Einstein said it best…”Insanity is doing the same thing and expecting different results”.  If you take a close look at how most sales organizations are selling today you can confirm…it’s insanity.

Today the job of the salesperson is to create buying environments. No longer can salespeople focus on pushing their product; they must focus on the customer…the buyer.  Yes, the skills from sales training: opening, questioning, presenting and closing; are still the same. It’s the process and approach that have changed.

The internet has made the life of a salesperson easier is so many ways.  Understanding a potential customer has never been simpler.  Uncovering unique components of a client’s needs and business approaches allows salespeople who do their homework and focus on helping a customer buy stand out amongst the clutter.

And the real hook in today’s sales hospitality training is to ensure that salespeople are creating compelling customer buying environments.  The key ingredients are the art of staying curious, asking engaging questions and making it easy for the customer to buy.

In the past, questioning was a fact-finding mission and though the facts/features of the clients’ needs are important, they are a small part of the buying decision.  Questions that uncover real wants, desires and experiences are what matter most.  Smart questioning uncovers objections early and allows salespeople to position your hotel uniquely throughout the buying process.  This “stand out from the clutter” positioning is how a smart salesperson communicates your message and experiences through addressing customer needs specifically throughout each conversation.

Face it.  Today sales is just a customer focused conversation. Smart questions engage the customer into your world and allow you to identify and minimize objections throughout the process. Too often, salespeople are surprised by the decision of the customer and if a salesperson is doing more listening than talking they will hear what they are up against and how to move into the ideal customer pitch.

What is the ideal customer pitch?  It is answered in one way.  Did the customer say:  “…that is exactly what we are looking for.?”

Cliff Notes:

• Ask open-ended, feeling-finding questions and you will find out what your competition does not know.
• Stay curious.  The best customer question is one that is focused on the buyer, not your product.
• Bob and weave.  Take what your potential customer wants and desires and paint the picture that serves the vision they are looking for…one need at a time.
• Make it compelling.  Commoditization is insanity.  Stand out from the clutter.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and marketing consulting company positioning organizations to make more money through:

• Hospitality Training. Coaching Skills. Cultural Alignment. Team Building.
• Re-energizing Organizations. Strategic Planning. Sales & Marketing Consulting. Positioning. Branding.
• Customer Service Culture. Customer Service Training.
• Awakening the Passion within People & Organizations. Leadership Training.

To have Renie come speak to your team on how to tap into new markets and make more money please reach out at renie@aspiremarketing.com

“Don’t compromise yourself. You are all you’ve got.” Janis Joplin

It never amazes me how Starbucks has managed to continue to innovate in the world of coffee, even when discretionary income is at an all time low. They start with 2 cups of happy people, followed by an extra heap of sugar and before you know it you just paid $4.00 for a grande iced mocha no whip latte. Is this insane?

What are you really buying? The Starbucks Experience. It starts and ends with “keep it simple”. Their stores are clean, their well-trained customer service people are friendly and competent; and, they always seem to have what you want. Rarely have I heard them say they are out of a product they offer.

They have managed to create simple and easy to buy ancillary revenues so they can improve their capture of your wallet share. You can go in for a vente iced tea and out you come with your new, very cool looking iced tea container along with a fruit and cheese plate and small bag of nuts. That’s how you capture customer wallet share. And who in their right mind buys a small bag of nuts for $2.50? You have to be nuts!

And if this isn’t enough they have created such a strong community, you actually like to hang at Starbucks. It’s smart thinking, because the longer you are in the store the more money you inevitably spend. The result is they take individuals who like to “drink special coffee” into a community of people who hang out, work and even catch up with friends.

So what can we learn and apply in the hospitality industry or your business?

1. Keep training and keep the training simple so you get people competent fast. They make for happier employees and there aren’t as many mistakes.

2. Look at your product and find ways to solve customer problems and make travel easier. For example, how about an easy grab-and-go lunch sold upon check out and be sure to make the packaging convenient to stick in a brief case or purse.

3. Don’t run out of your specials or their special preferences. Find a way to give customers what they want and how they want it. If you can’t deliver on it, don’t promote it.

4. Create a central and interesting meeting place for customers to hang and become a community. How can your lobby or restaurant be a place to work, make friends and buy coffee, iced tea and snacks? Add free internet and people will work there, drink more coffee and buy more food. Think wallet share.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire Marketing, an international training and consulting company positioning organizations to achieve optimum performance. Contact Renie at 602.392.0700 or visit www.aspiremarketing.com.

It Happens with Small Strides

The more time I spend on this earth, the more I realize that it is the small strides that make the most difference. Many times we look for the big hits; those home runs that make the game “nail-biting exciting”. And yet for many people the need for home runs can set them back because the homers only come occasionally even for the best of home run hitters.

If you are waiting for the big hits, you will spend a lot of time wondering why you aren’t getting them which will set you up for more waiting, wondering and worrying. Negativity hurts small strides.

Think about it…

The best sales people understand that it is the daily target list planning; followed by their daily disciplined and varied contact approaches that builds their pipeline. I find it interesting that even those who are considered experts think that getting customers to buy happens in placing a few calls or leaving a few messages. The “no one calls me back” theme song seems to have made the top 10 list. It is a salesperson’s choice to work their never-ending target list along with ongoing and compelling approaches to staying in touch that builds customer rapport and gets customers to buy. Small strides add up.

