Charging for Service

"They say the best things in life are free, but you can tell that to the birds and bees, I want money, thats what I want" - Money, The Flying Lizards.

Should you charge for service? The simple answer is: it depends. If you are providing some sort of field service or support for a hardware product or complex software product I can't imagine you not charging for it. The option would be to charge so much for the original product that no one would buy it.

The issue comes when you are talking about a low cost or medium cost piece of software. A lot of companies charge somewhere around 20-25% of the purchase price for "maintenance". Basically, this is a highly discounted price for new major versions of the product. While phone support is sometimes offered, it usually consists of someone with little or no knowledge of the product (we used to call them "first tier" support) who has a knowledge base (often the same one that is online) that they search through using the keywords you give them. More and more frequently support is now user forums and knowledge base articles available online. Frankly a decent Google search will turn up more interesting help on a particular problem.

That is not to say that support could not be a profit center. But if you are going to charge for it, then ensure that what you are providing goes way beyond what someone could find on the web. Make your developers available, at least through forums or email. Have knowledgeable people as your "first tier" support. They should be able to handle most questions on the first call. If you aren't willing or incapable of providing that level (for whatever reason that might be) don't annoy your customers by charging them for half-baked answers.

Customer Service - It can be a competitive advantage

I have heard people saying recently that great customer service isn't a competitive advantage anymore, it is a basic requirement.

I respectfully disagree.

I have seen lots and lots of businesses survive quite nicely with absolute crap for customer service.

The fact is, consumers have become inured to rude and inattentive clerks, restrictive store policies, and managers and sales people who could care less about the customer.

In the technology field who is number 1 in software? Microsoft. While they have some excellent products, what about their customer service: <sound of crickets chirping> . Imagine if Microsoft offered exceptional service along with good products. Maybe the pirating issue would shrink since it would be worth the money just to get the service and the help!

The reality is that mediocre customer service is the benchmark now (and if you are big and have only a couple of competitors poor customer service will suffice).

Want to excel in your market? Want to blow away your competition? Offer exceptional customer service. Go out of your way to please a customer. No, don't just please your customer; delight them! You may find you can increase your prices because you make the customer feel good about doing business with you.

Stop engaging in a race to the bottom.

I'm Baaaack

I have spent the last month or so contemplating my navel and other such things as I have evaluated my business direction and marketing efforts. Now that I have that far better under control (not quite completely but that story is for another day), I am back to the blog bursting with ideas. I will be incorporating some of the marketing changes into the blog, and a lot of my posts will be centered around these changes. I hope you enjoy them.

Work vs. Effort

This article from the Pittsburgh Post Gazette was referred to me by David L Holzer, a good friend and insurance advisor with an interesting view of the world:

Work Zone: A bottomless well of vacation time

The gist of the article is that Netflix has no vacation or sick leave policy, and how this kind of "non-conventional" policy is taking hold here and there. Their policy is, if you got your work done and you want to knock off for a few days, do it.

From my point of view, here are the money quotes:

"The worst thing is for a manager to come in and tell me: 'Let's give Susie a huge raise because she's always in the office.' What do I care? I want managers to come to me and say: 'Let's give a really big raise to Sally because she's getting a lot done' -- not because she's chained to her desk." - Netflix Chief Executive Reed Hastings

"We're a grown-up company, with over 12,000 employees, and you have to have some semblance of process and procedure." - unidentified Yahoo spokeswoman

Notice the difference? Reed Hastings @ Netflix is more interested in getting WORK done. Yahoo is more interested in the processes and procedures. If you have the processes to get the work done than what difference does it make if you have 12 or 12,000 employees? The point is still to get the work done! A "grown-up company" - What in the world is that?

Here lies the crux of the problem with a lot of managers. They confuse work with effort. Work is the result of effort. We pay people for work or results. If we as managers give someone assignments that they can complete with 1,960 hours of effort then why should they have to hang around the office for the other 120 hours (3 work weeks) in that year?

The Customer is Always Right? Part II

The Customer is Always Right.

In my last post, I talked about how this little statement is often made and then ignored by companies. In fact, it is ignored or twisted so often, it becomes meaningless.

Let me introduce a piece of heresy here. It is a statement that I picked up along the way, unfortunately losing the source somewhere in the fog of time. Wherever I picked it up from, it was the first thing I drilled into customer service reps that came into my departments:

The Customer is NOT always right. However, it is your job to make sure they feel they are.

