Is this a priority for your company?  It sounds simple enough that it just might fall off your list.  Here’s why we think that’s a big misstep.

I was having a great conversation recently with the guys at American Cycle & Fitness and the subject of name badges came up.  When customers give feedback, it seems logical that you’d want them to be able to identify employees by name – for better or for worse.

This is true, but it isn’t the main reason why you should look hard at having all employees wear name badges.

From retailers to restaurant operators, we find that a big part of the reason a customer chooses to come back has to do with the connection that person make with your staff.  You want your crew asking good questions, giving good answers and leaving customers feeling like they’ve really made a find – and established a connection.

What we don’t want is for your customer to feel uncomfortable about coming back for any reason.  Not knowing or remembering your employee’s name after a helpful encounter can do that.  Think about it.  If you saw somebody at a party whom you had met and spent 20 minutes talking to last week, but whose name you had forgotten, would your first reflex be walking right over to talk?  No way.

Ironically, if your staff is really on their feet they could make this feeling worse by thanking the customer personally on the way out the door, since Mr. Customer’s name appears on the credit card.  Now we’re smiling and addressing you by name but you don’t know or remember ours.

Name badges can be done in a ways that are suitable for almost any business.  Because they’re a great way to remove barriers to building and keeping retail customer relationships, we think they deserve a spot on your priority list.

PS.  One terrific example I’ve seen of a company using the name badge as ice breaker: Employees picked their dorkiest childhood photo and it got laminated together with their name badge on a lanyard.  Love it! 

Think grandma got left behind in the digital revolution?  Think again.

We frequently get asked whether or not seniors really use the web.  This question often comes from clients who want to ensure that their web-based feedback systems provide an accurate picture of how they serve their customers.

While we think that our clients get a sufficiently full view of how their teams serve customers even in the absence of quite as much feedback from their senior customers as their younger customers, we have to admit that there is a good point to be made:  What constitutes “good service” for a senior can be different from someone of younger years.

There have been a number of studies we’ve looked to over the years to fill in this information, but this year’s publication from the Pew Internet & American Life Project really does an outstanding job.  The study is available here, and it’s a fairly quick read.

The big take-away for me was not only that internet usage has been relatively even across most ages below 70, but that it’s rapidly becoming even more level at ages over 70.  In fact, grandma and grandpa made the biggest surge in internet usage of any of us.  In between 2005 and 2008, the percentage of Americans between the ages of 70-75 who use the internet made the biggest increase of any of us, going from 26% to 45%.

It’s even more exciting when you realize that this rapid acceleration has almost certainly continued over 2009.  (Maybe it’s time to start streaming those Matlock reruns?)

Customerville was created for busy front-line managers…by a busy front-line manager.

This is the second of a two-part post.  You can read part 1 here.

As I wrote last week, my wife and business partner, Beth Gonzales-Israel, and I were the proud owners of several local Gymboree Play & Music franchises.  Growth was exhilarating, but we quickly had to face facts:  Our success depended on an extremely high level of service, and we simply couldn’t be everywhere at once.

Fresh from the success of our mail-in guest experience survey, we decided to build the customer feedback system which we had been unable to find offered elsewhere.  On a flight back to Seattle one night, I drafted what I thought would be the perfect system – simple, elegant and effective – on the back of a barf bag.  I hired a programmer and within a few months we had our first functioning version of the software.

The system worked wonderfully. Customers loved sharing their thoughts; employees loved having a live scorecard of how they were doing and how their grades compared to their sister locations.  And before long, we could see a couple of very important lessons.

Grades predicted sales. The first was that the quality of the grades was a very good predictor of the quality of sales.  This makes intuitive sense, of course, but it took seeing our own grades to really understand that customers who give you perfect scores tend to stick with you – and to bring their friends in with them.  That’s free business!

People like to do well. The second lesson was equally important.  It turned out that, if we just showed the grades to the employees, all the grades tended to get better.  Simple.  Your employees are perfectly smart people, and they want to do well.  We just need to give them some objective feedback on which they can hang their hat.  Simply sharing the grades each week – along with benchmark grades based on our other locations – caused the grades to go up.

It wasn’t long before other Gymboree franchisees far and wide had heard about our system and asked to use it as well.  Not too long after that, our phone began to ring with calls from other companies who had heard about us and wanted to know if we’d share.