Think about it…

The best leaders understand that it is through daily communication with their people that keeps the conversations flowing and real. It is not a monthly employee appreciation meeting or a fun, all-you-can-eat annual holiday party that synergizes people or gets performance to its best levels; it is the never ending efforts made each day by managers to engage, train and inspire employees which ultimately optimizes productivity and delivers results. Small strides add up.

Think about it…

The best customer service teams understand that truly caring about and listening to customers is the way to keep customers coming back and raving about you. It just isn’t that tricky and yet customer service levels are at an all time low. Managers who focus on coaching and training employees in a caring way understand that there are big dividends with this approach. Employees know that times are tough and working from the heart gets their heart’s beating. Small strides, just like heart beats, add up.

Think about it…

We all have more to do with less and top performers know that getting the right things done is what will allow them sustained success. They focus on what matters, make the right decisions effectively and look for what is working and what is not to establish what matters the most, next. Top performers have a process around getting the most important things done and they stick to the formula. They think strategically and move tactically never taking their eye off the ball (strategies). They understand that the right small strides add up.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to success even in difficult times. For more information on how to improve your management’s effectiveness contact Renie and Aspire Marketing at 602-392-0700.

Come Together…Right Now

It’s More Business Than You Think

Can you believe that we are rounding another year and look ahead to the start of a new one? Let’s have an amen for starting a new year! With this in mind, it is time to take a look around and consider how you will experience the journey over the next year. Life is never easy for the “naysayers” so how will you find the strength to get your team to come together?

Now for those who are thinking, “is she aware of the state of the economy, the reality of our industry and my issues with cash flow?” The answer is “count on it.” And to that I say, ”what you focus on comes true.” So how can you bring your team together and build a stronger team to start to get some traction and move forward against the odds?

Think Community. Now more than ever your people need to feel connected to something that gives them hope, and their Community, both the one they work in as well as the one they live in, needs your help.

Put your arms around local and national charities that your team can support through volunteer efforts and unique fund-raising opportunities. The payoffs are substantial for the mind and spirit and you will be able to help your internal Community come together and focus around something bigger than themselves and their own issues.

When we give, we receive and this feeling bonds people together, naturally creates teamwork and builds commitment as the feelings of contribution create pride in all of us.

Here are a few ways to build Community through Giving:

1. With your team, determine two-to-three charities that your internal Community feels connected to and emotional about. Let those involved be at any charity presentations where they share their mission and its impact.
2. Take a vote. Get everyone involved in the selection process and you will later see more people involved with the work and the spirit that giving brings.
3. Once you have made your selections, determine a few different leaders to head the charities’ internal representation. Be sure to have special recognition for those individuals leading these efforts via name tags so they get the recognition that paying it forward gives. Also, have recognition of each charity located around the hotel. This is important to keeping the spirit alive as well as getting guests to share in the spirit of caring. Guests will care that you care.
4. Get creative. How can you support this charity in a way that works for them and allows you to use internal soft dollars to make something important happen? This is the key as people start to get excited and this is the beginning of your buzz!
5. Work with your public relations, local media and the charity resources so you can share how you are supporting your community and get the recognition charitable work deserves.

Yes, now is the time for us to come together as we take this journey. Great leaders know that we must find the emotion for our people to focus and have a feeling that they are contributing as one Community. Let’s come together, right now.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to achieve optimum performance. Aspire provides innovative sales training, strategic marketing, leadership skills and cultural alignment for increasing revenues, growth in market share, a re-energized sales force and lasting changes in attitudes and outcome. Founded in 1995, Aspire has headquarters in Phoenix with a network of inspiring professionals across the country.

For more information on how to improve sales even in turbulent times visit www.aspiremarketing.com, e-mail Renie directly at renie@aspiremarketing.com or call Aspire at 602-392-0700.

Revenue Management continues to change rapidly.  The days of “right room, right person, right price at right time” have long disappeared. Keeping up with the latest trends and keeping staff well educated is increasingly expensive and difficult. Outsourcing a property’s Revenue Management has become a real and viable solution.

Today’s hotel guest is savvy, shopping around for the lowest-priced room. The average guest visits five Internet sites before they make their reservation. The playing field has evened out, creating a greater challenge for the Revenue Manager in how they manage inventory and rates. The ability to maintain parity becomes paramount in a successful Revenue Management strategy.

Revenue Managers also present challenges for a property. What is their role? What does their job consist of?  In the industry, most Revenue Managers really are Reservations Managers handling the duties of both jobs. This, of course, takes away their focus from both managing revenues and managing reservations. Not exactly a win-win situation.

Now, factor in the ability to compensate and retain a skilled Revenue Manager. While the concept of Revenue Management has been around for a while, the true discipline is less than 10 years old. Yield management of the past has given way to a truly more dynamic specialty. In major markets, an experienced Revenue Manager earns upwards of $60,000 plus incentives, with many approaching $100,000. And with such young, inexperienced managers, many are job hopping with ever-increasing offers. What makes them worth so much?  Studies show that a property with an effective full time Revenue Manager makes twice the profit than a property without one.

What is Revenue Management?

In order to see how outsourcing Revenue Management works, let’s first drill down on Revenue Management as a discipline.

