The Evolution of the Customer: The 1980s

Certainly, the future never arrives as planned but the wild innovations in our industry and changes in our world over the past 30 years have kept things very interesting. Let us take a ride in a time machine to explore the past!

The 1980s: The “Me” Decade

Housing a generation of status seekers, the 1980s was definitely a decade that embodied the ‘greed is good’ ideology. The ‘yuppie’ (Young Urban Professional) culture emerged. They were selfish and very materialistic. Corporate power was becoming more prevalent, and these up-and-comers wanted their piece of the action!

Technology

Technology had come a long way by the 1980s. Computers were becoming more common household items and not just business machines; they even started making an appearance in schools. In 1981, we launched the first space shuttle, Columbia. The cell phone came into being in the late 80s in big, bulky bags, and they were mostly relegated to business use.

Music

MTV revolutionized the world of music in the 80s. We saw the birth of the compact disc (CD). Pop, punk, new wave, rap, and hip-hop emerged or grew, in some cases exponentially, at various points. In 1985, Bruce Springsteen released his Born in the USA album. People were slam dancing and break dancing across floors everywhere. Milli Vanilli lip-synced their way to their 15 seconds of fame, and Michael Jackson’s Thriller became the best selling album of all time.

Fashion & Style

Teens were seen wearing tank tops, leg warmers, and tight fitting or torn jeans – thank you Flashdance! We loved everything big, bold, and brightly colored. Madonna’s leather and fishnet were as popular as Michael Jackson’s white glove and Donna Karan and Anne Klein designer attire.

Tennis shoes and shoulder pads – oh my!

Teased hair, two-toned eye shadow and glossy lipstick were the “it” look for women. Men pulled off a new business look with paisley or red power ties worn with fashionable suspenders or a silk vest.  And, yes, the 1980s saw the return of big hair – gels, waxes and mousses abounded – and people weren’t afraid to experiment. The net effect was a myriad of outrageous styles that were all about the VOLUME! There were headbands, ponytails, mohawks and crimping… and even the now-laughable mullet.

Film & Television

In the early 80s VCRs became a common household item. Popular movies included E.T. The Extra Terrestrial, Tootsie, Cocoon, Back to the Future, Fatal Attraction, and Driving Miss Daisy. Cable TV was invented, and the 80s quickly became known as the decade of the sitcom: The Cosby Show, Cheers, Roseanne, America’s Funniest Home Videos, Golden Girls, and The Wonder Years were favorites. Dallas, an evening serial drama, was one of the top television shows during the era.

Who shot J.R.?

Lifestyle

Consumers began their love affair with credit cards in the 80s; we borrowed and spent instead of saving for a rainy day. Aerobics, minivans, camcorders, and talk shows became a part of our lives! Popular phrases were:

If you’ve got it, flaunt it!  Shop ‘til you drop! and You can have it all!

The decade began with double-digit inflation, hospital costs rose, and we learned about and lost many to AIDS.  BUT, in the US we also saw the Constitution celebrate its 200th birthday, Gone with the Wind turn 50, and we gave $115,000,000,000 to charity in a single year (1989).

Apartment Industry

In 1980, apartments were a box with four walls and a small kitchen. A community laundry room was considered a great amenity. Communication between management and residents was verbal and most likely face to face. The apartment seeker of the 80s did not have a long list of requirements and amenities; even with many things becoming more sophisticated, for prospects it was simply, “Do you have a one bedroom on the second floor?” By the end of the 80s era, the Baby Boomer generation was moving out of the ‘singles and couples’ phase and into the parenting phase, while the smaller Generation X group was moving away from home for the first time.

Customer Service

In the 1980s we saw the development of database marketing, the precursor to CRM (Customer Relationship Management). Although helpful, information on existing databases tended to be unorganized, as well as hard to track, update and retrieve. But as our use of computer technology and email communication was on the rise, so was the incidence of computer-generated SPAM. No longer was it the simply the annoying call during dinner time, or stacks of junk clogging up our mail box, we began having to sift through undesired marketing materials in our email as well.

Highlights of the 1980s

• The US Hockey team defeated the Soviet Union in the Winter Olympics upset dubbed the “Miracle on Ice”
• Our country declared a “War on Drugs”
• Sandra Day O’Connor became the first woman appointed as a Supreme Court Justice
• The Vietnam Veterans Memorial was erected

And, as we came to the end of an era,

• US President Reagan demanded: “Mr. Gorbachev, tear down this wall!”

