Are you using the power of social verification for your business? You need 5 Star Reviews! You know those little logos and certificates and badges people put on their websites? From the BBB®, Angie’s List®, etc. Those are called trust elements, and people do consider them! They have always served as a valuable form of 3rd party verification. However, more and more there is another kind of 3rd party verification that people are weighting even more – social verification (i.e. how many reviews and stars you have).

Talk about low hanging fruit! If your business doesn’t have good reviews and a lot of them make this a priority. In my experience there are thresholds: 5 reviews, double digits, 30 reviews, 100 reviews, four digits, etc. I have had clients who’s silent phone start ringing with 5 reviews and then an increase in business when they got to double digits, and so forth. So how do you get them?

By asking! You know you have a few raving fans (I hope so). If you are just starting and have very few reviews, set a review threshold goal. List some of your customers that you know would give a great review, and that would’t mind hearing from you, and give them a ring.

“Hello,[Mr. Jones], this is [your name] with [you business name], how are you today? I wanted to ask you for a personal favor [not my company, but me personally], online reviews make a big difference in business these days, and I was wondering if you would be willing to help me out by giving me a 5 Star [not just a review, but a 5 Star review] review on [Google, Facebook, Angie’s list, etc]. It would mean a lot to me, and I would be happy to show you how to do it [also important! – then silence… wait for their response].”

– “Oh you don’t have a Google account? Let me help you set one up!”

– “I understand you are in a rush. Could I send you an email with some instructions on how to leave a review?”

– “If it would make it easier, I can show you how to do it right here on this computer, or on your phone.”

So to review (no pun intended): delight the customer, ask for the review personally, ask for 5 stars specifically, remove the obstacles to make it easy.

Who to ask, don’t ask anyone who might not give you that great review. If you deal with customers face to face ask at the end of a service encounter it could go like this. “Mrs. So and So, Have I taken good care of you today?” If yes and you know they are happy, ask for the review! If you are a business owner and you have front line service people dealing with your customers, Consider giving your employees a small bonus. For example, service techs, CSRs, waitresses/waiters, etc. $5-$10 for a 5 Star review where they are mentioned by name. This may be a small price to pay to help them “buy into” getting reviews. Make it a contest! A long weekend getaway with paid time off for the employee who gets the most reviews each quarter. Be creative and get those stars!

Need to grow your business? Check out Business Kung Fu…

Are you using the Net Promoter Score (Reichheld, 2003)? You should at least understand what this important measure tells us about buying behavior and customer acquisition….

When I ask small business owners what their main source of new business is, the most common answer by far is word of mouth. I have mixed feelings about this answer because word of mouth is bar none/hands down the best marketing you can get. It also aligns with

my philosophy of business. Make something (or do something) so awesome that people can’t keep quiet.

My mixed feeling come in when that business is struggling to grow, and they have decent word of mouth but anemic underdeveloped marketing systems. I believe in a solution I call enhanced word of mouth or empowered word of mouth (more on that in another blog post). Indeed social media is making it easier for people to cast there vote on a business: they can share their delight or vent their ire.

So if word of mouth is the best form of marketing it would stand to reason that a business would want to measure how likely a customer is to tell others about you. Thus the Net Promoter Score!

What is the Net Promoter Score? A loyalty metric based on responses to a single question, that is typically asked in an anonymous way: How likely is it that you would recommend our company/product/service to a friend or colleague?

The scoring for this answer is most often based on a 0 to 10 scale. Those who respond with a score of 9 or 10 are called Promoters, and those who respond with a 0 – 6 are detractors. The score is derived by by subtracting the percentage of customers who are Detractors from the percentage of customers who are Promoters. Those who respond 7 – 8 are passives, and count towards the total number of respondents and thus affect percentages.

Scores can range between -100 and +100, and a score above zero is positive and above 50 is excellent. So if you polled 100 customers and 10% are promoters and 12% are detractors and 80% are passives. The score would be -2.

YOU WANT PROMOTERS! Promoters are considered more likely to exhibit loyal behaviors, such as larger purchases, remaining customers for longer, and recruiting other potential customers. Knowing how to do enhanced word or mouth and getting promoters is Business Kung Fu.

In customer service not only what you say but how you say it. In certain kinds of essential customer interactions – customers weight your message as 7% your word choice, 38% tone and 55% body language. This is known as Mehrabian’s rule*, and it applies when there is some dissonance between tone, word choice and body language. For example if you say, “how may I help you today with a slouch and bored tone people will weight the slouch and the tone as 93% of your message.