Revenue Management is the mastery of the basic laws of economics: supply and demand and price and value. When these variables are optimized, Revenue Management performs at its best. There is a finite supply of rooms in a market at any given time. Some would maintain this is not the case, with more rooms being built and others going out of service. In tracking this trend we know that supply fluctuates over a larger period of time but demand is what wildly changes on a regular basis. Demand Forecasting is a skill that looks at trends and identifies demand by segment and time, marrying them to a strategy. Many properties see forecasting as an end to a means, when it should be a means to the end.

The second law of economics we need to touch on is price and value. Everything that has a price has some sort of value. In addition, any item that someone will pay for has a value. Effective Revenue Management analyzes that subjective point where price and value meet. When that “point” is discovered, the best price can be set to meet the needs of a specific buyer. This creates increased conversion and improved profitability.

On property Revenue Managers – even the best ones – often fail to look beyond their local market to make the best decisions for their property. Doing this takes time, effort and money. In outsourcing Revenue Management, a property can benefit from a “broader perspective” on current trends as well as aggregate data from a wider array of sources. This type of information creates a strong competitive advantage in any market.

Most often, outsourcing costs less than the average annual salary of a Revenue Manager and, most of all, it gives you access to a team of experts that is always looking at the big picture.

What about Revenue Management software?

Revenue Management software is the hot new thing. Many properties are buying into “new” technology solutions that claim to handle Revenue Management. In fact this type of software can only compliment the decisions made around revenue strategies. The price for these systems is often in excess of $100,000 not counting an additional $30,000 per year to maintain. And, since they are machines, they can only analyze the data given to them, which usually is limited to historical information. They don’t have the ability to examine or analyze other trends, markets or industry nuances.

Although technology can be great at making calculations, it simply won’t understand market intuition or dynamics. In fact, if you drill down to the key concepts of Revenue Management, a machine understands supply, but can’t grasp the dynamics of demand. A machine understands price, but never value. And, as we all know, a machine is still only as smart as its operator.  When investing in a Revenue Management software solution, remember to consider the cost and expertise of the person at the keyboard as well.

How to Outsource for a Revenue Management Solution

Giving up your rates and pricing strategy to a stranger goes against the grain of accepted industry standards. When selecting an outsourced Revenue Management solution, there are some key questions you will want to ask.

1)      Does the provider have access to my data?

• Can the systems download my data or is there a manual system in place that allows for back-up if necessary? An effective Outsourced Revenue Management solution will either directly interface, or connect through a dedicated terminal on site. In addition, there should be a manual system in place for back-up or in the case of inability to interface.

2)      Are the Revenue Managers experienced?

• How many years experience does the manager have and at what type of properties has he/she worked? An effective Outsourced Revenue Management solution should provide you work history of its analysts. The average should be 3-5 years, factoring the experience of the newer analysts with the directors’ experience.

3)      Are the Revenue Managers certified?

• What is the process of certifying the managers and do they have a continuing education requirement to maintain their positions? This is a key point of difference. Any good Outsourced Revenue Management solution should require their managers be certified and in an on-going education program.

4)      What are the guarantees?

• What will the return be on my investment and how long will that take? When inquiring about an Outsourced Revenue Management solution, inquire about the guarantee they are offering.  A minimum guarantee of a complete return on investment in the first year should be required.

5)      From how many markets do they pull data trends?

• What will give them the competitive edge in terms of data collection? An effective Outsourced Revenue Management solution should be able to tell you that they compile data from multiple areas and compare it to the local market.  The actual number is not as important as the fact that they use the broadest source of data possible. This is a case where more really is better.

6)      Do they look at more than just rooms?

• Rooms Revenue Management is only one piece. An effective Revenue Management solution needs to look beyond rooms and provide the option to  manage ancillary products as such as spa, golf, banquets For example.

7)      How do they measure success?

• Are they using the same metrics as your business does?  If you are looking to improve RevPAR, will they help you look at that? With rooms only being one piece of the puzzle, an effective solution will look beyond to benchmarks such as GOPPAR.

Is outsourcing Revenue Management right for my property?

Outsourcing Revenue Management is not for everyone. It is a big step to take and you will want to analyze both the cost and savings. Calculate what you are spending and what you receive in return. After doing all this, most properties reach the conclusion that outsourcing is both a cost-effective solution and an excellent way to leverage the talents of industry experts.  The days of Reservations Managers playing Revenue Managers are behind us. Outsourcing Revenue Management is a proven way to gain a strong competitive edge in the market and maximize your revenues.

To learn more about revenue management and optimization strategies, complete the form below or click on Phoenix marketing consulting firm Aspire Marketing.

By Juston Parker, King Pin of Revenue Management Evolution, Aspire  People.Performance.Profits, LLC

No one can help the person with a negative attitude

Well the reality has set in and it is time to get your community/team moving faster and smarter than ever. Hopefully you have mapped out the plan, involved those who will execute it in the process, identified who is responsible for what and by when, and determined your key success measurements. Now it is time to get the “mojo risin’“.

Frequently I am asked how I motivate employees and my community at Aspire. And the answer is simple: I can’t motivate anyone and neither can you.

Motivation comes from within, so as a manager you must help your people be inspired by the work and its contribution. You can inspire another person. If you don’t believe me, try this out. Next time you are at a store, engage a worker and ask them about their work. Ask them what inspires them? Ask them how they help other people? And ask them how they feel when they think about how their work contributes to others regardless of the job itself.