At the turn of the decade, many were happy to leave the 80s for the promise of a new way of life and ever-changing culture in the 1990s, but many truly thought (and some still believe):

The 80s were TOTALLY AWESOME!

*S*A*F*E* Leasing: EXECUTION

With Systems in place to monitor and measure on-site performance, a method to encourage and enforce Accountability, and a Focus on your goals… there has to be Execution.

SAFE – Systems * Accountability * Focus * Execution

SAFE Leasing is so named because its key concepts represent a style of leasing that is both effective and “good” for the leasing professional, the rental prospect and the owner. This comprehensive sales and leasing program puts more prospects into apartment homes!

Top companies create training programs and Systems that make leasing professionals accountable to specific lease production performance expectations. They use shopping report evaluations and other tools to create Accountability that provides feedback to the individual leasing consultant while spurring the on-site team to higher performance levels. The intense Focus is on the property goals and the owner’s objective of increasing the value of the asset. Yet, even the best strategic plans and well-designed systems are for naught without Execution.

Well-planned good intentions do not amount to any measurable difference unless they are executed!

This final aspect of SAFE leasing, the “E” in the word SAFE, is the most important. With no execution, even the greatest marketing and leasing plan cannot produce positive results! Execution implies that a leasing plan has been proven effective as measured by the final results. The means have justified the end! The leasing team has used well-designed Systems as their tools and has remained Focused on their goals. Periodic monitoring and feedback combined with ongoing training and coaching have kept the leasing professionals and their teammates Accountable to goals and objectives.

It sounds like one big party with everyone just pitching in!

WRONG!

If it were THAT easy, every company would be equally successful. Some make the mistake of thinking that once the marketing plan has been written and the team has been trained, the job is done. It has been said, “If you fail to plan, you should plan to fail!” There is some truth to this, but the best plan never implemented is simply a bad plan!

The ability to execute a plan comes from a combination of preparation and desire. Successful companies provide effective training, both formal and informal, along with a clear understanding of the corporate expectations and measurable goals. The team members are further motivated to properly execute through a system of rewards and penalties. Accountability in these top-performing companies is high, as team members are anxious to prove they are capable to achieve results! Successful Execution is easy to identify by improved shopping scores and MOST importantly, more leases!

 Execution is never an accident.

It happens because corporate leadership knows where they want to go. There is clarity of purpose and a common image of what success will look like. The right people are in place, prepared and motivated to reach their target. In leasing, that goal might mean a specific number of leases per month on an individual basis or it could be a targeted closing ratio over a set time period.

Whatever the situation, real Execution requires a defined, measurable goal that when reached will be easily identified.

Execution is knowing where you have to go and there being no question when you have arrived!

*S*A*F*E* Leasing: FOCUS

With Systems in place to monitor and measure on-site performance, and a method to encourage and enforce Accountability, you must now Focus on your goals.

SAFE – Systems * Accountability * Focus * Execution

SAFE Leasing is so named because its key concepts represent a style of leasing that is both effective and “good” for the leasing professional, the rental prospect and the owner. Systems allow the management company to monitor and measure on-site performance. This creates Accountability that provides feedback to the individual leasing consultant while spurring the on-site team to higher performance levels. Becoming Accountable to specific training, performance, and expectation, these Systems sharpens the team’s FOCUS helping them to concentrate intensely on the property goals and see clearly the owner’s priorities.

Systems           √

Accountability          √

Now… It’s all about FOCUS!

S*A*F*E Leasing Requires “FOCUS”

Focus is the discipline to concentrate your efforts, resources, and attention on a particular objective or goal. A company’s Focus becomes its primary area of concern and responsibility.  It should receive the company associates’ full enthusiasm, energy, and concentration. All successful management companies create training curriculum, promotions, mandates, and rewards that help their teams remain focused.

As part of the ongoing training initiative, companies may choose to Focus on identified ‘problem areas’ – seeking to correct one behavior at a time – in order to capitalize on the positive return from that simple change. But Focus STARTS in the initial training of on-site associates – something we refer to as Leasing 101.

Many organizations offer a “Leasing 101” type class which lays out basic principles of sales based on their corporate philosophy. It is best that new employees learn and understand company goals and priorities from day one. You cannot expect new employees to read your mind about what is most important to you as a company!

Planting the seed of Focus from the very beginning and nurturing it with ongoing reinforcement keeps your team members from losing sight of the goal even in the toughest conditions or rental markets. Even mistakes and disappointments of the past can be used as learning tools to reform Focus. Evaluating the current process in an ongoing fashion, makes it possible to affect change where needed to shift or regain Focus where it has gotten off track or been lost.