My reps knew that there were certain policies that we could not get around. However, that didn't mean we couldn't work with a client to see if we could come up with something that made the customer feel good, and at the same time didn't violate whatever policy the customer had run afoul of.

Sometimes it was something as simple as staying on the phone and letting them vent. More often it wasn't a policy issue at all. It was making sure the customer didn't feel stupid when they realized if they had just read the manual, they wouldn't have run into the problem in the first place. At one software company, we actually had a code to record such incidents: RTFM (Read The Freaking Manual).

Now before you rage at me that using the code insulted the customer, understand two things:
1. That we often reported back to development that there was a high incident of those codes for a particular feature, and we would work with them to try and rework that section of the system so that it was easier to use. (this process will perhaps be covered in another post)
2. The reduction in stress among the Customer Service Reps was marked. The goal of the team became thinking of ways to work with the customer to get a Win-Win, instead of stressing that management would capriciously decide that the reps answer insulted the customer or insulted the company.

The perfect answer of course is to have no policies that would contradict what a customer may ever call about, or software/hardware that works flawlessly everytime, for everyone, no matter what is done with it. I won't be holding my breath for either of those to happen anytime soon.

The customer is always right? Part 1

The customer is always right.

This is considered a truism in the Customer Service world. However, the fact of the matter is very few companies actually believe the customer is always right; they throw it out there to show "they care". In point of fact, I would say most of the companies I have dealt with in my life don't believe the customer is ever right. How many times have you heard: "I understand what you are saying sir, but I can't help you." That is a very nice way of saying "you're right, but too bad."

So what they are really saying is "The customer is always right, but that doesn't mean that we have to help them." While I would hardly expect any company to use that as their motto, if you are going to create policies that make a mockery out of the statement, then why use it?

Do they teach them anything?

This one was unreal. I was waiting in line at a Panera Bread recently. The young lady behind the counter seemed to be some kind of manager/assistant manager (they seem to wear different shirts from the rest of the employees), working studiously on some paperwork. There were probably four of us waiting for several minutes before she glanced up and said "Oh, I'm not open."

Wow. Two things here. One: did she have to be behind a cash register doing paper work? Maybe she needed the cash register tape, I'm not sure. Two: if she had to be there, how much effort would it have required to write up a little paper sign that said "closed" and tape it on the front of the register?

One of the few gripes I have about Panera (the other is that they do not have enough power outlets for laptops) is that you never know what register is open or closed. People seem to staff the registers randomly, and walk away to go do other tasks at odd times.

That random flow may seem to be efficient to management (and I am a big multi-tasker), but it can breed an attitude that it is OK to ignore customers while you work on another assigned job. Worse, when someone in management ignores customers for several minutes before informing them they are in the wrong line, what do you think that tells the rest of the staff?

Do they teach these people anything about customer service?

Forget me not

Every once in a while I am reminded how many people I have let slip out of my life. Not only some wonderful personal relationships, but what could have been key connections or resources. You may be the most brilliant coder, manager, or whatever that ever graced the Earth, but there will be times you find yourself wishing for some help or friendly advice.

Why do we set up computer networks? To allow machines to communicate. With multiple machines we can share a workload (one does web-serving, another is the database system, etc.) Why would humans be any different? And unlike machines that become obsolete, people don't. Everyone has information you can use or can be a helping hand.

Check out Michelle Donovan's blog to get some insights into networking (people not computers). Her focus is on developing business through relationships. You may not be selling, but the tips and clues on how to develop strong relationships will be beneficial to you no matter what.

Earning Trust

How many times have you heard: "You have to earn trust"? I believe this bit of conventional wisdom has been ingrained into me since I was a child (you can probably relate to that). I also believe that this bit of conventional wisdom has held me back in more endeavours than I can count.

What this bit of wisdom should say is: "You have to earn more trust." If you start with the premise that someone starts out in your relationship with no trust, then how can they possibly develop any? If you don't trust them to some degree then what can they do to earn some? How hard is it to tell a new employee or co-worker that you are going to trust them with some things up-front, and allow them to earn more trust as time goes on?

How much trust you give will depend on the circumstances - how much you have to lose if they violate your trust - but there is almost always some level of trust that can be given at first. The reality is that you are doing this anyway to some degree. The really big difference is how it is presented. Telling someone they have to earn your trust is a negative. It will take you a long while to develop a strong relationship with someone if you tell them up-front that they are not trustworthy (at least you perceive them that way). On the other hand, telling someone you are granting them a level of trust up-front is a positive. If the person is truly someone deserving of your trust, they will work extra hard to earn more, knowing that you have stuck your neck out (to some degree) in the beginning.

