential longevity.
Gap 5 Exposed: EXPECTATIONS
Gap 5 in the ServQual model shows customers’ expectations are driven from four places:
- Customers’ personal needs
- Customers’ past experiences
- Word of mouth
- Marketing communications from contractors
KEY TAKEAWAY: Only one of these factors is controlled by the contractor, marketing communications. The majority of customers’ information is outside contractors’ direct control.
This means contractors must deliver lots of value to existing customers, resolve issues quickly and to customers’ satisfaction, and treat everyone as if they’re customers for life. Because they are.
Gap 5 Exposed: PERCEPTIONS
Customers’ service is driven by two areas:
- Delivery of Service
- External Communications to Customers
KEY TAKEAWAY: Although contractors believe they’re in control of delivery and marketing, they’re not entirely. Perception is everything.
Contractors deliver service and believe customers have seen it. Not always the case. Services by nature are invisible. Customers can’t and don’t see everything contractors do for them.
Think about the day porter or guard helping an elderly visitor through the revolving doors into the building.
Contractors must tangibilize services. That’s what KPIs and Business Review Meetings help to do. But contractors must also seek ways of making their services more visible in ways that customers allow and appreciate. For example, a leave behind note on tenants’ desks when a special service has been done (washing a coffee cup?).
Not always an easy task when customers want their outsourced services to be seen as in-house by their customers.
The Roswell Conclusion
Contractors need to take actions to shrink Gap 5, or suffer high customer turnover as the consequence.
They must define customers’ expectations in ways the contractor can fully understand. Ideally, during the transition before the start of service. And in doing so, they’ll help make customers’ aware of their own expectations.
Also, contractors must make their service delivery as visible and tangible as possible, within the realms of customers’ approval. Then they must communicate their performance regularly (KPIs and Business Review Meetings).
How do you determine customers’ expectations?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: account retention, customer service, service quality
January 21st, 2008
Here’s a belief that’s evolved as I mature (aka getting older). And this belief is frequently lost in the daily grind.
All business is personal.
Earth shattering? Nope. Do we work that way? Always, or most of the time? Let’s look more closely.
Who performs business besides people? Machines? Animals?
Seems obvious. If only people do business, doesn’t that make all business personal? Yes, but.
Business can be performed AS IF we’re dealing only with machines, or animals.
Think about business processes and systems. The goal is to make them as efficient and productive as possible - like a machine. That can make it hard to keep people impacts in mind when focused on efficiency.
How about turnaround execs making fiscal-only decisions ? Short-term financial results produced at the expense of long-term viability? The easiest cuts (people impacts) are to an organization’s support staff and functions. Just the areas that keep the engine of growth and sustainability on the rails. And the new owners (oh yes, there will be new owners) are left holding the bag of a soon to implode business.
What about company policies that try to steer everyone into the same pasture? Customers and employees alike. The goal is to prevent a few strays from leading the herd off a cliff. But do the majority deserve barbed wire?
Whether it’s a business process, exec decision, or company policy, they all affect people. And these people are our customers and employees. Most of them we know, many we respect and enjoy, and hopefully we wish all of them to succeed as we do.
Business is still Business
The “all business is personal” belief isn’t about trying to make everyone happy, and then waiting for record profits and growth to tsunami in.
Business is still business. Companies must make profits, grow revenue, mitigate risk, and increase performance.
But “how” business is performed matters.
The Best Business is Personal
The “all business is personal” belief is about valuing, investing in, even protecting personal interactions and impacts when doing business.
This is a fundamental truth about all businesses. That the best business is personal. Even more so for service businesses.
An Example From the Past
Do you remember Barton Security, the pre-Allied-merger original? Remember their reputation? Their growth?
Barton was a values-based organization. It made all business personal.
Their strategy of taking care of their employees, so they’d then take care of Barton customers, was a chain of personal commitments.
Barton walked the talk about “employees being the company’s most important assets”. They were living their brand promise - first and foremost to their employees. Barton cared about them in ways their employees cared about.