Beth got sick of my babbling. Nobody’s sure exactly how it happened, but I think Beth just got tired of hearing me talk all the time about how jazzed I was (and am) about the idea of live customer feedback and how I couldn’t believe more companies weren’t using it.  At some point, though, she’d had just about enough of it and kicked me out of the Gymboree business office so that I could set about building Customerville.

The years have brought us remarkable success.  Today, organizations on three continents covering thousands of locations and several languages listen to their customers and share that feedback with their teams using our platform.  I have the privilege of working with dynamic colleagues around the world and I spend my days working with all sorts of exciting companies.

And though our software has evolved into an industry-leading platform, it still has one important thing in common with the product I drew on the back of that Alaska Airlines airsickness bag all those years ago:  Customerville will always fundamentally be a tool designed for front-line managers, by a front-line manager. 

It’s no surprise that front-line managers love Customerville.  After all, the company was founded by one.   Here’s the story.

Back in 2001, things were pretty hectic around my house.  My wife, Beth, and I had two young kids – ages 3 and 2 – and we were pregnant with our third.  Beth’s regular visits to our fabulous neighborhood Gymboree Play & Music Center was the lynchpin of her weekly schedule.  The kids loved the interactive play and music classes, and Beth relished the grown-up time with the other moms.

So you can imagine her response when the franchise owners announced that they were going out of business and closing the doors.  Beth got very quiet – the dangerous kind which instantly puts any husband on high alert – and suggested that we might think about buying it.

The classes were awesome, but the business wasn’t well run.  We bought the business and our turnaround efforts met with big success.  We were thrilled, and within a year Beth and I had made arrangements to purchase the other local Gymborees.

And that’s where things got complex. Running one location was easy.  Though Beth and I never taught classes, we were always around and the customers knew us.  If something wasn’t quite right, they’d take us aside and politely tell us what needed to change.

But, as any regional manager will tell you, once we had multiple stores it was a lot harder.  Those were our names on the lease, and our money going into building out the locations.  We were responsible.  Problem was, we weren’t the people in front of all those customers every day.  That vital role is played by an hourly employee – usually a very talented young person with plenty of energy but a lot less experience.

So we devised a means of asking our customers to share their feedback on the things we deemed most vital to our success as a business.  It was pretty high tech.  We created paper guest experience surveys, stuck stamps on them and left them out for customers to take home and mail to us.

We couldn’t believe how many of the cards came back in! Every day the mailman handed me a big stack of those yellow cards.  Week in and week out, customers wanted to share their feedback.  It was fantastic, but getting the results tabulated was slow and cumbersome.  Worse, by the time we got the information into the hands of our employees, it was old.

Now that we knew what we wanted, our next step was to go online and see if we couldn’t find a tool to automate this process.  How hard could that be?  As it happened, it was very hard.  Then (and now), the solutions available were overly complex, over built and overly expensive.

There was only one thing to do: We needed to hire a programmer and build it for ourselves.

Next Week: A product is born…sketched on the back of an Alaska Airlines a barf bag. 

 “…We were visiting with a multi-unit retailer recently and figured out with them on the white board that simply saving one customer per store per year would pay for their entire Customerville implementation.”

We’ve met a lot of new companies over the summer, both in the US and in Europe.  And, as you’d expect from these types of first-time meetings, one of the early questions we get asked is “What’s the ROI on measuring the customer experience?”  There are really two ways to calculate this – the hard way, and the easy way.

Here’s the easy way. Look at ROI by understanding the value of lost customers – those who report a very bad experience which has them headed for the exits.  To do this, simply calculate your average annual customer value, and then multiply by the number of customers per year you think each location loses due to the kind of service failures that result in a compliant.

Don’t know how many you lose each year?  Just make a guess.  Fact is, even your lowest guess will likely amount to less money than it costs to start measuring and sharing your customer grades, whether you do it with us or through another means.

One Lost Customer. We were visiting with a multi-unit retailer recently and figured out with them on their white board that simply saving one customer per store per year would pay for their entire annual Customerville license.  Now that’s ROI.

Why is this method such a quick way to establish an extremely powerful ROI on measuring customer experience?  Because, as we’ve found in virtually every implementation we’ve ever done, sharing live feedback about bad customer experiences with the right people and in the right way provides a dramatic reduction in the number of reported poor experiences.  Simply put, you’ve closed a vital feedback loop between customer and employee.

Take a look at this chart. It’s a 10-store district in their first year of measuring and sharing their customer grades.  In their first month they had 14 red flags.  Remember, these are customers you’d usually expect to defect.  (Because we have their contact information, our client was able to call and save many of these customers before they defected.)