Set goals, communicate those goals, and focus on achieving them…it is as simple as that!

Heard of “Focus Factor”?

It’s a supplement regimen that claims to help users stay on track and better concentrate on important tasks.

If only the apartment industry had such a performance enhancer!

Your company and property goals should be in writing – simple and specific – for all team members to have in hand. More than a mission statement or company motto, your ‘focus factor’ should be a clear and sharp set of directives and measurable goals that each team member uses as a map for today’s activities and efforts.

Team Focus does have a long-term impact…but it is also a “right now” kind of compass that should reveal our immediate plan of action!

*S*A*F*E* Leasing: ACCOUNTABILITY

Once you have Systems in place to monitor and measure on-site performance, you must make on-site professionals responsible for meeting desired standards – that is Accountability.

SAFE – Systems * Accountability * Focus * Execution

Being Accountable to a measurable set of standards results in higher sales performance levels.

Leasing Requires Accountability

Accountability is the “insurance” used by top sales-performing companies. With well-designed Systems for sales/leasing employee selection and training, good performance is never merely assumed. Just as there is a follow-up system for your rental prospects, you should build into your accountability procedures a follow-up for leasing performance.

The mystery shop has long been held as the primary tool for measuring sales performance of on-site leasing personnel. So developing a routine that gets shopping reports immediately reviewed and forwarded to all parties including the person who was shopped is essential to the accountability process.

Accountability starts with giving the on-site leasing professional a full understanding of the company’s expectations. Employees are responsible to each other to perform to the best of their ability and in the best interest of the organization as a whole. Each person is accountable for her decisions and actions – or the lack thereof!

Accountability is critical to improving and growing any organization. Starting new employees with exposure to your training Systems sets them up for success. From the beginning, everyone knows the expectations and how to reach that standard of performance.  Because leasing is the ‘front line’ of the multifamily management industry, many companies focus intensely on the performance and production of their leasing associates.

Accountability – Consistency and Fairness

Clearly communicating leasing expectations is a fundamental objective. These expectations include the shopping score thresholds that the company considers “acceptable” for any leasing professional. Some organizations offer bonus incentives for consistent high scores, but at the same time there are consequences for failure to meet and maintain those standards. Managers or associates who might have earned bonus incentives for lead conversions may in turn forfeit those funds due to a low shopping report score in the same time period.

Many of the leading real estate management companies have a three-strike rule when it comes to shopping report performance. While the third strike may not always result in a termination, certainly there are actions taken to address the situation, redirect the associate or perhaps discuss with them whether sales is an appropriate career course.

Consequences for poor sales performance usually include re-training or counseling at the very least. Some companies utilize forums where seasoned leasing professionals who demonstrate consistent top performance share ideas and tips with those who recently received a less than satisfactory evaluation. These roundtable type events are designed to be fun, upbeat, and DYNAMIC!

Positive Reinforcement is Crucial to Accountability

Positive feedback and upbeat corrective actions are used to instill a sense of confidence. While meting out what might be seen as punishment to a low performer, providing encouragement as well is vital. Try to find something positive in even the weakest presentation!

Try to build on the positives!

 Aggressive pursuit of leasing excellence along with high shopping scores should never be confused with intimidation or bullying. When constructive criticism, established consequences and positive reinforcement for perceived strengths just aren’t cutting it – you simply have the wrong player in the position. At that point, you may be forced to rehire.

Set realistic expectations and appropriate rewards and the right person will hold themselves personally accountable. The real driver in accountability is the person’s individual desire to do a good job. They know that when they fail individually, they have personally let down their entire team… and their company.

 

Accountability and Rewards

Recognition for a job well done is one of the most important motivators to most employees. Top leasing professionals sometimes earn designations like “Superstar” or “Top Shop” and receive recognition in newsletters or other intercompany settings – maybe even on the company’s Facebook page!

Rewards can be monetary, merchandise, or even exclusive invitations to corporate events, special training for VIP sellers, and more. Recognition is a cornerstone of encouraging repeat high sales performance. In addition to incentive, some top sellers are recognized by having highlights from their actual shops printed in company publications or read at corporate meetings. This type of recognition also doubles as a learning tool for other team members as they hear and read the positive (and instructional) comments from the shoppers. Leasing accountability can be rewarded by a call from upper management to congratulate a leasing professional for a great shop or for a record number of lead conversions for a given timeframe.