Starting a relationship on a positive note. Wow, what a concept!

Data and Information

Way too often, I find there is confusion between the terms data and information. Put simply:

Data - A collection (or collections) of "stuff". It is either unorganized, or organized along a single dimension (e.g., the number of phone calls a customer service person handles in a day - the single dimension is the count of calls; nothing else is taken into account about the calls themselves, merely the gross number.)

Information - A collection of data that is considered together with other data collections, past and present experience, and a healthy dose of intuition. Information is organized, often along multiple dimensions (e.g., the number of phone calls a customer service person handles in a day, the amount of time each call took, the question being asked, the number of times a single customer called, and the number of times they called about a specific issue.)

A single piece of data taken in isolation can result in awful management decisions. Lets take the example I included in parantheses above. If the only metric you use to determine productivity or usefulness is the gross number of calls a customer service person handles in a day, you are losing out on a wealth of information: Is there a particular product that is causing a problem? Is there a particular demographic that is having a problem? Is the customer service agent that is taking more time on the phone more effectively helping the customer, or are they just wasting time.

Look at the reports you regularly review. Do they contain data or information?

Respecting your Staff

A good friend and mentor of mine, Deanna Tucci Schmitt, responded to my entry about customer service ("What an Attitude!"):

"One way to ensure great customer service from your staff is to treat your staff as well (or better) as you treat your customers. Do you agree?"

The short answer is a resounding YES!

Do you make it a habit to yell at your customers or make them feel inferior for getting in the wrong line or asking the wrong question? Why not? Don't you need to teach these people how to read signs or read the labels on the product?

No? So why would you treat your staff that way? Because you pay them? You pay your customer too. What you paid for the product, the advertising, the building and the time you spend to sell them, is what you pay your customer. In return they give you money for your particular product or service. Your staff you compensate with cash, facilities and resources, and they create the product, support the product, sell it. Whichever you choose, whatever you call it, they are providing the mechanism - or supporting it - that you use to generate income (or justify your salary if you are not the owner.)

Think about a time you were insulted or beaten down (c'mon it happens to all of us at some time in our lives.) Did you feel like jumping up and screaming "Thank You Sir, May I have another?!" or did you slink off plotting creative demises for the person that done you wrong? If the latter, remember that the person you may be demeaning now is going out to deal with your customers.

Isn't that a pleasant thought?

Thanks for passing that nugget on Deanna!

Rules of Hiring - Part II

Rule #2 of Hiring:

Always hire someone better than you at the job you are hiring for.

Sounds obvious right? However, too many times people are hired that are not as competent at their job as the manager (especially in the Tech world where the line between managing the work and doing it is often blurred - another mistake, but more on that later.) I believe the usual reason for this is fear. The manager believes if their group or department is staffed with extremely competent people, that the manager's boss will decide they (the manager) is no longer needed, or in the case where the owner makes the decision, they are afraid the new hire will outshine them.

The manager in the first case is driven by the fear of being made obsolete or useless. They miss the point that a manager is typically judged by the quality of their people's work, not their ability to rescue every project from the hands of their incompetent staff. If you hire only the best people to do the work, and remove the obstacles in their way, you should be recognized as the leader that you are.

However, if you find yourself in the kind of position where the bosses up the chain (and if there are a lot of those, you are already in the wrong company) share your fear, get out! What you are in for is a lot of frustration and an ulcer as your worry consumes you. Think about it. If you do shine because of your people, your boss (and possibly several bosses up the line as well as other managers in other departments) will either take credit for your work, or more likely, try to sabotage you. If you want to shine, but play the game and hire mediocrity, you will be frustrated as your department constantly looks to you to help out (which will feel nice the first 10 times but around time 100 is just plain infuriating.)

The second case is actually more ego than anything else. To those people I say: "Wake Up! You own the company! What the heck are you worried about?"

Rules of Hiring - Part I

Rule #1 of Hiring:

Hire for chemistry first, skills second.

I have known and worked with several brilliant people in my time. Several of them however, never clicked in the organization and their contributions were minimal. Why? Because even though their resumes and demonstrable skills were impressive, they did not have any chemistry with the people they worked with.

Chemistry doesn't necessarily mean you want this person to be your best friend, or even that you want to hang out together. It means that your work ethic, your view of the job at hand, and the way you look at how to solve problems generally agree.