But look at how the number of red flags per month just drops line a stone!  By July and August, these guys are at zero red flags for the entire district!  Now they rumble along at one or two per month for the whole district.

There’s no magic at work here – just the simple power of sharing candid feedback about when things go wrong directly with employees.

“…Your customers are people, and people want more communication during times of change, not less.”

Over the past year we’ve worked with our share of companies going through some tough times, and at times that has meant helping them with the tough job of closing some of their locations.   We’ve learned a lot watching some very talented people manage this incredibly difficult change in their companies.   A few lessons:

You’re closing a location, not the market. Your customers are people, and people want more communication during times of change, not less.

Make an extra effort to include in your messaging not just that you’re closing and that you’d love to see your customers at your location down the street, but also that you’d love to hear their thoughts on the changes taking place.  You’ll be surprised at the things you’ll hear.

Set the story straight – from the start.  Responding to customer feedback in the weeks before and after a store closes (we continue accepting feedback about a location even weeks after it’s closed) is vital.   Even more important, however, is to reach back into your database of customer contact information – including all the contact information received on Customerville – and set the story straight from the start about why you’re closing.  How well you manage closing will reflect on your brand elsewhere.  (In some cases it’s not practical to announce the closing ahead of time.  In that case, be prepared on the day of the closure.)  It’s extremely important that customers understand that your brand remains vital and healthy, even though that particular location didn’t work out.  Drop me an email if you’d like some best practices.

Be a class act even when it’s rough. Sooner or later, every company is faced with closing a location and bidding farewell to hardworking associates who can’t be placed elsewhere in the organization.  Here’s a great idea for district field management we’d love to pass along.

Take a little time to quickly scan back through customer comments, print off Customer-grams mentioning the departing employee by name and give the comments to the departing crew members.

Presenting these to those team members who have lost their jobs provides a needed lift when their spirits are down.  It shows them that you’re on their side even though your job means closing their location and provides that employee with something like a reference letter on steroids.  And in today’s economy, this is just the type of recognition that will help your crew land on their feet.  And a reputation for managing this process conscientiously won’t hurt you in the future the next time you’re hiring. 

This weekend we indulged in one of our guilty pleasures: Picking up our monthly copy of Monocle Magazine, an 11-Euro, impossibly hip book covering the who’s-who and what’s what in retail, design, food and travel around the world.

This month’s book includes a special supplement which examines a series of retail experts’ views on the future of consumer habits around the world.

Of note: Sagra Maceira de Rosen, a director at Reig Capital Group, sees companies re-inventing how they sell by leveraging smaller store footprints and even pop-up stores. She also sees retailers pushing the boundaries by locating away from traditional mall locations, and clustering in hip areas that offer a grassroots feel…without the exorbitant occupancy costs of malls.

Hiroshi Kubo, creative director at Beams, believes their future success is dependent constant and deep conversations with their front-line store teams, who are even tapped to pitch product ideas based on responses they see daily from customers. To Kubo’s comments, Monocle adds “Japan has a whole cast of retailers who believe the future is about impeccable service and great product.” 

Your database of customers who have given feedback is a vital tool for telling your own story.

Last weekend I joined Mike Olson, president of Trek Bicycle Super Stores of San Diego, for a beautiful bike ride up the coast and into the hills around his home town. At least I think it was beautiful. I spent the whole time looking down at the bars of the fabulously fast Trek Madone he lent me trying to keep up with that guy!

Partway through the ride, Mike tossed out a fabulous idea that we’d love to share with you. Over the coming weeks, we’ll look at how this can be put to use in your organization, too.

Recent years have seen the rise of consumer feedback sites such asYelp!, which combine a social media platform with consumer reviews. Unlike Customerville, which is a conversation between you and your customers, these sites provide a forum for individual consumers to shout from the rooftops to the public those things they love about you. Unfortunately, they also provide a pretty tall soap box when somebody’s unhappy with you.

Business operators have long complained that sites such as Yelp! aren’t fair, in that they seem to provide an outsized voice of complainers. This is serious business, since too many poor reviews can send customers past your door and to your competitors’. Your brand’s story is your responsibility, and it’s vital that you have a big seat at the table in how you tell it.

Which brings us back to our ride with Olson. His idea is to leverage the feedback Trek Superstores gets from its customers via Customerville as a powerful way to be sure his story is being told on sites like Yelp!, too. Here are some pages out of the playbook.