Competition in Accountability

Accountability of leasing performance continues to heighten, as the responsibility for leasing excellence appears to be moving up the ranks! Rather than simply holding a training director or regional manager alone responsible, now upper management seems to be interested and involved in the constant monitoring of shopping report scores and performance evaluations because they, too, are ultimately held accountable.

 Accountability starts at the top! A little healthy competition is a good thing!

Some companies offer a trophy to the manager whose area sales performance outranks his peers. The trophy only stays with the manager as long as their team has the top scores. Some of the more common gauges used for accountability are average shopping score and average occupancy rate. This interesting competition melds shopping performance with actual property operations to produce a number that truly reflects leasing excellence.

Your Systems are only as good as the people who work them! Accountability means everyone has a stake in the overall success of the property. By showing that being accountable not only helps the company but also has its rewards, you can increase buy-in.

Better sales performance leads to higher occupancy rates and a greater ROI, which means everybody WINS!

*S*A*F*E* Leasing: SYSTEMS

The roller coaster ride that is the real estate market can sometimes get downright intimidating!

How can you be SAFE in this treacherous and competitive rental market?

SAFE – Systems · Accountability · Focus · Execution

You MUST have Systems in place to monitor and measure on-site performance. The old management saying is still true today: “If you can’t measure it, you can’t manage it!”

Systems that measure performance make on-site professionals responsible to desired standards and achievements.  We like to say it is better to lease SAFE than sorry!

Effective Systems are the foundation to SAFE sales and marketing. Systems allow companies to operate in a purposeful and calculated manner.

Training Systems

Leaders in sales performance use thoughtful and simple Systems to maintain superior sales skills and achieve leasing excellence. Some companies utilize Training Systems that hone not just sales skills but also professional and personal skills.  Some curriculum includes classes that encourage a balanced life.

Enthusiasm, conflict resolution, and a zest for life are skills that are as crucial as telephone techniques and overcoming resistance. If the leasing professional is happy with their job and content with life, the rental customer can see that in their presentation. A well rounded training program could well teach leasing professionals how to be the kind of person that others like to do business with!

While sales techniques are an integral part of your training curriculum, it’s also a good idea to integrate your corporate traditions into this process. If your on-site personnel have buy-in to their product and the company, the prospect will be able to see this. Their leasing presentation will have more energy and be more persuasive. However, it’s not all about the ‘warm fuzzies’!

The fact is that top performing companies in sales typically invest significantly in sophisticated and high caliber Training Systems which focus on a performance-oriented curriculum. They educate not only on-site leasing staff but also service technicians, bookkeepers, porters, and managers. They review corporate culture and general sales training, and they introduce the staff to the shopping report – the tool by which their performance will be measured.

Classroom training, mentoring, mirroring, one on one coaching, web-based training – companies utilize different platforms based on their needs and the return on their investment.

Recruiting Systems

The road to being an industry leading company starts with recruiting and hiring the best people. Some organizations express their commitment to finding quality people by employing a full time recruiting team who personally interviews all on-site candidates. Many times, best employee prospects come from the referrals of other quality on-site employees.

In employee selection, you must start with a core group of qualified and skilled managers – key players who become magnets to attract other quality on-site professionals to the team. Offering comps for referrals doesn’t hurt!

Personality and key characteristic profiling is another system or hiring tool used by top sales performers. They identify characteristics and traits that are common in proven sales people already on staff, and then they match leasing professional candidates to these identified “key” traits.

Systems simply for systems sake are not what we advocate.

Find what works best for you and go with it, but stick to your Systems!

Systems will help establish a SAFE leasing effort that puts more prospects into apartment homes.

Five Reasons for Mystery Shopping Your Apartment Properties

All companies believe in measuring and monitoring a property’s performance through the monthly financials. Doesn’t the same concept apply to the sales and leasing efforts of the on-site staff? Shouldn’t you know for sure how your rental prospects are treated? And shouldn’t you know how your on-site team presents your community?

Mystery shopping has been a staple practice of the apartment industry for more than 20 years and is a valuable tool for evaluating and training on-site leasing personnel. It is the practice of sending a specially trained individual “undercover” to an apartment community posing as a qualified and willing rental prospect. The shopper participates anonymously in the leasing presentation and then completes a written report evaluating the leasing professional’s sales skills and compliance to company and fair housing policies, plus an assessment of the community.

Without shopping, you may not be aware of lackluster leasing efforts or poor resident relations at one of your apartment communities, costing you money in lost leases, lower rent offers, and lost renewals.

With that much at stake, it is critical that you monitor leasing and resident relation activity to identify those on-site team members who may need encouragement, training, reprimand, or dismissal (if necessary).