It is through the work that we can inspire people and they can find their motivation. It is through this connection that they feel the energy to be more productive, work smarter, listen better and contribute more purposefully. It is our work that gets us rocking and rolling. And it is our motivation that kicks us into overdrive and gets us excited.

As a leader and manager; parent or primary care-giver; owner or CEO; you must first begin with inspiration and help another person see how they are a part of something important and worthwhile in their life. Inspiration is the ability to shine the light on others and get their sense of self worth hooked in.

Watch for the pitfalls:

1. Never stop talking, engaging and connecting. People are feelers first. When they feel your sense of hope and possibility they will believe. If you don’t believe me take a look at our new President.

TIP: Find ways to acknowledge, recognize, find laughter, create fun times that connect with your people, and mostly never stop talking.

1. Now is not the time to cut training as there is nothing less self-motivating than not knowing how to do your job or how to do your job better than ever before. Failures are not motivating and if you think training is expensive, try the cost of low productivity and negative attitudes.

TIP: People want to succeed and without strong skills they will fail. Never stop training and coaching.

1. Find progress everywhere. With progress comes a sense of momentum and momentum is the fuel that builds success.

TIP: Look for incremental improvement in your customer service, client retention, sales prospecting and celebrate it. Get people feeling hopeful.

Getting our people’s “mojo risin’” has big pay offs from stimulating stronger results to optimizing potential in all aspects of your business.

Or you could just stay worried and in fear. The choice is yours.

Last month’s mood: Give

I was listening to: Come Together by The Beatles

This month’s mood: Inspire

I was listening to: LA Woman by The Doors

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to achieve optimum performance. Aspire provides innovative sales and customer service training, strategic marketing, leadership skills and cultural alignment for increasing revenues, growth in market share, a re-energized sales force and lasting changes in attitudes and outcome. Founded in 1995, Aspire has headquarters in Phoenix with a network of inspiring professionals across the country.

For more information on how to improve sales and leadership even in turbulent times talk with Renie directly at www.tipsonleadership.com . Check out Renie’s new book Official Girlfriends Getaway Guide.

“Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence.”
John Adams

Research makes it clear that a formidable plan and distinct culture encompassing customer service/care is critical to the life of an organization. Customer service affects every aspect of an operation including, and not limited to, customer satisfaction and loyalty, RevPAR, profitability, overall experience and asset value.

Source: White House Office of Consumer Affairs – Concerning unhappy guest

• 96% do not complain to anyone who can help them
• 90% with unresolved complaints will never return
• 60% with resolved complaints will return
• 95% will return if they feel their complaint was resolved quickly

This study reveals that:

• On average for each customer who was “wronged,” there are approximately 25 others who remained silent.
• On average each person in this silent majority will, by word of mouth, tell between 8 and 16 people – an average of 12 – about their complaint. (Over 10% will tell more than 20 people)
• When you do the math, a potential 300 people can be influenced by just one negative situation.

The impact:

• Input your number of dissatisfied customers:
• Take this number of dissatisfied customers and multiply it by the silent majority who don’t speak out of “25″ equates to _________ potential dissatisfied customers.
• Take this total of dissatisfied customers and the 25 each ones tells and multiply times the 12 other people they will tell and potentially influence not to buy your product or service = ________
• Multiply times an estimated average daily rate of $______ which equates to the potential lost revenues of $_________.
• The research also indicates that if you make a sincere effort to remedy these complaints and regain customer’s good will quickly, 82-95% will stay with you. Based on this with a proactive process of customer service the recovered revenue would be $______. This is a key foundation of what has led competitive brands to offer the 100% guarantee which holds hotels accountable and motivates them to solicit and solve the problems quickly and proactively.
• In addition, this math only takes into consideration the 4% of guests actually complain. Consider the impact of the other 96 out of 100 who never complain.

Source: J.D. Power North America/D.K. Shifflet

• Two of highest rated consumer satisfaction evaluators in the hospitality industry are J.D. Powers and D.K. Shifflet. These consumer satisfaction evaluators give a brand insight into how they are performing and also let the consumer know what experience and value proposition they can expect.
• Research also indicates that the higher the level of customer service created the more value perceived. Consumers associate value with price. The higher the value the higher the price the customer is willing to pay. Price has a direct affect on RevPAR and overall profitability.
• J.D. Powers and D.K. Shifflet results affect the buying patterns of our customers.
• The hotels that ranked 1^st through 5^th on the J.D. Powers guest satisfaction study have either had intensive customer service initiatives that remain a priority or customer service is a brand foundational core value.

Source: Harvard University Survey & Business Review Research

Happy employees create happy customers and lowering turnover delivers both more revenues and higher profits

• Retaining 5% of your business is a huge financial advantage to your business. It can increase the profits from between 25 to 75 percent.
• The cost to replace a manager is estimated at $5000 in total. Unhappy employees leave and replacing them has a direct impact on profit.

Source: Executive White Paper – SITE Foundation (The importance of caring for the internal customer)

• Industry turnover rate hovers between 78.3 percent and 95.4 percent nationally as an average.
• Overall, higher levels of motivation and motivated performance translate into a 53 percent reduction in worker turnover.
• It will cost roughly 100% to 200% of a line level employee’s base salary to recruit and train the replacement.