Reach out to say hello. First, take some time to reach out to customers who have given feedback and establish a connection between you and them. This can be a quick, personalized email that says “Hey, thanks for the feedback you gave us recently. That’s really important information, and I appreciate it.” Follow up with something nice, such as a free pass to an event, or a complimentary visit or product – you get the idea.

Ask for their help. Follow up some time later by sending another personal note – this time asking for their help. Be transparent. Explain that you’re thrilled that they had a great experience, but that – ya know – all too often good news like theirs doesn’t seem to make into the public forum. “If you have a moment free”, you might write, “I’d really appreciate it if you could share your comments on the local Yelp! site. Here’s a link.”

Ask the right people. The real power of this approach is that you’re asking people who you already know had a great experience to share it. You can approach this in a number of ways. One way is to cherry pick amazing stories. Save these to your personal bulletin board and then use that as your contact list. If you’re working with a large organization where that’s not practical, you might choose only people who gave you all 5’s, or perfect scores on “recommend to a friend”.

Having a living database of customer feedback is a valuable asset. You already have some terrific data on who has expressed a willingness to put their own credibility on the line by recommending you. Mike Olson’s idea let’s you help them do that! 

 Three cheers for Esteban Kolsky’s blog and, in particular, for his excellent piece of a couple of weeks ago called Three Secrets of Effective Listening. Definitely add this gem to your reading list if it’s not already on it.

Kolsky has his finger on the pulse of CEM, and in his recent post he highlights a failing in the evolution companies are making toward improved listening. In doing so he identifies a huge untapped opportunity.  Simply put, improving our customer experience requires us not only to listen but to respond. And, as a rule, the vast majority of companies aren’t doing so.

We’ve observed this for years with our own clients. They have a constant stream of feedback but often don’t allow the signals their customers send to change behaviors in ways which positively shape their customer experience.

Our answer to this has historically been twofold: First, we try to build software which minimizes barriers to front-line managers listening to customers, responding directly to them and – in turn – sharing these interactions with colleagues.

Second, we try to encourage companies who use Customerville to use the features. This isn’t always easy. Even in the best of businesses, front-line managers and their executive count parts are busy. The fact is, observing a stream of tactical information and making a strategic course changes based on that feedback is hard.

The big bombshell in Kolsky’s post is this: Only a tiny minority – around 10% — of companies actually respond to customer feedback. Think about the implications of that, both in terms of how our performance is squelched at present and, more importantly, in terms of the untapped potential. (Read the post, and the comments.)

Over the summer we’ll be talking with friends and colleagues about how we can all improve this vital last step. It promises to be a productive discussion.

The highlight of last week for me was a conference call with the managers of a small specialty retail chain. These stores (which are actually owned by a much larger corporation) are attempting to completely reinvent how business is done in their space.

I don’t know what tickles me more; The vigor with which these guys are approaching this mission or the fact that they’re acting like a scrappy start-up even though they’re a part of a billion dollar organization.

One thing I do know is that everyone on that team has their game face on. They’re trying new things and working really hard at dialing-in a formula for a successful new business. On this week’s call we heard energy, commitment and a little bit of swagger there I didn’t mind hearing at all.

Customerville has had the pleasure of working with this company to measure the customer experience in these exciting new stores. The reason for our call this week was to try and divine from their customer grades what’s working in their new store format and what is not.

Just a few minutes into the call we realized that there was something missing. These managers all knew what their grades were, but they didn’t know what they meant. Put another way, in an area of the business where they were receiving a 4 out of 5, for instance, they thought this was good.

What hadn’t been communicated to the guys on last week’s call was a clear definition of what a good grade really is. The fact is, anything below a 4.5 on a five-point scale is flat unacceptable.

The grades a company’s customers will give it are a very good predictor of sales growth. Companies which get nearly perfect grades on a consistent basis are highly likely to have strong same-store sales numbers. Conversely, companies with low grades tend to struggle to even make last year’s numbers. Their marketing dollars are wasted just replacing attrition, rather than building the business.

The good news is that improvements on customer grades over about a 4.5 tend to have a magnifying effect on sales. These organizations create loyal customers who return consistently and bring their friends with them. Any company’s objective should be to measure their performance on the things that count and not quit until they’re in the high 4’s on a five-point scale.

Once the guys on the call all clearly understood that their goal was to get grades of 4.5 or better — and why this was important — everything changed. They’ll carry this understanding into the coming weeks by using this knowledge to fire up their own store teams to perform with customers in a way that really moves the needle. We look forward to seeing those sales follow.