Aside from money (and it’s hard to avoid that reason), here are five reasons why many of our customers use mystery shopping as a management and training tool.

1. Obligation to Owners/Investors to Maintain High Standards

All companies have the responsibility to owner/investors to maintain competent on-site leasing professionals. It’s all about accountability! An accurate and comprehensive shop provides documentation of leasing excellence on all of the communities a firm manages. In other words, the shopping report is proof that the company is committed to providing a strong sales and leasing effort.

2. Document Ongoing Portfolio-Wide Leasing Excellence

More and more management companies are under a high-degree of scrutiny from investors, asset managers, and advisory groups. They must show they can and are performing. Again the shopping reports verify a dedicated and competent leasing staff.

3. Monitor Performance and Training Efforts

Mystery shopping allows a company or property to measure ongoing performance. Not just “How are we doing?” but “How well are we improving?” The test of any training program is the measurable results of the personnel who are shopped. In other words, does shopping result in better leasing skills and effectiveness? Using shopping reports along with additional training and positive recognition, many companies have vastly increased their closing ratios and have put more people into apartments!

4. Troubleshooting and Identifying Potential Challenges

A mystery shop can uncover problems and challenges on-site such as curb appeal concerns, office environment issues (i.e. staff attitudes), as well as poor sales and personal skills. A shop can identify one who might actually be creating sizable losses in revenue due to their poor leasing and overall indifference toward prospects.

5. Training and Feedback

Perhaps the best way to look at a mystery shop is that it is the quintessential training tool. An on-site professional can go to seminars for years, read all kinds of sales books, and discuss the subject forever. But until he or she gets into the heat of the battle and receives a complete written evaluation of their “real” presentation, you don’t really know the level of their sales ability.

Each shop a person reads is like a mini-seminar on leasing. And if one’s company already has an effective training program, shopping will further enhance that ongoing training. If a company does not have the luxury of a trainer, then the shop will become one of the most important training tools! Good employees respond to their shop by addressing their weaknesses and improving their presentation.

It’s clear that mystery shops are a reasonable tool to help measure, monitor, and control potential revenue loss. There is just too much potential downside if you do not monitor the activity of your on-site personnel throughout your portfolio. Yet, more importantly, there is so much to be gained from shopping the on-site personnel – so much more that can positively impact the economics of a property.

Are you employing mystery shops on your properties? If so, how have they benefitted you? If you’re considering employing mystery shops, what’s holding you back? Share in the comments below.

The iMpact of Customer Loyalty

How Does Apple Do It?

 Now that you’ve discovered the sparkling gem known as customer loyalty and we have discussed asking the ‘Ultimate Question’ as a way to determine how loyal your customer base is currently, let’s look at how one company has put this concept into practice and wins over customer after customer – continuing to boost profits and market share year after year in the tight competitive market of consumer technology products.

 Yes, you guessed it! Whenever there is a new multimedia “anything” nowadays, it seems there is an iThing!

And consumers clamor for the brand and can’t stop talking about how much they love it!!  Isn’t that our dream?

Some think Apple has a “secret” – well, they do but it’s not like the recipe for the Colonel’s famous Kentucky Fried Chicken or anything. It’s spelled out in everything Apple does in their daily business practices.

Call them Mac Loyalists, MacHeads, or just plain zealots, Apple’s vocal customer following is one of the most loyal out there. Its customers will defend the company and its products tooth and nail every time.

Why are they so passionate?

The simple truth: Apple’s attention to detail, their commitment to giving customers the products they want, and their consummate, personal customer service all work together to create customers who are simply delighted with everything Apple.

In 2006, Satmetrix Systems ranked Apple as the computer company with the highest customer loyalty. Satmetrix sought to discover how likely customers were to recommend the company to a friend or colleague, comparing the likes of Compaq, Dell, Gateway, IBM and others with Apple. Said Dr. Laura Brooks, then vice president of research and business consulting at Satmetrix: “Apple, whose score far outranks its closest competitor, is well known for its passionate and dedicated customer base.”^† That same year, a Harris Poll of “best brands” put Apple in the top 10 for the first time. Apple’s successful branding finds it in the company of Coca-Cola, GE, and Kraft, among others.

In June 2011, The Wall Street Journal published “Secrets from Apple’s Genius Bar: Full Loyalty, No Negativity”.* WSJ investigates how Steve Jobs, CEO and co-founder of Apple in 1976, has revolutionized the world of consumer technology – and not just through its innovative product line. They interview current and former employees to learn some of Apple’s secrets to customer interaction that help foster the high level of customer enchantment and loyalty the company has achieved.