Source: Why Guests Don’t Return – (U.S. News and World Report)

• 1% They die
• 3% This was a one time trip, or they were relocating and staying while doing so
• 5% Loyal to another hotel
• 9% Competition took them because they were stronger at the time for this guest
• 14% Product was not a match fore the guest
• 68% Attitude of indifference

Source: “The Service Profit Changing: How Leading Companies Link Profit & Growth to Loyalty, Satisfaction, and Value” by James Heskett, W. Earl Sasser, Jr. & Leonard A. Schlesinger

Service Profit Chain

• Leading global companies increasingly realize that their success or failure hinges on their ability to retain the best customers and create value around them.
• Costs imposed by dissatisfied customer are perhaps more important. The dissatisfied customer buys less over time, demands more service than a satisfied customer and has the power to dissuade potential customers from doing business with your company.
• Localized or property specific standards and practices around customer engagement may vary. The processes that lead to customer alignment and satisfaction need to be consistent on a global basis. It is important to understand the sales or buying cycle prior to beginning the measurement process.
• A team analyzed a company and obtained data from two quarters. The sales data for each individual company was linked to the satisfaction scores for the same company. The analysis of the relationship between customer satisfaction and quarterly sales growth indicated units with stronger satisfaction scores also had stronger sales growth. In fact, a 6 percent change in the proportion of customers who were highly satisfied was associated with a 5 percent change in profitability.
• The overall study results of several companies indicates a clear correlation between customer satisfaction and sales performance:

• The service profit chain puts the link between customer satisfaction and profit at the center of the model. This is the focus of Heskett, Sass and Schlesinger. The model connects customer satisfaction to several key organizational variables such as employee satisfaction and tenure, as well as financial performance. However, the key link is between customer satisfaction and profitability.
• Research demonstrated that a highly satisfied customer is six times more likely to re-purchase than a customer who is merely satisfied. This is a significant fact when applied to your business. It sounds easy, yet the statistical relationship between satisfaction and profitability can be obscured if proper and careful methodologies are not followed.
• Authors’ related conclusions:
  • The stronger the guest satisfaction, the stronger the sales growth.
  • This is imperative with short buying cycles like a hotel. Longer cycles take more time to impact guest satisfaction.
  • Satisfied customers stay customers.

Source: Customer Satisfaction and Profitability: The Link – 12-14-06

• Research demonstrated that a highly satisfied customer is six times more likely to re-purchase than a customer who is merely satisfied.
• Research found that there was a statistically significant relationship between customer satisfaction and profitability with satisfaction accounting for between 1 and 10 percent and 10 percent variance in the profitability.
• In fact, a 6 percent change in the proportion of customers who were highly satisfied was associated with a 5 percent change in profitability.
• Research of a major hotel-resort company communicated to all stakeholders its commitment to award-winning customer service through its “Five-Star” service. Employees received extensive training on how to provide superior service, and have their compensation and awards tied to satisfaction and meeting customer expectations. Shareholders saw this commitment as a key focus of the Chairman’s message in the annual report, and perhaps most significantly in the 20 percent increase in profitability the company recorded over a 3 year period.
• Train, motivate, and organize human resources to support the customer mission: leading companies build an organizational structure, capabilities and incentive systems to support a customer-centric strategy. Departmental cross training programs are popular in this area.

Source: Customer Care and Increased Profits – from the 1995 Customer Care and Profit White Paper

Heskett, James L., W. Earl Sasser, Jr. and Leonard A. Schlesinger (1997). “The Service Profit Changing: How Leading Companies Link Profit and Growth to Loyalty, Satisfaction, and Value,” The Free Press, New York.

• Firms that delivered better customer value than the competition grew and prospered. Firms that delivered worse customer value withered and died.

The Value Proposition Component

• Understanding what factors shape a customer’s value perception is important. But equally important is anticipating where a value proposition will be in two, three, or four years.
• Studies have shown that the best predictor of share of spend is the customer’s perception of value. The greater the customers’ perception of value, the greater the share of pocketbook that a firm will have.
• Good value leads to higher customer loyalty and retention. Good value leads to higher market share. Good value leads to reduced operating costs. Good value leads to more positive attitudes among both customers and employees. These improved performance measures then lead to improved profitability and better stock market performance.
• Delivering good value enhances market share by:
  • Enhancing sales and marketing effectiveness.
  • Customer turnover is normally highest among new customers, those who have dealt with a firm less than one year. By providing high value, a firm will retain a larger proportion of these new customers. This means fewer new customers have to be acquired to replace those who defect.
  • By delivering good value, the firm will lose fewer customers of any type.
• In some industries, value is the single best predictor of market share.

The Cost Reduction Component

• Firms that deliver high value typically have lower cost structures than their competitors. High value firms pay more attention to the customer; they listen better to what the customer says, and then they use the customer as the key driver for continuous process improvement.
  • For example, GTE Directories, a Baldrige Award winner, achieved annual cost reductions of 3.5 – 5% as it became more customer-focused.
• A second major reason for cost savings flows from a more stable customer base. Churning customers, adding new ones while old customers depart, is costly, and new customers are heavy users of customer service activities.
  • For example, Hewlett-Packard finds that over 70% of its millions of calls annually at its customer service center come from LaserJet printer owners who have purchased their printer within the past two months.

The Employee Component

• Employee attitudes and employee retention are higher at firms that deliver high value to their customers. In particular, the linkage between employee satisfaction and the customers’ perceptions of service quality are strong and positive. Positive, enthusiastic employees build positive relationships with customers. Disgruntled employees convey negativism both directly and indirectly. The employee-customer relationship is directly influenced by employee attitudes.
• Satisfied employees are willing to suggest ways of innovating and improving an organization. Disgruntled employees are often cynical about changes and are usually not willing to improve. The result is that intra-organizational communication, trust, and employee satisfaction are strongly related to innovation and continuous improvement.