As a business owner, consider ways that you can teach your front line service people this powerful rule. Consider tactics such as role-playing and specific standards of service as ways to help your employees get this right.

In other words, people can learn customer service behaviors. In Business Kung Fu we go a step beyond behaviors and teach you how to develop a culture of service.

Another thing to consider is the raw material you are working with. The best service organizations in the world are known to “hire smiles.” In other words they look for people who already have the basic people skills and manners in place, and they polish them so they really shine.

*the actual results of his study are often misrepresented, and some people try to say that this is how people weight communication in general. Not true, your word choice is very important! It’s just that if you give people any reason to doubt your sincerity they will lean heavily on other indicators of your true message.

How do you manage cash flow? Managing cash well is an essential part of Minimum Enterprise Competence™, so we emphasize it in Business Kung Fu™.

Problems with cash flow are a killer in small business. I would imagine that if you asked 10 business owners what their greatest concern is, 7 of them would say Cash Flow. If you asked the same 10 what they think causes most business failures, you will also hear some version of, “not enough money – not enough cash.”

Even though most would answer this way, very few of them have a good reliable way to project and manage cash flow.

Part of the problem is that Cash flow statements while helpful are historical reports – they are lagging indicators. How do you create a forward-looking system to anticipate cash flows? Well you need to set up a projected cash flow tool in a spreadsheet as follows. Set it up so that you can plug in your projections into the foreseeable future.

Projected Cash Receipts
– Projected Cash Expenditures for COGS
= GM
– Projected Cash Expenditures for Overhead
= Change in Cash from Operations
+Projected Change in Cash from Investment Activities (including capital expenditures for assets: +/-)
+ Projected Change in Cash from Financing Activities (including paid-in capital from owners/investors, distributions & principal payments: +/-)
= Total Projected Change in Cash (+/-)
+ previous month’s cash balance
= projected months cash balance

Be careful to use conservatism, round down on projected revenues and round up on expenses.

Other things to look at are, your quick ratio, your debt to equity ratio and your Days Cash figure. Days cash is your liquid assets divided by average daily overhead. I hope this helps you! To learn more about this enterprise skill, check out Business Kung Fu.

• Think carefully through the list of qualifications (do the job design) and identify the right kind of person before you start interviews. Make sure you also have a list of things you don’t want and use this to eliminate candidates.
• Use temperament tests (DISC or MBTI), Check out the Free LifeThrive Assessment.
• Have more than one person in the company interview using the same job criteria as a basis and compare notes (first hire?: ask a friend outside the business to help),
• Call those referrals! Ask insightful open ended questions that get people talking. What kind of job do you think Matt would excel at? (keep it positive).

I can’t tell you how many times employers fall victim to their own biases. For example, you have a job that requires attention to detail. All 20 resumes listed “attention to detail” as a quality. Of course, who doesn’t put that? You ask them if they have attention to detail in the interview, and they say, “absolutely” and tell you a story to back it up. Charming! They’ll be a perfect fit…

But unless you have something more objective, how will you know? They take a temperament test and it shows they are great with people, and love interaction, but struggle with initiative and attention to detail. The test reveals that they would make a great tour guide or activity coordinator at a resort, but will misplace files and drop balls in your business. “But, they interviewed so well” Of course they interviewed well, their people skills are off the charts, but they will crash and burn in that admin role they interviewed for. Use an objective process!

Let’s look at some common hiring mistakes:

Hiring your friend: Sometimes a business owner will hire someone because that person is their friend. If the friend would objectively be great at the job, then that’s fine. However, if you are hiring your friend because they are your friend, or because you feel you owe them or something else like this, you run the risk of hurting your business and losing your friend in the process. Don’t hire just because someone is you friend, or you enjoy their company, or you feel lonely. Buying them coffee is cheaper and you will still have your friend even if the business fails.

Hiring Yourself: I think we all have a natural bias that says, “If I only had more time: or If I could only clone myself…” Sometimes, this bias leads to hiring yourself. By this I mean, hiring someone just like you. This is easier to do than you think. However, it is typically better to staff your weaknesses, and hire someone who is different but complementary. There are exceptions to this. For example, if you are the main rainmaker in your business and you are hiring another salesperson to take over this role, then someone with the same temperament might be a good fit. Just be objective and strategic.

Knowing how to hire well and build your team is an important part of Business Kung Fu

Touchstone Business Solutions provides Human Capital Development Solutions. 