The article uncovered some basic guidelines Apple provides its employees for handling customer service interactions. Referred to as “steps of service”, they are spelled out in the acronym of the company’s name:

• Approach customers with a personalized warm welcome
• Probe politely to understand all the customer’s needs
• Present a solution for the customer to take home today
• Listen for and resolve any issues or concerns
• End with a fond farewell and an invitation to return

 PRODUCTS DON’T SELL. PEOPLE DO.

Think about it! Apple does not merely sell you an MP3 player – they invite you to experience the Apple lifestyle, which you see happy customers living in brilliant color in every commercial they produce. Product features don’t create enthusiastic and loyal customers — how people feel when they use your product or service is what drives them to action… whether that is to re-purchase or to recommend.

 Surprise and delight your customers!

One blog post about Apple by InsideCRM.com, a Customer Relationship Management (CRM) firm, elicited over 45 user-generated responses and 87% of those were overwhelmingly positive with regard to their perspective on the Apple brand.

Are your customers sleeping outside of stores just to be one of the first to buy your product? If so then you, much like Apple, must be doing something right! It’s obvious that Apple enjoys a fanatical customer following. This loyalty is not just a lucky coincidence; it is due to Apple’s long time commitment to deliver the best customer experience through its products and services alike.

According to several employees and [Apple, Inc.] training manuals, sales associates are taught an unusual sales philosophy: not to sell, but rather to help customers solve problems. “Your job is to understand all of your customers’ needs – some of which they may not even realize they have,” one training manual says. To that end, employees receive no sales commissions and have no sales quotas.^≠

In Marketing Apple: 5 secrets of the World’s Best Marketing Machine, Steve Chazin, former Apple marketing executive, addresses some principles that helped establish the company’s brand identity and loyalty and earn them such a huge market share.

So what are some practices you can embrace if you want to build that same kind of enthusiastic – overzealous even – customer base that is enjoyed by Apple today?

Be sincere – Every customer interaction is an opportunity. Make sure you are approachable, pleasant, and professional.

Ask, then Listen – Allow your customer to have a voice. This is a cornerstone of a trusting relationship. Lead with questions as needed, but allow the customer to fully express themselves.

Provide solutions – Remember you are the “fixer”! Once you have learned what the customer is really looking for you must convince them you have the answer.

Overcome obstacles – Be prepared when bumps arise along the path. Handle issues promptly, respectfully, and fully. Your customer will feel like they are important to you.

Show appreciation – Thank your customer for every opportunity, even if you do not make a sale. Demonstrate that you consider every moment of their time valuable and that you are available if they ever need anything.

Driving true customer loyalty must start with understanding your customer and must be maintained by providing a consistently sublime customer experience. Every interaction with a customer impacts their future buying decisions and a positive outcome is essential to creating customer evangelists, maximizing revenue, and growing your business.

The economic power of high-quality customer relationships is evident. Look at the correlation between the level of satisfaction your customers experience and your repeat sales performance and direct referrals from those customers who are in love with your product.

Continually meeting your customers’ needs – and making them feel good about their decision – creates a greater sense of value. They in turn are excited to share that feeling with others they know, which creates a “win-win” scenario for everyone involved and will help your business grow and your profits soar!

 
^† Arstechnica.com,“Apple shines at customer loyalty and branding”

* Full article viewable only to WSJ subscribers

^≠ Courtesy of Hi-TechAnalogy.com

What is Customer Loyalty?

We’re not talking about a traditional loyalty program that brings a customer back because they get the seventh sandwich free or they get frequent flyer points for future travel.

We are talking about the kind of loyalty derived from an overwhelming feeling of immense satisfaction with a product or service – a feeling that elicits an emotional reaction and drives a decision to recommend a particular service or product to a friend or colleague.

• Why does a fan of America’s Team, the Dallas Cowboys, paint their truck silver and blue with a star on the door?
• Why does an individual proudly wear a shirt emblazoned with the Coca Cola logo?

For the same reasons your loyal customer will recommend your product or service – it goes beyond mere customer satisfaction.

What we are referring to is sustained customer relationships based on utter enchantment with you and your product/service, which lead to not only repeat business but also to referrals for new business.

Wikipedia calls it the loyalty business model, but however you want to refer to it the simple idea is that building and maintaining a customer base who loves your product and will recommend it to people they know is the best way to achieve long-term growth and profitability.