The Complaint Component

• The customer is truly the ultimate judge of quality. But a customer satisfaction program alone is often insufficient. We must proactively develop relationships with our key customers to learn their future needs, where they will be in one or two years. Since few organizations are perfect, we must develop customer complaint handling systems that transform disgruntled customers into satisfied, loyal customers. And for those cases when a firm loses a customer, we must be able to pinpoint exactly why the customer departed and use the situation as a learning experience. For a firm to be truly customer driven, all elements must be harmonized and focused on the customer.

The Profit Component

• Firms that deliver high customer value, relative to the competitors in their industry, are more profitable. They grow faster and have higher profit margins.
  • The American Customer Satisfaction Index surveys several hundred firms across numerous industries. Their research shows that firms delivering high customer value are consistently more profitable than firms with lower value perceptions.
  • The PIMS studies (Profit Impact of Market Strategies) involve thousands of firms and over five thousand business units. The primary goal of the PIMS studies is to determine which factors drive profitability in a business unit. Though not traditionally measuring value, the PIMS studies found the market perceived quality (how customers viewed product and service quality relative to the competition) was the single best predictor of market share which in turn lead to higher return on investment.

Source: Customer Satisfaction Profit Report

Customer-centric organizations can deliver satisfaction improvements effectively by following four principles:

1. Drive customer focus into business and strategic objectives: leading companies make customer focus a key element of the company’s overall strategy to differentiate themselves from competitors. Satisfaction becomes a primary theme for top management in communications with broad range of stakeholders. Putting the customer first becomes part of the corporate positioning and differentiation in the market. Senior managers spend a significant amount of time personally driving and preaching the doctrine of satisfying their most valuable customers.
2. Re-design customer interactions and supporting processes to serve high-value customers: companies should redesign customers facing processes and systems based on their understanding of the priorities of hi-value customers. A leading hotel chain has established separate check-in procedures for business and leisure travelers to better focus on the distinct needs of each group.
3. Train, motivate, and organize human resources to support the customer mission: leading companies build an organizational structure, capabilities and incentive systems to support a customer-centric strategy. Departmental cross training programs are popular in this area.
4. Apply rigorous “end-to-end” measurement: leading companies constantly refine their understanding of customer economics and the drivers of satisfaction based on clear metrics. Continuously assessing customer satisfaction and soliciting feedback from customers to improve understanding of their needs is critical.

External Industry Guest Satisfaction Models

Source: Southwest Airlines

• SWA’s culture is strong because they are fanatically committed to a culture/cause resulting in low turn-over and highest customer service ratings in the industry.
• Culture is one of the most precious things in this company so they believe they must work harder at it than anything else. It encompasses beliefs, expectations, norms, rituals, communication patterns, symbols, heroes, and reward structures.
• Cornerstones are the foundation that define beliefs.
• Hiring practices – The company is religious about hiring the right people – people who fit into their culture first.
• Obsessive about top down demonstration of the culture.
• SWA believes employees come first.
• SWA is only interested (hires) in people who are motivated to help other people – this is at the core of their culture and customer service success.
• SWA has become a loving place to work because of the people who work there.
• Love is their cornerstone and it is defined as action-oriented, patience, kind, generous, courteous, affirming, compassionate, extends grace and forgiveness, doesn’t guarantee approval, is tough and gutsy, and embraces humility.

Source: Safeway

• Top down demonstration of culture is a must.
• Core values – sincerity, support, respect value, friendly.
• Employees are instructed to greet each guest and execute a five foot rule.
• Company hires undercover evaluators to ensure accountability.
• Escort guest to product.
• Anticipate guests’ needs.
• Sincerity.
• Employee first culture.
• Strategic direction and expectations about customer service standards are initiated from the company. Each store is empowered to determine the guidelines they will use to integrate these expectations. Tough on strategy, easy on tactics.

Source: Trader Joes

• It is about the culture not service training
• Focus is on hiring the right talent and then incorporating a fun work environment.
• Don’t have a manual – it is about being friendly and fun.
• Their strength is hiring people that match the customer experience they want to deliver and smart buyers.

Other Information

Rewards & Recognition

• Corporation spending on customer satisfaction exceeds $600 million dollars annually.
• Effective compensation systems must link to customer satisfaction and should integrate
  • What your customers expect
  • Integrate the customer satisfaction survey results
  • Clearly identify what factors should affect rewards
  • Balance customer satisfaction with employee productivity and return on investment (ROI)
  • Source: Inside Research
• Associate satisfaction with the job and positive environment/morale impact the likelihood of retention. According to McKinsey and Company, 65% of respondents in a study cited not “feeling valued” or “insufficient recognition or reward” for leaving previous employer
• Source: War for Talent, 2000
• “Recent studies conducted by the business Research Lab (Hauppauge, N.Y.) have shown that the correlation between the length of time people intend to stay with their current employers and “soft” factors – like recognition given for work well done or pride in the employer – is more statistically significant that the longevity/monetary reward correlation” (BCP Handbook). Praise and Recognition in the forms of notes, cards, or public presentation among teammates share the sense of accomplishment. This supports a culture that focused on employees to gain in the customer satisfaction game.
• According to a Wichita State University study, the top five NMR motivating techniques are:
  • Personally congratulating employees who do a good job;
  • Writing personal notes about good performance;
  • Using performance as the basis for promotion;
  • Publicly recognizing employees for good performance; and
  • Holding morale-building meetings to celebrate successes.
• Key to the Customer Service training is a blended approach to rewards and recognition

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to achieve optimum performance. For more information on how to improve your manager’s effectiveness and get more with the staff you have talk with Renie directly at www.tipsonleadership.com or call 602-392-0700 to sign up for coaching training.