As a result, their employees cared about Barton’s customers.
And those customers cared about Barton the company. Were fervently loyal. And they spread the word. As golden referrals. As word of mouth to colleagues.
Real Results
Barton grew organically to $350 million when it was acquired by Allied in 2004. That was impressive.
At one point Barton was so much in demand they told Silicon Valley prospects they wouldn’t be taking on any new business for a six-month period. Barton wanted to make sure their existing clients were taken care of first, personally, before trying to bring on others. They didn’t want to risk unsuccessful account startups.
Wow! Telling prospects they couldn’t hire you. That immediately made prospects want to hire Barton.
Their “all business is personal” created a strong brand with customers in local markets throughout the country. Their management teams consisted of loyal and committed staff. And their front line employees felt they were treated as people, as individuals, and that their performance mattered. Business for Barton was personal, and their people felt that.
Then they sold the company to Allied.
The Moral of the Story?
I don’t know if there is one. But there is a strategy. For buyers and sellers of facility services, acting and making decisions as if all business is personal pays off.
A long-term commitment to employee incentives and recognition pays off in retaining the best people at market wages.
Making responsible growth decisions pays off in growing at a rate where commitments to customers and employees can be kept.
Engaging contractors in candid and open conversations pays off in long-term relationships with higher productivity and lower total costs of ownership.
In what areas can you make your business more personal?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: security, strategy, management
December 22nd, 2007
Facility contractors try to differentiate themselves to customers by presenting new programs in proposals. It doesn’t end there. Contractors also try to change their own companies for better, faster, cheaper.
Proposing something new for customers or employees to adopt is called, surprisingly, the Adoption Curve.
That’s not its formal name. It’s really called the Technology Adoption Life Cycle . Which first began by tracking how farmers bought hybrid seed corn. Not very high-tech. But six years later the model was flushed out by Everett Rogers in his book, Diffusions of Innovation.
Wikipedia sums it all up with:
“Rogers stated that adopters of any new innovation or idea could be categorized as innovators (2.5%), early adopters (13.5%), early majority (34%), late majority (34%) and laggards (16%), based on a bell curve. Each adopter’s willingness and ability to adopt an innovation would depend on their awareness, interest, evaluation, trial, and adoption.
Some of the characteristics of each category of adopter include:
- Innovators - venturesome, educated, multiple info sources, greater propensity to take risk
- Early adopters - social leaders, popular, educated
- Early majority - deliberate, many informal social contacts
- Late majority - skeptical, traditional, lower socio-economic status
- Laggards -neighbours and friends are main info sources, fear of debt
Rogers also proposed a five stage model for the diffusion of innovation:
- Knowledge - learning about the existence and function of the innovation
- Persuasion - becoming convinced of the value of the innovation
- Decision - committing to the adoption of the innovation
- Implementation - putting it to use
- Confirmation- the ultimate acceptance (or rejection) of the innovation”
The Adoption Curve looks like this:
Adoption for Customers & Employees
Swap “service program” with “innovation” and we’re talking about facility contractors. Whether to get customers to adopt (select) contractors, or get employees to do something differently.
It’s the Adoption Curve, and it can be used as a guide for selling and marketing change - both inside and out.
It also shows us the relative population of any group, whether it’s customers’ decision-making teams, or our own employees. Those percentages provide a rough ballpark.
How To Increase Adoption (Incomplete Version)
Of course this is a short list. It’s a little more complicated and you’ll have to flesh out your own specifics. Read Crossing the Chasm by Geoffrey Moore, although its for technology products, it can help.
Here’s a short take for facility services:
1) Identify your key customers (for a proposal it’s the decision making team, for employees it’s your key leaders)
2) Decide (guess) if they are innovator, early adopter, early majority, etc.
3) Identify where they get their info from. For example, innovators get info from blogs, white papers, and articles - the early majority rely heavily on references.