Skills can always be trained or enhanced. Having someone share your philosophy - about work in general and the specific work - is something that they will more typically come into the job with. Training attitude is much harder, and will take valuable time that person could have been producing value for the company.

What an Attitude!

Something I heard the other day jogged my memory about a CEO I used to work for. During a conversation with him he told me: "Customer Service is a necessary evil."

Wow!

This same CEO was out telling prospects and potential investors that our customers were the most important thing in our business. Perhaps he was referring to the revenue they brought the company.

Do you find yourself thinking the same thing? The temptation is to think of Customer Service as a Cost Center, because it is difficult to gauge how much of your revenue comes from it. Wrong. Good Customer Service is not that hard, not that expensive, and the return on the investment shows up every day in referrals, references and repeat customers.

The Fifteen Minute Solution

When I was a kid, my dad had this horrible ritual each Saturday in the spring and summer:

Yard Work

Yard Work entailed cutting grass, trimming hedges, cleaning up garbage thrown by passing cars and pedestrians, and anything else my dad could dream up.

To try and lighten the load, dad would always unload this nugget of wisdom on me:
"If you do 15 minutes of yard work everyday, then you won't have near as much to do come Saturday."

I never listened, I had too much to do during the week, playing ball with friends, bike riding, I could always find an excuse not to do 15 minutes of yard work. Then, come Saturday, I would howl about being trapped for the morning and often part of the afternoon doing things I could have done during the week.

We can easily apply this to taking over an existing organization.

The temptation is to jump in and prove that you know better than everyone else. Start barking out orders, making changes, and whip the group into shape. After all isn't that your job? Well, no. Your job is to get obstacles out of the way. To do that sometimes you need to push. To push, we need to convince people this is in their own best interests. You need to develop trust and rapport so that they will listen to you when you try to communicate (not TELL) why something is in a group's best interest.

You need to observe first. See what is going on. Try and understand why things have evolved the way they have. Then start making small improvements and changes. Don't threaten people with wholesale change, ease them into it. Do the 15 minute changes, which over time will become part of the culture. Save the big push for later, when you have a base to work from, when you have the support of the group. Some of the smallest changes can reap big changes in process and attitude.

Don't spend a week or a month planning a set of changes or new processes, and then dump it in your staff's lap at a Friday morning staff meeting and expect it to be implemented in the next 4 hours. Make the easy changes first, and make them gradual. You'll find you have less to do come that Friday morning staff meeting.

As I get older, my parents get smarter

The title of this post touches on the difference between knowledge and wisdom.

Anyone can gain knowledge. There are colleges to attend, universities to get advanced degrees from, and more books, videos, and internet sites about everything you wanted to know about than you could ever review.

Ahh but wisdom is a little trickier. Wisdom tells you how to apply the knowledge that you have.

Wisdom comes from two places: your own experience, and the experience of those around you. How easy it is to dismiss those with experience when you are young, and overflowing with the latest knowledge. How easy it is to ignore those who have been there before you, especially in technology where "everyone knows" the latest knowledge is the best.

If only it was that simple. Read a book: be an expert. Unfortunately, the knowledge you can gain from reading a case study, or someone's opinion/system (even mine!) may not totally apply (or apply at all) in your particular management situation. This is where wisdom- the power of experience - comes into play; wisdom allows you to judge how much of your knowledge is applicable, and how to apply it.

But what about new knowledge? New techniques, new data? This is where the truly wise shine! Those who are truly wise do not rely just on their experience, but act like sponges when it comes to new knowledge, and adapt their thinking based on their experience and the new knowledge (including the experience of others).

So can only the old and experienced be wise? Of course not! The key for those who are younger and less experienced is to listen to the more experienced, and include that combination of knowledge and experience in their own thought processes.

You would be surprised how smart your parents really were!

Don't push me

Last summer I was facilitating a leadership breakout session. I started the session out with a simple exercise:

I had the group split into two and face each other. They then put their hands up in front of them and gently put their hands against their partner's. At that point I told the group facing me to push. The results were predictable: the group that was being pushed, pushed back. This is human nature - we do not want to be pushed around - we don't want to lose control of ourselves or our situation.

One of the challenges of leadership / management is getting people to do things that they might not want to do, but are important. We need to push.

After everyone had sat down, the next question was: "what if the person pushing you had told you that a piano was falling and they needed to get you out of the way so you wouldn't get hurt (or killed!)?" The unanimous answer was "push all you want."