This month’s mood: Stop Global Whining

I am listening to: “Turn the Beat Around” by Gerald & Pete Jackson. Best soundtrack-Gloria Estefan

Enough already. I have officially stopped watching the news…I just can’t take anymore negativity. It starts my day off hopeless and puts me to sleep in fear. Negativity won’t get us out of this mess and those who understand that will lead their teams to extraordinary victory.

There is no better time for you to build your internal community and gain momentum. Great innovation and success have come from hard times and now is the defining time for leaders to shine the light on how to get there.

So think about what you wish for in your life and you will likely know what is important to your people. Here are a few ways to turn the beat around and bring positivity into this world and work place you live in:

1. Look for what is right in others. We are all critical of ourselves and this habit makes us critical of others. Criticism doesn’t improve work productivity, encouragement does.
2. Stop telling and start coaching. People have the answers within them and when they build and contribute to the solutions you will never have to worry about low responsibility and lack of accountability issues again.
3. Make the tough decisions now. Those who are not buying into your plan will only slow up your progress and minimize your financial results. Let them go.
4. When you cut staff make sure you take the time to talk to the team directly affected and discuss how to rework the processes so that customer service/retention and other key measurement indicators are not impacted poorly.
5. Think. Prepare and then Move. At these times you are likely to find yourself in an endlessly reactive position. A reactive leadership style will create more chaos where you don’t want it and you can’t afford to have it. You will always get a better result when you think and prepare 1^st.
6. Get everyone selling. Make it every person’s mission. Talk about it endlessly. Find out what they think they can do. Follow up weekly. What you focus on comes true and driving sales is the only way out of the challenges you have long term.
7. We are all creators of our environment. If the talk around your offices is all negative, you can count on negative employee attitudes, poor service experiences, difficult customers and market share lose. Create posters for your offices and back of the house that offer inspiring thoughts. Ask others to offer their ideas around how to create more positive work environments.
8. If you do not have an incentive plan in place there is no better time. Focus on the measurements that make a difference to the work product the employee is delivering. For example, front desk should be about customer retention and survey scores, engineering about preventive maintenance standards and decreasing guest issues and so on.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to achieve optimum performance. For more information on how to improve your manager’s effectiveness and get more with the staff you have talk with Renie directly at www.tipsonleadership.com or call 602-392-0700 to sign up for coaching training.

Nobody Does it Better

Customer Retention means Market Share

This month’s mood: Where’s Customer Service?

I was listening to: “Nobody does it better” by Carly Simon

Customer retention is the most inexpensive way to ensure market share. The likelihood of your retaining a customer is a reflection of your minute-to-minute/interaction-to-interaction customer experience. Many leaders do not realize that customer satisfaction does not mean retention. Striving for “satisfaction” is not enough as satisfied customers are not loyal. Highly satisfied customers are 6 times more likely to buy again than “satisfied” customers; and it is at this point that your marketing and loyalty strategies have a chance of success. Otherwise, save your money!

So the challenge is: How can you deliver outstanding customer service when you have cut positions and wages and have more to do with less? Rethink everything!

During the holidays, I hosted 17 family members (my lobotomy is complete). The challenge of feeding, then cleaning up just so I could start the “feeding cycle” again was endless. I thought I was very organized, having planned out the meals, the shopping list, and even the clean up teams. And yet I found myself at my nearby Safeway so much that in the end the Manager approached me about applying for a job!

As a company, Aspire has been watching Safeway for the last 24 months. This was a company that had strategically committed to reinventing its stores inside and out. During my 17 trips in 12 days to Safeway, I observed some outstanding customer service and together with the renovated store look, my “it’s a mediocre grocery chain” perception turned around. Safeway has reinvented itself.

Here is what I learned:

Keep it Fresh. Provide Smart & Clever Offerings: They have a new salad bar, a much visually improved sandwich bar, a new pizza bar, and an expanded take home dinner section. They understand that today people have no time and want easy meal solutions for their lives. Understanding what your customer needs and providing it may not seem revolutionary and yet you don’t see it very often. In addition, all of these offerings are conveniently located at the front of the store so the on-the-go shopper can run in, and run out!

• POINT: Know who is buying and make it easy…really easy. Ask your team who are your customers, what do they want and how do we deliver it better for THEM? And if you are going to do what everyone else is doing, at least do it better and add a twist. As Einstein so graciously put it, you can not do the same things and expect different results! Think about it…if you have 4 less people at the front desk you have to think differently about the check-in and out process so it complements your manpower realities. Change it up.

Fanatical Helpful Service: Everyone from the Managers to the Stocking Clerks has been comprehensively re-trained at my Safeway. They know where things are located from the aisle to the location on the row (“2 thirds down the aisle on the right side”). They not only tell you where something is, they end with, “Would you like me to show you?” At one point, I had a personal shopper who just helped me spend more of my money. My simple milk run turned into a $129.00 purchase!