4) Create your messaging to appeal to their type:
- Innovator: “there are no proof points yet, speak to first-on-the-block, industry-changing, visionary aspects”
- Early Adopters: “point to innovators who have adopted, bring up risk-reward, & inevitability of coming change”
- Early Majority: “seek beachheads by pointing to reputable early adopters, speak to dangers of non-action”
- Late Majority: “point to proven track record, provide guarantees against failure”
- Laggards: “do you really want these?”
5) Get your adopter-specific message to your adopters in the manner they like (steps 3 & 4 above).
What are you doing to help your customers & employees adopt your changes?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: change, proposals, buying
June 14th, 2007
A local tree service made me think about the lifetime value of customers.
High winds and shallow-root hemlocks don’t go well together. After this winter’s storms we ended up with half a dozen 100-foot hemlocks lying around like matchsticks. Another six are tilting at crazy, dangerous angles. They needed to come down too.
There isn’t a shortage of tree services up here. Anyone with chainsaws and rented equipment are in business. Sounds like the service contracting business, doesn’t it?
So in comes John and his tree service. He was recommended by our builder. John doesn’t have a web site, or a brochure. He wears jeans and work boots. Exactly what you want from someone who’s going to cut, drag and chip tons of wood.
But John did a remarkable thing. He made a lifetime customer out of me. And I didn’t even feel it happening.
I wonder if he figured out the lifetime value (LTV) of my business. If he did, it would be the present value of all the profit he’d earn from me over a specified length of time. Would he then figure out how nice to be to me?
I don’t know if he was aware that keeping my business long-term is more profitable because he’s not spending money to get new business.
I don’t know what he thought. But here’s how I became a lifetime customer.
You Knew What He Wanted By His Attitude
From the first time we spoke, I could tell he wanted to do all our tree work. But he never came out and said it. Never.
You could just tell he wanted the work. All of it. Not just this one time. But the next, and the next. For years to come.
And these jobs don’t come up often. Only once, maybe twice a year at best. But John made it clear he wanted to be the one doing them for me.
To me, that means he didn’t see it just as a single transaction. He saw it for the long-term, as a relationship. To John, business is personal.
Honestly, what a concept! One that’s seemingly lost the bigger the spend. The more self-important we feel.
A Fair Deal for Both
One of the things he did say, and several times, was he wanted us both to get what we wanted. A fair deal for both. He made it clear he understood exactly what I wanted and reassured me I’d get it. And I believed him.
Listening
John listened to what we wanted. Spoke to me as if I have a brain (I do). Recommended what he thought should be done. Then did what I wanted.
Well isn’t that what all sellers are supposed to do? Listen to customers. But how well do we do it?
Doing a Little Extra
John did some extra backhoe work and didn’t bill me - nice. But it was less than an hour’s worth. So, he paid a little of his time. But it wasn’t a lot.
I don’t think this by itself made me into a lifetime customer. But how much did it contribute?
Nice Guy
Yes, John’s a nice, personable guy. You like him the first time you meet him. But I’ve met lot’s of personable business people. And I don’t give all my business they can do to them. So why with John?
This is what John didn’t do
- He didn’t throw discount pricing at me
- He didn’t offer a referral fee for sending new customers his way
- He never asked me to be his “alliance partner”
There wasn’t any formal selling or marketing. It was business to consumer selling. Still, there wasn’t any contrived negotiations or offerings. It was what it was.
The simplicity and straightforwardness of it made me wish more buying situations were like this. I’d happily create more long-term relationships with others if it would be like this.
How Did I Become a Lifetime Customer?
I’m still trying to figure out how John did it.
The only thing that stands out in my mind was his recognition, right from the beginning, that this was a long-term relationship. Everything he said and did was as if he knew he’d be working with me forever.
How Do You Make Lifetime Customers?
~~~~~~
Chris Arlen
President, Service Performance
Technorati: customer, lifetime value, service contracts
April 23rd, 2007
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