The concept of customer loyalty is long-standing, though the term itself only dates back a few decades. In The Loyalty Effect (1996), field expert Fred Reichheld lays out the basic economics behind developing a loyal following of customers. The principles in the book not only have remained applicable over the years, they are magnified by the impact of the Internet on today’s business practices.

Still think a customer only tells 10 friends about a bad experience? Think again!

• Two thirds of the world’s Internet population now visit a social network or blog site weekly
• The average American has over 634 social connections on the Internet^†
• 52% of people forward information through social networks, email, and online forums

Ready or not, your company’s profitability is linked directly to the word of mouth advertising that is drawn from the experiences of customers who have been exposed to your products and services. Their ratings, reviews, and testimonials are communicated like a viral marketing campaign to everyone they know and thousands of individuals surfing the Internet – good or bad! Creating loyal customers who will share positive experiences is vital to your organization.

Harnessing the power of loyal customers allows you to grow almost effortlessly while increasing your overall margins.

But developing real customer loyalty is a process – it requires buy-in from all levels of your organization and is geared toward keeping customers truly enchanted so they not only remain loyal but also will share their excitement with others resulting in new business for you.

Providing top-notch customer service is a primary element in gaining customer loyalty, but do not mistake it is the only consideration.  Today’s customers already expect excellent service as a basic principle – meaning to be treated in a friendly, polite and professional manner along with responding timely to their needs is a given.

Customer loyalty we can say is derived from three main components:

1) The customer’s perceived value of the product/service

2) How well that product/service meets their needs

3) Exceptional customer service you provide

These three components cannot be weighted equally from one customer to the next. They are variable in importance depending on the customer – because no two customers are exactly alike!  For this reason, you must seek to understand your customer and what drives their decision process in order to find the ultimate key to unlocking the door to greater customer loyalty.

If your customer has a problem, you should do whatever it takes to make things right and just as importantly to resolve the concern in a timely manner. Hint! Customers know you are not perfect – but letting them witness how earnestly you strive for perfection can be a powerful customer service weapon! Social media interconnectivity and blogging present opportunities not only for unsolicited accolades but also for you to address issues in a forum where potential customers can gauge your responses even in the least tenable situations.

In our previous blog, we discussed The Ultimate Question and how it relates to customer loyalty. The first step for any organization in developing a program to establish and improve customer loyalty is to understand where you are now. Only then can you define ways to improve and focus on efforts to maximize results. The responses you receive when you ask your customers the Ultimate Question can give you an idea of where you are succeeding as well as areas where you can improve.

ASK for feedback. LISTEN to what your customers say. ACT accordingly.

Consider this. A mere 5% improvement in customer retention rates will yield between a 25% to 100% increase in profits across a wide range of industries.^≠ To sum it up – Happy customers spend more money more often! 

Simple satisfaction does not equal customer loyalty. Customers need to find value in your product, receive remarkable customer service every time, and feel like any complaints are dealt with professionally, fairly and promptly. To build customer loyalty you must focus on clearly defined goals derived from analyzing feedback from your customers to improve their overall experience.

The fast-track to increasing customer loyalty – retention and referrals – is to determine and put into effect changes in your organization that will elevate your customer experience to the level where they will shout your name from a mountaintop!

Walt Disney once said, “Do what you do so well that they will want to see it again and bring their friends.” These words have become a well-known maxim for pursuing excellence in customer service, but they are also the foundation of understanding what customer loyalty is all about. When we’re excited about something we can’t wait to tell someone… or even everyone!

When you are ready to develop and implement a program to help you gauge and improve your customer loyalty, Ellis, Partners in Management Solutions is proud to share our exciting product, the Customer Intelligence Application, with you. Contact us for more information.

^{† Pew Research, 2011}

^{≠The Loyalty Effect, F. Reichheld}

What is ‘The Ultimate Question’?

In The Ultimate Question: Driving Good Profits and True Growth, customer loyalty pioneer and expert Fred Reichheld proposes there is a single question you should be asking your customers that will provide you with a clear and easily understandable measure of your company’s performance as perceived by the most important person to your business – your customer!

Without understanding what exactly your customer needs and wants and what value they find in your product or service, how can you ensure repeat business and true customer enchantment?

Being satisfied is not enough. Satisfied customers are sitting ducks – waiting for the newest, cheapest thing to come along. They have no loyalty to your company or brand because you are not exceeding their expectations. They continue to use your services or buy your product because they do not have another or a more appealing alternative currently, but they are not excited enough to be “evangelists” for you, thus creating referrals and new business.