• POINT: Get your community fanatical about helping every customer. Do whatever it takes. Share with your people that a highly satisfied customer is 6 times more like to buy again versus a satisfied customer. Embrace the “make people happy” business or you will be out of business. Your must inspire everyone in your organization to make each guest “dizzy with happiness.” In today’s economic realities, satisfaction means you are losing market share.

Revitalize Your Look: My Safeway perspective was that the store was dingy, kind of clean and not visually appealing. Not any more. The aisles have a little more space and they are of different designs versus a bowling alley/traditional grocery store feel. The signage is clear throughout the aisle and the lighting is bright. The carts are organized and I love the hand sanitizer they offer by the shopping carts.

• POINT: No one has a large capital budget this year, so you have to get creative. First up…get rid of the clutter, add candles to your front desk, create an inviting smell in your lobby, revisit your music to create a feel, get a local artist to do an art gallery down a hallway, ditch the furniture pillows that look old and worn, have your chef, in whites, offer a taste of the evening special in the lobby, and touch the senses in every way. Ensure that everyone has a clean and pressed uniform, add your favorite hobby on your name badges to help create conversation and get everyone involved.

In the end, what you focus on comes true. Make a fanatical commitment to making each customer “dizzy with happiness” and then decide that no one will do it better!

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire, an international training and consulting company positioning organizations to achieve optimum performance. Aspire provides innovative sales and customer service training, strategic marketing, leadership skills and cultural alignment for increasing revenues, growth in market share, a re-energized sales force and lasting changes in attitudes and outcome. Founded in 1995, Aspire has headquarters in Phoenix with a network of inspiring professionals across the country.

For more information on how to improve sales and leadership even in turbulent times talk with Renie directly at Tips On Leadership . Check out Renie’s new book at The Official Girlfriends Getaway Guide.

Get on the Bus…Gus. Make a New Plan Stan…

20 Ways to Drive Your Lover (aka Market Share)

…even in a down economy

This month’s mood: Sales is the only road to improving market share…it’s an active sport!

I was listening to: 50 Ways to Leave Your Lover.

The song by Paul Simon says it best…just get on the bus, Gus…that is the sales bus!

I find it amazing that with the state of the economy as it is, many leaders are focusing on a strategy of hope. “If we cut enough and just ride through it we will make it out alive.”

For the record, hope is not a strategy; it’s a one way ticket to failure. Being hopeful is a state of mind that simulates positive energy. The real way out of your market share challenges is getting your sales machine moving and “hoping” that everyone else is stimulating the economy like you are.

This month we cut to the chase on how to drive sales in the next 90 days…find the 5 that make the most sense for you and start moving forward and get on the bus…Gus!

1. Change up your sales meeting now. Move it outside or to an interesting location, change the agenda and talk pipeline…what did you put in that is new, where is each deal in the pipeline and how can we move it to a close. For a list of sales meeting ideas, email Renie.
2. Look at your distribution channels. What places can you stimulate demand? Where are you not playing that would allow you to own your market niche? Talk to the channel managers directly. Get curious and be flexible. Today’s game has changed…have you?
3. It’s an oldie and still a goody…be sure that all channels have inventory and pricing for a minimum of 365 days out. Please do not roll your eyes! You would not believe how many denials are due to being in denial about inventory and rate management effectiveness.
4. Target your backyard – there is business within 5 to 20 miles of your front door. Open your eyes, look around and get assertive. Use the internet to search out who is doing what in your backyard. Build your team’s target list. Establish your approach and move.
5. Public works has money – what are they doing in your neighborhood and how can you support them from outside catering to training and lodging. Think about what they need and then figure out how to deliver it.
6. Pick up the phone. The only way to get someone to buy is to engage them. and that requires you to start a conversation. Use your networking events and current client referrals to expand your reach. Have your sales people take 90 minutes 3 times each week to only dial for dollars.
7. Everyone sells – so be sure that you are selling in your restaurant or breakfast room. Find out who is in there, why and how they heard about you. Who else do they know and how can you reach out. Rally your front desk. There are more leads walking by your front desk than you sales team can ever handle.
8. Keep your current customers dizzy with happiness. When they return be sure that they get VIP status and give them recognition, upgrades, etc. Better yet, get the General Manager to greet them and say thank you for coming back. Use a weekly reception as a vehicle to get to know clients and find out how to keep them for life. Never take a client for granted. It’s the easiest way to lose them.
9. Be sure you are contacting your top 100 to 150 clients 4 times per year and make it creative. Have the General Manager or top dog contact your top 100 clients at least once per year and get the calls in ASAP. Say thank you, ask for what else you can do and then ask who else you can invite.
10. Stand out from the clutter. Stop sending all the stuff that no one is reading and start sending something that emotionally moves someone to take action. People buy from people they like and like is an emotion. Touch their hearts.

Want more? To get 10 more ways to increase your sales call Aspire at 602-392-0700 and ask for the HMM Get on the Bus List or send an email to renie@aspiremarketing.com.

Renie Cavallari is CEO and Chief Inspirational Officer for Aspire- a Revenue Generation Company. For more information on how to improve sales and leadership even in turbulent times, talk with Renie directly leave a comment below. Check out Renie’s new book at Official Girlfriends Getaway Guide..