It’s not uncommon for a company to start off being customer focused, but to drift from this over time. The pressure of growth, layers of bureaucracy, new team members without the service DNA. It can all add up to a company that has forgotten the power of really caring for the customer. This questionnaire will not only help you evaluate, it will suggest (by virtue of the questions themselves) some customer service best practices. Some of the questions may sound like they are assuming your business is a larger 2nd stage business.

The reality is that most of these things are scalable with a little imagination and can work for a solo-preneur or a much larger company.

Answer each question on a scale of 1 to 5. [1 = Not at all, 2 = to a small degree, 3 = moderately, 4 = normally, 5 = absolutely]

1. _____ We have well written and clearly articulated team documents (mission statement, care standards, customer care principles) that express our commitment to providing customers with quality products and an excellent level of customer care.

2. _____ We have specific short and long-term goals for enhancing customer satisfaction.

3. _____ In actual fact, our day to day operational decisions are consistent with our customer satisfaction goals and stated mission.

4. _____ We put our customers first;taking care of them is a higher priority than our internal politics and bureaucracy.

5. _____ We collect and measure data on the various aspects of our customer service that can be measured. (Wait times, response rates, etc.)

6. _____ We regularly survey our customers to determine how satisfied they are with our service and products.

7. _____ We utilize systems such as “mystery shoppers”, to expose problems with our service delivery.

8. _____ We take complaints and feedback seriously, and translate these into the appropriate policy changes.

9. _____ We focus on both customer care excellence and cost-cutting: relationships and results (sales, financial results, efficiency, etc.).

10. _____ Our managers consistently model service excellence in their dealings with employees and customers. They don’t delegate an attitude of care.

11. _____ Our senior managers have regular contact with our customers, not only of front line service personnel.

12. _____ We have systems to measure employee satisfaction, with regards to management and the company.

13. _____ We regularly seek out the input and ideas of all our employees.

14. _____ All our staff members have clear job descriptions that set forth our service standards.

15. _____ We have systems such as an internal newsletters and standup meetings that allow us to regularly communicate standards of service excellence and stories of success, so that we can reinforce the role that customer service plays in the company’s success. To retrain our managers to fulfill their roles in creating a service oriented organization?

16. _____ We effectively train all our front line staff on effective customer care skills (face-to-face, telephone, email).

17. _____ We educate internal staff on the importance of lateral service (serving internal customers) and its effects on overall customer care satisfaction?

18. _____ Our new employee orientation includes customer care skills training and education on the importance of the individual’s role in service excellence.

19. _____ We have an intentional selection process for new a employee, that focuses not only on technical skills, but also on people’s disposition, personality, and orientation towards service.

20. _____ We consistently strive to reduce bureaucracy that gets in the way of effective customer care.

21. _____ We use promotion and salary incentives to reward those who demonstrate excellent service and people skills.

22. _____ We are far more likely to recognize the staff member who goes out of their way to deliver exceptional service then we are to reprimand them for going beyond the scope of their authority .

23. _____ Our telecommunications (telephone system, website, email system) is set up to minimal to minimize customer wait time and maximize service effectiveness and efficiency.

24. _____ We reward employees who deliver exceptional customer care and through both formal means and an informal atmosphere of recognition.

25. _____ We coach, counsel and discipline employees who do not embody, or demonstrate our service standards.

26. _____ Our policies and procedures are designed to be customer centered, and to focus on their convenience and not merely our own.

27. _____ We have clearly documented and well communicated minimally acceptable customer care standards.

28. _____ Our performance reviews evaluate how well our staff implements our standards of service.

29. _____ Each staff member understands his or her specific role in accomplishing our mission statement and delivering our standards of service.

30. _____ We establish cross functional teams to regularly review our service performance and tactics.

___________Total score (150 points Possible)

Less than 60: Inwardly-focusedbureaucratic organization.

60 – 80: Customer care is compartmentalized.

81-120 Transitioning to a customer focused organization.

120 or above: Customer focused (centric) organization.

The business begins to experience sales growth, but this growth begins to overwhelm the owner – it brings the whirlwind. To much work, to few hours, balls start to drop, etc. To solve this whirlwind the owner begins to spend money to solve the problem. The bulk of this spending is in hiring. That’s when the business hits the scalability gap. The problem is that the growing business becomes unwieldy and inefficient and expenses rise faster than sales creating a cash crisis.

The owner wakes up one day and says, “hey wait a second I was making more money (bottom line) before we grew,” or worse the owner wakes up to insolvency. This problem seems to be exaggerated in business models that are inventory and/or HR intensive. Cash management, working capital reserves and the skills to build systems and people are what it takes to get through the Scalability Gap. In Business Kung Fu you will learn the enterprise competence that will help you get through the scalability gap.