Friday, February 29, 2008

Marketing Musings: Ticking Your Way to Millions

Back in Week 48 I talked about the power of systems and how simple checklists for each and every task in your business can help tremendously with the entire service or product delivery process. This month in Fast Company Magazine, the authors of Made to Stick highlight some amazing benefits of a simple checklist - here's an excerpt:

The holy grail of checklists may be the one created by Dr. Peter Pronovost of the Johns Hopkins University School of Medicine. Intensive-care units (ICUs) often use intravenous lines to deliver medication, and these lines can become infected, causing nasty health complications. Pronovost, frustrated by these preventable events, compiled a five-step checklist.

The checklist contained straightforward advice: Doctors should wash their hands before inserting an IV, a patient's skin should be cleaned with antiseptic at the point of insertion, and so forth. There was no new science and nothing controversial--only the results were surprising.

When Michigan ICUs put the checklist into practice over a period of 18 months, line infections were virtually eliminated, saving the hospitals an estimated $175 million, because they no longer had to treat the associated complications. Oh, and it saved about 1,500 lives.

Amazing right? Simple right? The same Dr Provonost goes on to say:

People fear checklists because they see them as dehumanizing. Maybe that's because people associate them with the exhaustive lists that let random teenagers successfully run fast-food chains. They think if something is simple enough to be broken down into discrete steps, a monkey can do it. Well, if that's true, grab a pilot's checklist, and try your luck with a 767.

Then warns:

Even if you're sold on the value, beware checklist creep. A checklist doesn't mean huge binders full of obsessive and likely counterproductive ISO 9000-style process documentation. As Pronovost says, "One mistake I've seen in health care is that people will produce these 200-page process guidelines that nobody ever reads." You're not trying to create a high-resolution photograph of the status quo. In fact, if the status quo worked perfectly, you wouldn't need a checklist, you'd need a bonus.

Checklists simply make big screwups less likely. "We wanted people to standardize on the mission-critical elements--the areas where we have the strongest evidence," Pronovost says. "And these things that are mission critical, we've got to do them every time."

Where could your business benefit from a checklist?

Thursday, February 21, 2008

Marketing Musings: Apples 5-Star Retailing

Ron Johnson, the Senior VP of retail sales at Apple, recently talked to Associated Press about retail strategy. The strategy draws heavily from the workbook of luxury retail but also from other areas.

Key elements include the elimination of checkout stations which has created a less sales-oriented feeling (and counter-intuitively boosted sales), the introduction of the concierge service, and the store design, based on a library format, which aims to makes people feel like they belong.

“We try to pattern the feeling to a five-star hotel. It’s not about selling. It’s about creating a place where you belong.” — Ron Johnson

Wednesday, February 20, 2008

Marketing Musings: United, It's The Service Stupid

What are United Airlines missing these days? Nah, I don’t mean seats that actually have cushioning, food that you can eat (in First Class) or flights that are not cancelled, I am talking about hospitality. The raw basics of dealing with paying customers in a way that has proven over time to attract, retain and generally delight them. Now an enterprise as large as United is always going to make mistakes and have things just go plain wrong, but the way they deal with these problems has descended to a point where it is barely recognizable as customer service.
Turning again to Danny Meyer’s book Setting the Table, he gives us “Five A’s for Effectively Addressing Mistakes”. Let’s take a look:
  • Awareness – Many mistakes go unaddressed because no one is even aware they have happened. If you’re not aware, you’re nowhere.
  • Acknowledgement – “Our server had an accident, and we are going to prepare a new plate for you as quickly as possible:
  • Apology – “I am sorry this happened to you.” Alibis are not one fo the Five A’s. It is not appropriate or useful to make excuses (“We’re short staffed.”)
  • Action – “Please enjoy this for now. We’ll have your fresh order out in just a few minutes.” Say what you are going to do to make amends and follow through.
  • Additional Generosity – “Unless the mistake has something to do with slow timing, I would have my staff send out something additional…Some more serious mistakes warrant a complimentary dish or meal.

Now let’s run United “customer service” through the Five A’s:

  • Awareness – with fewer staff and an attitude of “you get what you pay for” most staff are not actively seeking to fulfill on a promise of hospitality. Doing the minimum has become the norm which means there are very few opportunities even discovered to delight customers.
  • Acknowledgement – following on from awareness, you can’t acknowledge what you don’t know about.
  • Apology – whilst canned apologies are the norm, excuses are rife. There is a reason behind everything but it is never a personal apology that customers receive.
  • Action – without any provisions, coupons for discounts on food, beverage or flights, or other “we messed up “ rewards United staff are simply not empowered to take any action. A broken seat? Sorry, there are no other spare seats and nothing else we can do for you.
  • Additional Generosity – unless it’s due to United overbooking a flight, I have not seen an act of outbound generosity in many years.
But United are still recovering from bankruptcy I hear you say…that is true and the organization itself is undergoing a massive shift. But when it is all said and done, customer service is what keeps people coming back and United need to hire a VP from Danny Meyer’s restaurant group before it’s all too late...

Friday, February 15, 2008

Marketing Musings: Setting the Table

A friend of mine just lent me a booked called Setting the Table by Danny Meyer. Danny is a successful restaurateur/entrepreneur in New York City who has been in business since the 80’s and now has over 10 highly successful hospitality businesses. What I liked best about Setting the Table was Danny’s approach to customer service – no excuses are tolerated for service that is not first class. In Week 39 I asked if it were possible to systematize employee behavior. Danny has moved on from this – the system is the culture in his group and through proper training, every employee understands what they need to do. This excerpt from the book illustrates the somewhat empowered environment and how at the same time, the business is present for every customer:

“Hospitality cannot flow from a monologue. I instruct my staff members to figure out whatever it takes to make guest feel and understand that we are in their corner. I don’t tell staff precisely what to do or say in every scenario, though I do have some pet peeves that I don’t ever want to hear in our dining rooms. I cringe when a waiter asks, “How is everything?” That’s an empty question that will get an empty response. Also, I can’t stand the use of we to mean you, as in “How are we doing so far?” I abhor the question, “Are you still working on the lamb?” If the guest has been working on the lamb, it probably wasn’t very tender or very good in the first place. And if a guest says “Thank you” for something, the waiter should not answer, “No problem.” Since when is it necessary to deny that delivering excellent service is a “problem”? A genuine “You’re welcome” is always the appropriate response.”

Setting the Table, Danny Meyer.