That is why the feedback you receive from asking The Ultimate Question is so vital. You will be able to identify how your customer base is divided between Promoters (people who absolutely love your product), Detractors (those who do not like your product) and Passives (ones who are indifferent).  As you come to understand these customers and implement practices to build greater satisfaction and ultimately increase your overall customer loyalty, you will find the percentage of Promoters will grow – right along with your company and its profits. Promoters are in essence a whole new, motivated, and enthusiastic sales team that doesn’t cost you a dime!

So what exactly is ‘The Ultimate Question’?  Simply put:

“How likely is it that you would recommend this company to a friend or colleague?”

In principle, it’s a simple concept. But it packs a lot of punch! Ask yourself – If I am completely thrilled with a service I receive or a product I purchase, what is the first thing I do? I tell my friends!  And not just one friend – I tell everyone I know, which in today’s booming social media environment could be hundreds or even thousands of contacts instantaneously.

Why is it important to have customers who are so enchanted with your product or service that they tell their friends, family, co-workers, and maybe even people they meet in the check-out line?  Because research shows that today’s consumer will take the recommendation of a peer (another customer or potential customer) – even someone they do not know personally – 78%^† of the time before they will trust the hype created by advertisements and promotions your own company generates. In fact, companies with a higher NPS Score (i.e. a greater percentage of Promoters) actually grow 2.5 times faster than their competitors!

Once you have made the decision to ask your customers The Ultimate Question, you must determine the best approach to asking it and then, further, learn how to process the feedback you receive in order to most effectively increase your number of Promoters and the resulting profitability of your organization. You must LISTEN to what your customers say and follow through with ACTION.

We recommend you check out the book, which is based on extensive research in conjunction with Satmetrix (a recognized provider in customer experience management) and Bain & Company (an established management consulting firm) and contains real stories of success through utilizing The Ultimate Question and Net Promoter Score to enrich the customer experience. Reichhold clearly correlates the conversion of customers into Promoters with generating ‘good’ profits and true and enduring growth for your organization.  Remember – customers won’t brag about you when you merely satisfy their needs – you have to truly exceed their expectations.

If you are interested in learning more about how Ellis, Partners in Management Solutions can play a part in this process and in helping you increase customer loyalty and overall profitability, contact us for more information about our exciting new product, the Customer Intelligence Application.

^†Socialnomics.net

Ellis Announces Additions to Executive Management Team

Dallas, TX. July 7, 2011 – As an ongoing effort to provide quality service to Ellis clients and with the introduction of its newest innovation in lead conversion and resident retention: the Customer Intelligence Application, Ellis, Partners in Management Solutions (Ellis) has made some additions to strengthen its executive team. “These additions are part of our strategy to strengthen our Company, our service and our product lines, through highly talented individuals from inside and outside the multi-family industry,” said Ellis CEO Joanna Ellis.

Ms. Ellis, who has directed the company since its inception in 1984, has selected Maria Lawson as the company’s Vice President of Training and Development and Francis Chow as the Chief Strategic Officer of the Irving, TX based organization.  Chow and Lawson will play integral parts in the ongoing operations of and further developments for the Customer Intelligence Application.

Mrs. Lawson has teamed with Ellis since 2007 and has been in the apartment industry for over 20 years. She held almost every onsite position with Lincoln Property Company over a span of 16 years. With LPC, she also held the positions of Regional Marketing Director, Regional Training Director, and ultimately Vice President of Marketing and Training. Mrs. Lawson has been involved in designing the content of a wide variety of industry training programs for LPC and Ellis.

Mr. Chow joins Ellis as the Chief Strategic Officer and brings almost 20 years of financial and managerial experience primarily in the retail and consumer products industries. Previously as Chief Financial Officer and interim CEO for a retail healthcare company, he was responsible for all financial and administration aspects of the business which included responsibility for the customer loyalty program.  Mr. Chow formerly served as Vice President of Finance for Timera, a retail workforce planning software company, and as Director of Finance for Triton, a broadband wireless company.  Mr. Chow began his career at KPMG auditing Fortune 100 retail and consumer products companies.

About Ellis

Annually, Ellis conducts thousands of mystery shops across the US and Canada and offers its customers the opportunity to participate in their exclusive national quarterly performance comparison (the Ellis Benchmark), which has for the last decade ranked participating companies based on their onsite staff’s performance on 10 key questions identified as essential to successful lead conversion rates.

Contact: Joanna Ellis | jellis@epmsonline.com | 888-988-3767