This is the key. People will allow themselves to be pushed or directed if they see there is some benefit to them. Too often management simply gives orders without explanation. The response is push back. It might be in the form of grumbling, complaints among employee groups, or even outright mutiny. All bad.

Take two minutes to explain what you are doing, or better yet, find a way to relate it to how it might benefit the people doing it. You'll find the pushing goes a lot easier.

You reap what you sow

I had an interesting experience recently at a fast food restaurant.

I come to this place occasionally because the food's pretty good for what it is and the quality is consistent (if you haven't read "The E-Myth" I suggest you do, it presents some excellent concepts on what a franchise needs to do if it is going to succeed even moderately.)

The place had recently closed and reopened under a new franchise owner.

The service under the first owner was uniformly wretched. The quality of the food was consistent, but getting a correct order in a reasonable amount of time was not. The counter servers were universally rude (except of course for the owner who would occasionally wait on customers). Under the new ownership however, counter service was friendly and prompt. When the inevitable mistakes were made, an apology was always forthcoming with a smile and an expression of appreciation for the customer's patience.

Why the difference? The staff had turned over, but the newcomers were still teenagers (who we all "know" are incapable of good customer service - another canard used to let poor management off the hook.) Why was this group so much different than the last? I wanted to know, so I watched what was happening behind the counter while I waited in line.

Under the previous management, the staff had been treated largely like a bunch of difficult children. Requests for help from the owners/managers were met with sighs and cold lectures on how to do something. There was no banter or encouragement from the ownership, only criticism.

Under the new management, the staff is treated like what they are: important members of the team who are the face of the restaurant to the customers. Requests for help were answered with gentle and thorough explanations and encouragement. The management would involve themselves in conversations with their people, even allowing some good natured ribbing at their expense.

Now put yourself in those kids positions. In the first case, why should you care about the owners or the customers when all you get is noise about what a bad job you are doing? Would you care?
I'm not sure I would, and I have a strong service background. In the second case though, the people you work for show you they care - about the customers but also about you. The friendly and helpful environment behind the counter makes it much easier to be friendly and helpful to the people in front of the counter.

Now does this mean you need to be lackadaisical about the rules, or let some bad apples run roughshod over you? Of course not. Just make sure when you make rules, they are there to help the business function better, not make management's job easier by giving them an excuse to discipline or terminate someone for something instead of trying to find out what is going on and correct a potential problem. My own experience has been when you treat your people well, they will start to police themselves. Who wants to let a bad egg ruin everything for the rest?

KISS

I have always believed in the KISS principal: Keep It Simple Stupid! with the Stupid always being applied to whomever was designing or creating the thing that needed to be kept simple.

However, today I heard a new definition of KISS:
Keep It Short and Simple

Brilliant! That can apply to virtually everything you do: Instructions to an employee (think 1 minute manager), written documentation for a computer program, or a process designed to handle a particular business task.

Tip of the Hat to Melanie DePaoli of Omicle, and thanks for a wonderful new insight!

International Networking Day

Last Tuesday (Feb 6th) I had the pleasure of attending International Networking Day in Pittsburgh. The reason I mention it here is the execution of the event was a "textbook" example of my management philosophy.

In what way?

The event was spearheaded by Deanna Tucci Schmitt . Deanna did two things that helped make the event successful:
1. She had a clear vision and an overall project plan (tip of the hat to Linda Schumacher's project planning skills) that she communicated to the people assisting.
2. She formed committees and then allowed each committee to do their job without micromanaging them. She held regular reviews of committee progress, but each committee was allowed to pursue their goal as they saw fit.

Deanna provided guidance, contacts and budget - i.e., she eliminated obstacles as they came up. Each committee knew what they were responsible for and each did their job.

The result was an enjoyable and smoothly run event attended by several hundred people - and put together in only 3 months!

Launching the blog

My management philosophy is based on two simple beliefs:

1. 95% of all problems in business are management problems... and the other 5%? Well, they are management problems too.

2. A manager's job is not to "boss" people around, or "make sure the work is done". A manager's job is to work as hard as they can to make sure there are no obstacles in the way of their people doing their job.

My technology philosophy is based on two simple beliefs:

1. Technology is a means to an end, not an end in itself.

2. In all things automated: Keep It Simple Stupid! (KISS)

The posts that follow in the days, months, and years ahead will look at management and technology issues through those two lenses. I hope you enjoy it.